Tuesday , December 10 2019

HK airport chaos gives huge boost to rivals across border


Disruptions at Hong Kong’s international airport drove big gains in shares of airports just over the mainland border.
Shenzhen Airport Co soared by the 10 percent daily limit, while Guangzhou Baiyun International Airport Co rose 4.5 percent to a record high. They also rallied, when protests first brought Hong Kong’s airport to a standstill and flights were cancelled. Cathay Pacific Airways Ltd, already under pressure from Chinese authorities, extended its decline to close at the lowest since April 2009.
Citic Securities Co said international airlines may reevaluate Hong Kong’s role as an international hub and the flights they allocate there. That will help Shenzhen establish itself as a hub in the longer run, analysts Liu Zheng and Hu Shimin wrote in a note.
Meanwhile, ICBC International Research Ltd analyst Zhao Dongchen rated Cathay a “strong sell” and warned of “irreversible damage” to the airline’s brand. Zhao’s HK$6 price target implies another 37 percent decline from the carrier’s current level in Hong Kong.
In a notice, the Civil Aviation Administration of China said it was boosting transport capacity in airports in the Guangdong-Hong Kong-Macau area to support travel between the mainland and Hong Kong.
China Southern Airlines Co and Air China Ltd could also benefit, Citic’s Liu and Hu said, as some passengers switch from Hong Kong to Guangzhou and Shenzhen, where they are the biggest carriers in terms of weekly flights. Air China, Cathay’s second-largest shareholder, swung between gains and losses in Hong Kong before closing down 0.2 percent, while China Southern advanced 0.9 percent.

Airport cancels flight check-ins

Hong Kong’s airport halted check-ins for remaining departures for a second straight day, as embattled local leader Carrie Lam warned that the city risked sliding into an “abyss.”
Hundreds of black-shirted protesters staged a sit-in at the departures hall at Hong Kong International Airport, preventing checked-in passengers from reaching their planes. Airlines including Cathay Pacific had already cancelled hundreds more flights on Tuesday, the day after the government decided to briefly shut the airport during a mass demonstration in the arrivals area.
Thousands of black-clad demonstrators occupied the airport following a weekend of violence that saw police fire tear gas into a subway station and rubber bullets at close range. Crowds of demonstrators congregated again at the airport, and the main terminal’s departures gates were forced to close.

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