Contingency plans in South Korea see Air Charter interest peek, while the word is obviously not getting out on airline investment as ETS performs as suspected

Victoria
By Victoria April 8, 2013 10:53

Contingency plans in South Korea see Air Charter interest peek, while the word is obviously not getting out on airline investment as ETS performs as suspected

Several things of note occurred in recent days. The EU Emission Trading Scheme preliminary stats show that the cargo majors failed to disclose data and could be up for a fine, and the figures also disclose exactly what we here said would happen three years ago in one of our first editorials – Alitalia would be the big winner and Ryanair the big looser in the first year of ETS. This was due to the allocation being tagged to fleet emissions when Alitalia had a very old fleet, its gain was obvious while the downside for Ryanair with the most modern fleet was also obvious as it expands year on year. Lookout for the full data reproduced in the forthcoming issue of Airline Economics. If you need the ETS airline data sheet then do let us know and we will send it on to you by email.

Meanwhile Air Charter Service is seeing a large number of contingency plan enquires from large corporations in South Korea due to the recent rhetoric of the North. Together with the threat of nuclear war, Bird flu continues to make waves in the APAC region with share prices of Taiwan’s three major airlines falling Monday by the maximum daily percentage amid worries that an outbreak in China would stifle demand for air travel across the Taiwan Strait.

Shares of EVA Airways, China Airlines and TransAsia Airways were all down by 7% today at the close. This further confirms that for the Taiwanese majors, mainland Chinese cross-strait traffic is now the key business driver. TransAsia executives said they have reduced the use of eggs and poultry meat in their in-flight meals and have stepped up disinfection of their aircraft. China Airlines has introduced in-flight air ventilation systems and is offering passengers free masks.

However – in all this did anyone notice some big smiles around the market of late? If you did those would have been on the faces of the people who choose to follow our editorial lead and invest in airlines. The Guggenheim airline ETF rose from $27.68 (when we here said it was a winner) to $43 in just over 12 months. You do not need an algorithm to know that is an exceptional return in this market. So it is a shame and a surprise to see that Guggenheim closed its fund a fortnight ago due to lack of demand. Those who invested got their return without transfer and exit fees – A huge win. Well done to them. This is a sad reflection on the ability of our industry to sell itself. Aviation is proof that any industry is a good investment if the timing is right.

Victoria
By Victoria April 8, 2013 10:53
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