By Irene Shen
Oct. 24 (Bloomberg) -- Singapore Airlines Ltd., the world's most valuable airline, dropped the most in 21 years, leading Asian carriers lower on concerns a global recession will cut business and leisure travel demand.
The carrier dropped 10.4 percent to S$10.52 in the city- state today. Cathay Pacific Airways Ltd., Hong Kong's largest carrier, dropped 10 percent, the most in seven years, to HK$8.78. Air China Ltd., the nation's biggest international carrier, fell 17.4 percent to HK$1.81, the lowest since its listing in December, 2004.
The stock plunge is ``due to lack of confidence in the overall economy,'' said Huang Bin, board secretary of Air China, by phone today. ``There's still room for further declines.''
Global air-passenger traffic fell in September, the first drop in five years, the International Air Transport Association said today. Merrill Lynch & Co., UBS AG and JPMorgan & Chase Co. are telling senior bankers in Asia to fly coach on short-haul flights and reduce non-essential travel as they step up cost cuts, officials at the firms said.
China Eastern Airlines Corp., the nation's third-largest carrier, said the plunge leading its share prices to the lowest level in more than five years reflects the slowing demand for air travel.
``It's fair,'' Luo Zhuping, director and board secretary of China Eastern, said by phone today. ``No doubt that air travel demand will continue to fall for a certain period of time.''
China Eastern fell 17.3 percent to 86 cents today in Hong Kong, the lowest value since May 19, 2003, according to Bloomberg data. That's 77 percent lower than the HK$3.80 Singapore Airlines and its parent Temasek Holdings Pte offered last year to purchase a combined 24 percent stake in the Chinese airline.
All six Chinese airlines listed in Shanghai and Hong Kong have plunged more than 72 percent this year as travel demand slows and some carriers forecast they may post losses.
Shanghai-based China Eastern said Oct. 10 it may post a ``greater loss'' in net income for the first nine months because of a slowing aviation market and rising fuel costs. Air China said Oct. 15 it likely slumped to a nine-month loss due to travel disruptions caused by the Olympics and natural disasters.
China Southern Airlines Co., the nation's largest carrier, dropped 12.5 percent in Hong Kong to 98 cents, the lowest level in more than seven years.
To contact the reporter on this story: Irene Shen in Shanghai at ishen4@bloomberg.net
Last Updated: October 24, 2008 05:35 EDT
