Poor 1H09 unjustified 5
Lagging behind 5
Earnings rebound 6
2H09 recovery scenario 7
Demand recovery 7
Modest capacity 9
Load factor set to improve 10
Yield improvement the next 10
Risk scenarios 11
Currency exposure 11
Fuel exposure 12
Interest rate exposure 13
Conclusion 14
Valuation and momentum 15
More upside ahead 15
Fuel remains the key risk 16
SIA and Cathay good value 16
Earnings momentum 16
Stock recommendations 18
Initiate OW(V) on Qantas 18
SIA versus Cathay Pacific 18
How far can PRC airlines go? 19
Turning positive on… 20
Company data 23
Air Asia (AIRA.KL) 24
Air China (0753.HK) 26
Cathay Pacific (0293.HK) 28
China Airlines (2610.TW) 30
China Eastern Airlines (0670.HK) 32
China Southern Airlines (1055.HK) 34
EVA Air (2618.TW) 36
Korean Air (003490.KS) 38
Malaysia Airlines (MASM.KL) 40
Qantas Airways (QAN.AX) 42
Singapore Airlines (SIAL.SI) 44
Thai Airways (THAI.BK) 46
Disclosure appendix 49
Disclaimer 52
Contents