Shares in airlines, once the darling of the market, have plunged dramatically.
Mutual funds sold RMB12.7 billionÂ ($1.85 billion) worth of airlines shares in the first quarter of this year and dumped another RMB7.3 billionÂ of shares in the second quarter.
Shares in China Southern Airlines accounted for about 40% and Air China accounted for 48%.
Ma Xiaoli, an analyst with CITIC Securities, said, ‘A weak economy, tightened visa regulations during the Olympic Games and the devastating earthquake in Sichuan Province all dampened demand for air travel, more than we expected/’
Air China handled 2.98 million passengers last month, dropping 6.8% from a year earlier, with the load factor decreasing 8.1% to 73.3%.
China Southern’s passenger volume dropped 2.3% and the load factor slid 1.4% to 75.1%.
Ma Xiaoli said, ‘The third quarter will still be an off-season for the aviation industry, but we expect that the market will recover in the fourth quarter and grow faster next year since some negative effects were one-off.’
Source: Shanghai Daily