Chinese Airlines Slump Amid Bird Flu Concern: Hong Kong Mover
China Southern Airlines Co. (1055) plunged the most in more than a year in Hong Kong trading, leading a slump in shares of the nation’s carriers on concern an outbreak of bird flu may hurt travel demand.
China Southern, the country’s biggest domestic carrier, fell 8.5 percent, the most since Jan. 16, 2012, to HK$3.87, while Cathay Pacific Airways Ltd. (293) dropped the most in almost eight months. Shares in Air China Ltd. (601111), China Eastern Airlines Corp. (670), Singapore Airlines Ltd. (SIA) and Qantas Airways Ltd. (QAN) also declined, causing the Bloomberg Asia Pacific Airlines Index to drop the most since May.
The death toll in China from a new strain of bird flu rose to six people as Shanghai began slaughtering birds at a local market and concerns of an outbreak sparked the biggest drop in Hong Kong stocks in more than eight months. Previous outbreaks of severe acute respiratory syndrome, or SARS, and bird flu had emptied planes and caused some Asian airlines to post losses.
“People are worried the new bird flu would develop into a disaster like SARS,” Davin Wu, a transportation analyst at Credit Suisse Group AG, said by phone. “At least leisure travelers will be cutting back their trips to China.”
Shanghai, China’s financial hub, has reported six of the 14 human cases of the H7N9 strain of avian influenza confirmed by local authorities since the country’s health ministry reported the first cases last month, China’s official Xinhua News Agency reported yesterday.
Concerns about more widespread infections fueled as much as a 2.8 percent slide in Hong Kong’s benchmark Hang Seng Index and led to declines in the price of soybean, a key ingredient in chicken feed. There’s been no evidence of human-to-human transmission of the virus, the WHO said yesterday.
The extent of the outbreak, the source of infection and the mode of transmission are being investigated, and it’s too early to tell if the cases may signal a pandemic, the agency said.
China Southern, based in Guangzhou, had earlier today fallen as much as 15 percent, the most since September 2001. China Eastern, based in Shanghai, dropped 8.3 percent to HK$3.10 and Air China declined 9.8 percent to HK$6.05. The Shanghai stock exchange is closed today because of a public holiday.
Airlines in China carried 319 million people last year, up 9 percent from a year earlier, according to regulator Civil Aviation Administration of China.
SARS infected 1,755 people in Hong Kong, killing 300, and caused economic losses totaling HK$3.8 billion ($490 million) in two months alone a decade ago as tourist arrivals dwindled and business from restaurants to taxi cab slumped. China Southern and China Eastern posted annual losses in 2003 while Cathay and Air China saw profits decline.
Cathay Pacific fell 4.1 in Hong Kong trading, the most since August.
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