You are here
Hong Kong airport chaos gives big boost to rivals across mainland border
[HONG KONG] Disruptions at Hong Kong’s international airport are lifting shares of airports just over the mainland border.
Shenzhen Airport soared by the 10 per cent daily limit following a 3.7 per cent gain Monday, while Guangzhou Baiyun International Airport Co. rose 5.4 per cent after rallying 6.1 per cent yesterday, when protesters brought Hong Kong’s airport to a standstill.
Meanwhile, Cathay Pacific Airways, already under pressure from Chinese authorities after some employees joined protests, extended its decline to trade at the lowest since May 2009.
Citic Securities 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.
In a notice late Monday, 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 and Air China could also benefit, Citic’s analysts 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, rose as much as 0.9 per cent in Hong Kong on Tuesday before paring gains as more flights were cancelled. China Southern slipped 0.2 per cent and Cathay fell 4.4 per cent.
Normal operations have resumed at Hong Kong's international airport, the busiest in Asia, since Tuesday morning.