Airline stocks rallied yesterday on expectations that airline companies and travel agencies would benefit from Taiwan and Japan’s signing of an open skies agreement on Thursday, easing the restrictions on passenger flights between the two countries.
The share price of the nation’s second-largest carrier, EVA Airways Corp (EVA, 長榮航空), jumped 4 percent to close at NT$20.80, outperforming the TAIEX, which rebounded 0.8 percent.
China Airlines Ltd (CAL, 中華航空), the nation’s biggest airline, and TransAsia Airways Corp (復興航空), also saw their shares rise 2.86 percent and 2.87 percent to NT$14.40 and NT$19.70 respectively.
The advances lifted the tourism sub-index by 1.07 percent.
“The rise in airline stocks indicates that investors are optimistic about the aviation agreement, since Japan has long been one of the major travel destinations for Taiwanese,” Marbo Securities Consultant Co (萬寶投顧) president Tsai Ming-chang (蔡明彰) said by telephone.
The three air carriers said they welcomed the agreement and planned to launch new routes, as well as to increase the number of flights according to customer demand.
“Next year, we plan to increase the number of weekly flights to popular cities in Japan, such as Tokyo, Osaka, Fukuoka and Nagoya,” China Airlines said in a statement on Thursday.
Smaller carrier TransAsia, which currently offers only chartered flights to Japan, said it would benefit from the pact, allowing it to expand in Japan in line with its search for overseas growth opportunities.
TransAsia said it also hoped to launch new flights to Gimpo airport in Seoul, South Korea, after Taiwanese and South Korean representatives reached an agreement to open direct flights between Taipei International Airport (Songshan airport) and Gimpo yesterday.
However, Tsai said the rally in airline stocks could be short-lived as rising crude oil prices led by uncertainties in the Middle East could weigh on the sector’s outlook.
Shares of Phoenix Tours International (鳳凰旅行社), the only travel agency traded on the GRETAI Securities Market, surged 2.94 percent to close at NT$70, as the open skies agreement was also seen as a boon to tourism.
The nation’s two largest listed hotel operators — Formosa International Hotels Corp (晶華國際酒店) and Ambassador Hotel (國賓飯店) — closed up 1.7 percent and 1.83 percent at NT$448 and NT$36.10 respectively, data showed.
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