Airline stocks rebound after drop in yen and fuel prices

By Joy Chang, The China Post

TAIPEI, Taiwan — Airline stocks rebounded yesterday following the fall in fuel costs and the depreciation of the Japanese yen, analysts said.

Eva Airways Corp. (���a����) and China Airlines Ltd. (���د���) shares are up by 2 percent. TransAsia Airways Corp. (�_������) shares are up by 1 percent. Analysts speculated that since the Japanese yen plummeted after the Bank of Japan’s surprise expansion of stimulus measures, falling to the lowest level in seven years, more Taiwanese might be encouraged to travel to Japan.

The crude oil futures price in the U.S. decreased by US$0.58 in December, dropping 0.71 percent at US$80.54 a barrel on the NYMEX last Friday. The price of crude oil futures fell US$0.38, dropping 0.44 percent to settle at US$85.86 a barrel on the Intercontinental Exchange last Friday.

China Airlines and Eva Airways consume 1.4 million barrels and 1 million barrels of fuel each month, respectively. TransAsia Airlines consumes 81 thousand barrels of fuel per month. The airline companies are expected to profit from the decline in fuel prices and the surge in the number of travelers during the upcoming year-end holiday as well as during the long break at the beginning of next year. Decline in Plane Ticket Prices

According to local reports, China Airlines will cut down costs by NT$636 million per month thanks to the drop in fuel prices. Forty percent of that, or NT$382 million, will contribute toward decreased prices for plane tickets. According to Mean of Platts Singapore (MOPS), airline fuel prices fell from US$116.60 per barrel in September to settle at US$112.48 a barrel in October. Airlines estimate that the price of fuel will continue its decline to US$101.60 a barrel in November.

Taiwan’s airlines are offering many promotions online and at the Taipei International Travel Fair to attract more passengers for off-season flights. If travelers purchase round-trip tickets from China Airlines online before Nov. 16 and board the plane before the end of November, they can buy plane tickets starting from NT$2,999 flying from Taoyuan to Hong Kong, NT$32,062 to fly from Taoyuan to Los Angeles or Vancouver or NT$8,888 to fly from Taoyuan to Kuala Lumpur or Wenzhou. TransAsia Airlines is offering similar promotions. Customers buying round-trip tickets before Nov. 16 to travel in November will get discounted prices of NT$4,100 to fly from Taichung to Macau, NT$4,600 to fly from Kaohsiung to Macau, NT$7,600 to fly from Taoyuan to Bangkok.

Staring in mid-December and continuing until after New Year Eve is the first peak season for the airlines, as students studying abroad return to Taiwan for the winter break. Airlines expect the next peak to coincide with the Chinese New Year holiday.