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SHANGHAI
AND SEOUL—China Southern Airlines Co., Asia’s biggest
carrier by passenger numbers, rose the most in a month
in Hong Kong trading, leading airlines in the region
higher, on plans to increase fuel surcharges and a drop
in oil prices.
China
Southern surged as much as 9.3 percent, and was trading
at HK$3.08, up 6.6 percent, at the 12:30 p.m. break
Wednesday. Cathay Pacific Airways Ltd., Hong Kong’s
biggest airline, leapt 6.2 percent to HK$14.70, the
largest gain in nine months.
Carriers
across Asia surged after the price of oil dropped the
most in three months Tuesday, soaking optimism that fuel
prices may cool. China Southern and Air China Ltd. will
also raise surcharges on international routes as much as
38 percent from tomorrow to mitigate fuel costs that
have doubled in a year.
“This
will help the airlines offset part of the surging fuel
prices,” said Ma Ying, an analyst at Haitong Securities
Co. in Shanghai. “Still, carriers may continue to suffer
from hard times, with high fuel costs and falling
passenger numbers.”
China Southern and Air China, the nation’s largest
international carrier, will raise levies on trips to
North America, Europe and other long-haul destinations
to 1,100 yuan ($160). Surcharges on domestic flights
rose as much as 50 percent starting July 1.
Air
China jumped 7.9 percent to HK$3.97 in Hong Kong. Cathay
Pacific owns about half of the airline’s Hong
Kong-listed stock. China Eastern Airlines Corp., the
nation’s third-biggest airline, rose 8.1 percent to
HK$2.39.
Oil fell
$5.33 Tuesday in New York, as concerns about a slowing
global economy sparked a selloff of commodities. The
fall may extend a three-day decline in the price of jet
fuel, most Asian carriers’ biggest expense.
“The big
drop in oil helped turn investors’ positive on Asian
carriers [Wednesday],” said Seo Jin Hee, an SK
Securities Co. analyst in Seoul. “Still, it’s too early
to say whether the oil price has shifted toward a
down-direction in the long term.”
Korean
Air Lines Co., South Korea’s largest carrier, rose 4.1
percent to 40,200 won in Seoul trading. Singapore
Airlines Ltd. rose 3.5 percent, the most in three
months, to S$14.86 in the city. Qantas Airways Ltd.,
Australia’s biggest airline, climbed 2.8 percent to
A$3.29 in Sydney.
The
Bloomberg Asia Pacific Airlines index, which tracks 17
airline stocks, has plunged 43 percent this year on
concerns that higher fuel prices will damp profit. The
price of jet fuel dropped 1.6 percent to $173.45 a
barrel Tuesday in Singapore. That’s 4.6 percent lower
than July 3’s record close of $181.85.
China
raised the price of jet fuel for domestic services by
720 yuan per ton from 8,020 yuan starting July 1,
Shanghai Securities News said Wednesday, citing
unidentified people at China National Aviation Fuel
Group, the country’s government-controlled monopoly
jet-fuel supplier.
The new
price represents a 9-percent increase, according to
Bloomberg News calculations. China also raised fuel
prices for domestic routes by 25 percent last month.
China National Aviation spokesman Bian Hui was
unavailable for comment when called Wednesday.
Chinese
carriers pay international market prices for fuel used
on overseas flights, while supplies for domestic
services are subsidized. The government has raised fuel
prices to reflect rising oil prices and because of a
wider drive to cool the economy. (Bloomberg) |
