[cwoodward]

Cathay shares, as the below piece outlines have risen over 21% since the beginning of June
Perhaps this is a good time to buy given the bullish profit outlook and strong recovery of some airline shares.
Singapore airlines stock has also risen by 11% in the period

The confidence the market is showing in Cathay shares bodes well for us frequent flyers as regards fleet renewal and route expansion.

There has been talk in HK (just talk nothing sustentive) re the airline expanding its African routes with Durban and Casablanca mentioned. Both routes make sense as there is a dearth of routes into Africa from Asia and a least to me Casablanca looks like a route with huge potential for Cathay. Casablanca looks to make very good sense as it is the home base of OneWorld member Royal Air Maroc who operate routes across North Africa and are expanding south and eastwards

Extract from yesterdays longer Bloomberg report

‘A reversal in the fortunes for shares of Cathay Pacific Airways Ltd. and Singapore Airlines Ltd. may extend further as Hong Kong’s flagship carrier springs back to life after years of pandemic restrictions.

A jump in buy recommendations in July for Cathay has pushed the ratio of bullish views to the most in more than a decade thanks to cheap valuations and the prospect of a return to profit. Meanwhile, a flurry of downgrades since June due to valuation concerns has hurt sentiment for Singapore Airlines.

Read More: Cathay Pacific Forecasts Bumper Profit With Bonuses for Staff

The outlook for the battered Hong Kong carrier has started to turn around following its profit forecast for the first six months of 2023, which will end a run of losses as the airline buckled under the city’s harsh travel restrictions. Cathay’s shares have started to outperform its rival’s in recent weeks, and may rebound further if its earnings — scheduled for Aug. 9 — unleashes further positive momentum.

Cathay’s post-pandemic earnings power has been “underestimated” and there is “room for upward Street earnings revisions,” JPMorgan Chase & Co. analysts including Karen Li wrote in a July 24 note. The carrier preserving its leading market share in Hong Kong is a key positive, making it well-positioned to benefit from mainlanders’ long-haul transit flight demand, Li added.

Shares of Cathay have rallied 21% since the start of June, making it the best performer among Asia peers and the first time that it has beat Singapore Airlines for two consecutive months since December. Singapore Airlines, meanwhile, has risen 11% in the period……..’

[AndrewinHK]

Not all that surprising, a catch-up trade, SQ is still worth more than double that of CX. Investor-wise, notable to remember that SQ also pays an annual dividend of around 5%, while CX currently pays no dividend. Hong Kong GDP growth is a concern, the latest data showed growth of only 1.5% and that is with the border reopened and consumption vouchers still flowing. The question remains as CX brings more capacity back, will the demand side keep up, I think that is open to debate. RE new routes, one would think given HK’s recent outreach to Saudi, that previous routes like Jeddah might return before any new long thin routes.

[cwoodward]

Hardly comparing apples with apples Andrew given that Singapore airlines is a Government controlled airline.

[AndrewinHK]

Cwoodward, in the title of this thread you openly compared SQ to CX, I simply continued that comparison.

[cwoodward]

That is just nonsense Andrew I made no comparison – actually I quoted only media reports prominently mentioning that S’air shares had also risen and only because it demonstrated that the local markets were strong on airline shares.

Unlike yourself I would not expect Cathay or Swire to feel any need to rush back to the middle east routes other than on their merits given that Cathay is not a government controlled airline and not unlike some compelled to follow their governments line.

I believe it very possible that Cathay will be looking at new routes as the airline industry is fast moving and they have not been in a position to be a player in the expansion game for now well over 3 years while some others have greatly expanded their networks in that time to the detriment of Cathay in some cases.

New routes to Africa from Asia I believe offer a real opportunity and Hong Kong’s geographic position is ideal for this sort of route expansion I believe.

[AndrewinHK]

Cwoodward, you posted a story that compares SQ and CX stock performance, and you titled the thread as such. I added some additional context. I would expect CX to defend its market share by building out its existing routes back to pre-pandemic levels, it makes little sense for them to launch new long thin routes before they have resumed destinations like Barcelona, Cape Town, Dublin, Gatwick, Rome, Seattle, Washington DC, Bahrain, Jeddah.

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Abidjan, tomyam42

[cwoodward]

The title merely repeated that of the heavily referenced story quoted

Cape Town is already specifically announced as are almost all of the other destinations that you mention to be resumed ether later this year or in 2024. Dublin was already dropped as a destination prior the pandemic. My memory may be wrong here but I believe that Jeddah was dropped in 2014 at the same time as they dropped Abu Dhabi from the schedule
No airline can afford to stand still in a fast moving marketplace and I do not expect to do so.
As you seem to have set yourself as a critic of all of my posts here at least try to be factually accurate

[AndrewinHK]

Cwoodward, I am not critiquing your posts, I am providing some balance, you have a tendency to promote any story or headline that is pro CX, and you seem to dislike any context added, fostering discussion is all part of how a forum is supposed to work, I find a few frequent posters here get rather riled if one doesn’t respond bravo to every post, I enjoy your postings, and anything CX related, I just often have a different perspective, which I would hope some find helpful. I would suggest Doha is much more likely than somewhere like Casablanca (which would be a 14 /15 hour non stop flight), Qatars ownership stake of CX, once aircraft are available I would expect it to be added, given Iberia and JAL have recently announced, leaving Qantas and CX as the large one world carriers not to serve (I doubt Qantas ever will given its relationship with EK).

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TGRW

[Inquisitive]

SQ and CX can be compared as both have somewhat similar business model. Both airlines do not have any domestic market and rely on international passengers and their respective base airport as transit hubs.

However I believe SQ manages its business much more efficiently. SQ is owned by government is not a good argument. It get some support as its largest shareholder during rights issue or bond issues but I think those are also underwritten by other financial organisations. I think SQ runs its business fairly independently and did very well to overcome Covid related loss.

When reducing manpower, SQ actively helped the affected employees for placement at other industries. Their hold and sustainment strategy was excellent so that when things started becoming normal, they were first to sprint out from the block and made good profit among Asian airlines
SQ also rewarded it employees very handsomely when they made bumper profits. CX followed that in smaller scale, but I think SQ did much better than CX.

I have no connections with SQ except I hold a small amount of stocks, my observations are based on various financial reports and the ground reality that I experienced how fast SQ came back to normal post-Covid. I think only SQ and 3 big American Airlines managed the post-Covid situation successfully.

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AndrewinHK

[TominScotland]

cwoodward, given that Air China has a 29.99% stake in CX, it is perhaps a little naïve to suggest that Cathay Pacific operates without government ‘oversight’ if not direct, operational control. Tamasek Holdings (a state agency) has a controlling 53.5% stake in Singapore Airlines.

[christ]

I appreciate some insight re cathay but the constant posts are excessive – it is like the cathay version of vintagekrug! I think the focus should be on what impacts business travellers v share price etc. We do not need to hear every day re new routes as we can do for any airline.

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ASK1945

[cwoodward]

Not comparable cases as Cathay of course has a cross shareholding in Air China Tom

[cwoodward]

I dont disagree that this thread has generated to many posts princeably because I became rather annoyed at another poster constantly jumping my posts. All rather silly really.

[cwoodward]

Tom, I omitted to mention in reply that the Sing government holds in excess of 75% of Singapore Airlines stock given that their Temasek Holdings holds an additional 22.12% of the stock thus truly a government owned major airline that is seldom seen these days.

[Woodpecker]

At the end of the day, it’s the airline’s performance that should be the criteria for judging.

Principally, we appreciate an airline because of competency in three factors of service. On the ground, in the air & the administrative back office (website, bookings, customer service, etc.).

Both CX & SQ have consistently been at the top in all three areas, unlike say some Middle East airlines which may have better service in the skies, but lack consumer redressal. As long as the service is good, it wouldn’t matter to me who owned the airline.

Personally, I have no issues with cwoodward’s posts which keep us regularly updated with CX news. It is always good to have more information.

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Abidjan

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