AIRLINE SHARES OUTPERFORM MOST MARKETS AS CONFIDENCE RISES - IATA

KUALA LUMPUR, Feb 4 (Bernama) -- Shares of airline companies have
outperformed most financial markets in early 2010, the International Air
Transport Association (IATA) says.

In a statement Wednesday, it said financial markets began to have more
confidence in the prospects for airline profitability, pushing airline share
prices up almost five per cent in January.

The past month also saw US$1 billion being raised by airlines in Asia and
the United States, including a small amount of equity in Tiger Airways' initial
public offering, taking the total cash raised on the markets since early 2009 to
over US$31 billion.

IATA said jet fuel prices spiked above US$91 per barrel in January but the
markets expected this trend to flatten as a result of new oil supplies coming on
stream coupled with flat demand in Organisation for Economic Co-Operation
Development countries.

"The crack spread rose in January as refiners maximised production of
heating oil at the expense of other middle distillates, but even at 14 per cent
this is low relative to historic norms due to excess refinery capacity," it
added.

Meanwhile, air travel was on the increase albeit lagging behind the upturn
in air freight whose capacity had started to rise but at a much slower pace than
the surge in demand, it said.

"Airlines have reduced both seat and freight capacity partly by keeping
aircraft on the ground. Although aircraft are full again the airlines' assets
are still underutilised," IATA said.

It said that in 2009, deliveries of 1,245 new jets and turboprops exceeded
storage and retirements by almost 800 aircraft.

Despite cuts of seven per cent in passenger seat capacity and 10 per cent in
freight capacity, the size of the in-service fleet grew by over three per cent
-- a combination achieved by cutting average hours flown.

-- BERNAMA