Talk of Air China seeking a stake in Shanghai Airlines helps drive share price rise
Shares of mainland carriers surged by up to 15 per cent yesterday on hopes that efforts to establish direct air links between the mainland and Taiwan would accelerate.
Ma Ying-jeou's victory in last Saturday's presidential elections in Taiwan fuelled such expectations because his party, the Kuomintang, is seeking to improve cross-strait ties.
A report that Air China is seeking further co-operation with Shanghai Airlines also helped fuel share price gains.
Analysts said expectations of direct air links - in addition to weakening oil prices - boosted airline stocks, although the benefits of such a plan was difficult to quantify since no concrete recommendations were yet on the table.
Shares of Air China rose 15.17 per cent to HK$6.91, China Southern Airlines was up 10.96 per cent at HK$6.38, and China Eastern Airlines advanced 7.34 per cent to HK$4.24.