Hong Kong and Shanghai-listed airlines again rose yesterday as international crude prices fell below US$122 a barrel, easing concerns that high fuel costs would erode profitability. China Eastern Airlines recorded the biggest increase. Its H shares closed 3.2 per cent higher at HK$2.58, while its A shares climbed 4.66 per cent to 8.08 yuan (HK$9.24). A China Daily report said the company was to resume talks with Singapore Airlines about a share sale after the Olympics. However, China Eastern director Luo Zhuping later in the day said the company would 'consider whether the talks will be resumed after the Olympics' but he did not promise that they would. Singapore Airlines and Temasek Holdings, Singapore's state-linked investment firm, signed a preliminary deal last September to take a 24 per cent stake in China Eastern for US$923 million. But the deal was voted down by minority shareholders in January after China National Aviation Corp, the parent company of Air China, indicated it would make a higher offer. China Eastern's direct competitor, Shanghai Airlines, closed 2 per cent higher at 6.63 yuan in the A-share market. China Southern Airlines, the mainland's biggest carrier, rose 2.68 per cent to HK$3.45, while Air China closed 2.94 per cent higher at HK$4.56. Cathay Pacific Airways was up 1.2 per cent at HK$15.16. Airlines around the world are suffering from oil prices that rose as high as US$147 a barrel this month. Some airlines cut staff and routes and raised both fares and fuel surcharges. China Southern Airlines earlier this month announced that it planned to cut management salaries by 10 per cent, which will help reduce costs by 1.3 billion yuan this year. A Morgan Stanley report has estimated that if oil prices were to remain at US$135 a barrel, the airline industry would lose at least US$6 billion this year compared with a US$5.6 billion profit last year. The bank also said that surviving airlines in such a tough operating environment would emerge stronger by taking more market share. The mainland aviation industry posted a 23 per cent drop in net profit to 3.7 billion yuan in the first half due to slower passenger growth amid high oil prices. The growth in passenger volume slowed to 7.7 per cent during the period compared with more than 14 per cent a year earlier.