Paris attacks weigh on Airline, travel stocks but impact seen short-lived

'Whenever there's terrorism, businesses are affected' says aviation research firm Endau Analytics


Afp November 16, 2015
PHOTO: EPA

SINGAPORE: Airline and travel-related stocks tumbled in Asia Monday following the deadly terror attacks in Paris, but analysts and industry players said they expect the impact to be short-lived.

Travellers from the region cancelled trips as France grappled with the aftermath of the carnage that left at least 129 people dead and more than 350 wounded.

The horrific events come just a little over two weeks after a Russian passenger plane came down in Egypt's Sinai peninsula, killing all 224 people on board, which Islamic State militants have claimed responsibility for.

"Whenever there's terrorism, businesses are affected. Worst hit are commerce and tourism, and as a consequence, airlines," said Shukor Yusof, an analyst with aviation research firm Endau Analytics.

On tenterhooks: European nations bolster security checks

Most stock markets fell across Asia, with airlines and travel-related firms among the most hurt.

In Shanghai, Air China, China Eastern Airlines and China Southern Airlines each lost more than two percent, while tourism firms also retreated -- China CYTS Tours Holding lost 1.28 percent and China International Travel Service fell 1.05 percent.

Hong Kong flag carrier Cathay Pacific was down 2.7 percent.

"The airlines and tourism companies are affected by the Paris attack," Haitong Securities analyst Zhang Qi told AFP. "But it's more of a psychological impact on the stock market," he said.

But Hong Kong-based financial analyst Kevin Tam said "the actual impact won't be that much because of the geographical concentration. There will be more material impact on European and American travel-related companies".

Singapore Airlines was down 0.92 percent in late afternoon trade in the city-state and South Korean flag carrier Korean Air closed 3.33 lower while rival Asiana Airlines finished down 3.32 percent in Seoul.

Top South Korean tour operator Hana Tour closed 8.94 percent lower following a barrage of trip cancellations after the South Korean government advised nationals to "refrain from" travelling to Paris and its surrounding areas.

Sydney-listed flag carrier Qantas was down 1.7 percent and Virgin Australia tumbled 6.5 percent percent as Air New Zealand was 2.8 percent lower in Wellington.

Japan Airlines closed down 2.95 percent and rival All Nippon Airways declined 3.46 percent. HIS, a major travel agency, finished 5.02 percent due to trip cancellations.

"France is a main route. Japanese airlines get the most profit from international routes," said Hajime Tozaki, a commerce professor at Waseda University.

Indonesia's Garuda was down 1.32 percent in afternoon trade but Fazal Bahardeen, chief executive of Singapore-based Muslim travel specialist Crescentrating, said the attacks are unlikely to deter tourism.

Britain's Gatwick Airport evacuates one terminal as precautionary measure

"More and more travellers  are becoming determined not to let the terrorist fear mongering dictate their travel plans," he told AFP.

Andrew Herdman, director general of the Association of Asia Pacific Airlines, urged travellers to react prudently to terror attacks.

"Past experience tells us that we must be careful not to let our emotions overwhelm good judgment, and care is needed to ensure that we do not over-react in ways which may only amplify the damage inflicted upon society," he told AFP.

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