Cathay Pacific Airways Ltd, Singapore Airlines Ltd and other Asian carriers will probably retain more traffic than rivals in Europe and the US in the event of war in Iraq, an industry group said.
The Association of Asia-Pacific Airlines (AAPA) said the region's airlines won't be harmed as much as US carriers if war breaks out. A US airline group said earlier this week losses at American carriers may rise US$4 billion to US$10.7 billion.
The International Air Transport Association has said a US-led war in Iraq may cause global air traffic to repeat its plunge of between 15 percent and 20 percent during the 1991 Gulf War.
Asian airlines, supported by more regional traffic and China's expansion, will hold out better, analysts and investors said.
"Asian airlines will not suffer as badly in terms of traffic because a much smaller percentage of their traffic is US dependent," Richard Stirland, director general of the Asia-Pacific association, said in an e-mail.
The group represents 17 carriers in the region, including Japan Airlines System Corp, the world's third-largest carrier, and Korean Air Co.
The AAPA doesn't have estimates of its own for the effect a war may have on earnings and the US estimates are "in any case highly speculative, as they depend on so many unknowns," Stirland said.
Investor optimism about Asian airlines has helped their stocks. The Bloomberg Asia Pacific Airlines Index of 17 carriers has fallen about 3 percent this year.
Shares of Singapore Air rose as much as 3.1 percent to S$10.10 (US$5.76), while Cathay rose as much as 0.9 percent to HK$11.10 (US$1.42) as of 9:29am local time. Japan Airlines rose as much as 1.3 percent to Japanese Yen 239 (US$2.01) and Korean Air rose as much as 15 percent to 9,780 won (US$7.88).
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