Air China Has Long-Haul Fans
BEIJING -- Even amid rising fuel costs, heightened security risks and increasing competition from budget carriers, analysts are bullish about one airline as a longer-term investment: Air China.
China's state-owned flag carrier plans to make an initial public offering later this year, listing as much as 30% of the company in Hong Kong and New York. The IPO, underwritten by Merrill Lynch and China International Capital, will involve an estimated $500 million in Class H shares and American depositary receipts. The Class H shares, issued by companies incorporated in mainland China but listed in Hong Kong, are expected to make their debut at between two Hong Kong dollars and three Hong Kong dollars each, or between about 25 U.S. cents and 40 U.S. cents each.
"With this IPO, investors are going to be looking for position and potential in a massive market that will produce long-term gains," says Ian Thomas, a senior consultant with the Center for Asia Pacific Aviation in Sydney.
The short-term picture may not be so rosy. When Air China goes public, it will join Chinese peers China Eastern Airlines and China Southern Airlines, both of which went public in 1997. China Southern shares have yet to regain their IPO price of HK$4.70 each, falling slightly to HK$2.88 each yesterday, while China Eastern recouped its per-share offer price of HK$1.38 earlier this year. The stock fell 1.3% to HK$1.51.
Air China has long served as China's chief international carrier. For all the prestige, its international routes have hurt its bottom line. With little brand value or pricing power abroad, and a weak base of first- and business-class customers, it has faced difficulty competing against better-known international airlines. Analysts say this could change amid growing China demand for international flights and with a new management that grasps the importance of improving service to win over global travelers.
The greatest source of optimism for the flag carrier is China's domestic air-travel market. Domestic-passenger traffic rose 4.1% last year from 2002, despite an outbreak of severe acute respiratory syndrome, which caused travel to grind almost to a halt in China for several months in 2003.
Fuller Potential
Air China executives seem to realize the airline's international routes can be developed to fuller potential if they are well integrated with its rapidly growing domestic network. Indeed, the carrier's greatest advantage may sit just down the road from its headquarters: Beijing's international airport.
The capital city is already a popular destination for foreign tourists and business travelers but it also is becoming a growing hub for domestic-passenger and cargo traffic, similar to the way airports in Dallas or Chicago are used in the U.S. Air China now accounts for 45% of domestic traffic through the Beijing airport.
"They have realized that there's no point in having a small share of a great hub, and that they've got to expand in a coherent, convincing manner around that hub," says Jean-Louis Morisot, analyst for Goldman Sachs in Singapore.
The airline has grown to 131 passenger planes and 115 destinations during the past few years, aided by a 2000 directive from regulators under which the big-three airlines each acquired smaller regional carriers.
Continued Restructuring
Air China has been reallocating fleet assets since, putting recently acquired China Southwest's long-haul Airbus A340s, once confined to the short trek between Lhasa in the Tibet autonomous region and the southwestern city of Chengdu, on international routes. Continued restructuring could reduce other major operating costs and increase the airline's long-term profitability, analysts say. And its VIP fleet of six wide-body aircraft, charged with transporting state leaders, may finally be taken off its books.
The end of the state's jet-fuel monopoly promises another long-term boon. China's World Trade Organization commitment mandates that state-set fuel prices, currently about $120 per ton above global market rates, fall to the international standard by 2006, when the oil wholesale market will be opened to foreign investors. Authorities may also liberalize the system for placing plane orders. Historically, the government, rather than the carriers, decided on plane purchases, which have been used as political bargaining chips in Beijing's dealings with the U.S. and Europe.
Not all analysts are so bullish on Air China, especially before details of its IPO are made public. "Air China is an incredibly complicated organization," says Zhuo Yue, senior aviation analyst with Guangfa Securities in Guangzhou, echoing Hong Kong analysts' concerns that its restructuring process hasn't been completed. Air China has offered no comment on which of its diverse assets would be injected into the listed company.
Still, Air China, like the other two big carriers, seems poised to mature with its market. "They're going to become the three airlines for a massive, domestic, market," Goldman Sachs' Mr. Morisot says. "It's the kind of consolidation Europe is trying to do with great pain, and which the U.S. would do if it could. In the long term, we're extremely bullish."
投资国航须立足长远
尽管面临著燃油价格上涨，安全风险升高，以及低成本航空公司异军突起等诸多不利因素，但分析师们仍然看好中国国际航空公司(Air China, 简称：国航)的前景，并将其视为中长线投资的对象。
这家中国国营旗舰航空公司准备于今年晚些时候进行首次公开募股(IPO)，在香港和纽约两地发行的股票有可能达到该公司扩大后总股本的30%。本次IPO的承销商是美林公司(Merrill Lynch)和中国国际金融有限公司(China International Capital Corp.)。国航将发行约5亿美元的H股和美国存托凭证。H股是指中国大陆公司在香港发行的股票。预计首日上市时国航H股的开盘价将在每股2至3港元之间，相当于每股25至40美分。
亚太航空中心(Center for Asia Pacific Aviation)的咨询师伊恩?托马斯(Ian Thomas)表示，国航此次IPO为投资者提供了投资中国这个巨大的航空市场并由此获得长期收益的机会。
但国航的短期前景可能并不怎么乐观。上市后国航将加入到中国东方航空公司(China Eastern Airlines)和中国南方航空公司(China Southern Airlines)的阵营当中，成为国内上市航空公司的一员。东方航空和南方航空均于1997年上市。南方航空周二收于2.88港元，距离4.70港元的首次公开募股价仍有不小的差距。但东方航空于今年早些时候已回升至1.38港元的首次公开募股价，该股周二收盘跌1.3%，至1.51港元。
长期以来国航一直被视为是中国首屈一指的国际航空公司，但实际上是盛名之下难负其实，因为国航的国际航班拖累了其整体盈利水平。由于没有多少品牌价值以及海外定价能力，再加上头等舱和商务舱销路不佳，国航很难同知名的国际航空公司相抗衡。但分析师们表示，这种情况可能将得到改观，理由是中国对国际航班的需求不断增长，以及国航新组建的管理班子意识到了改善服务以吸引国际旅客的重要性。
中国国内航空市场是人们对国航最感乐观的地方。去年，尽管爆发非典型肺炎(SARS)的几个月里中国的航空市场极度萧条，但国内航班的客流量仍比2002年增长了4.1%。
国航管理层似乎意识到，如果能同其迅速发展的国内运营网络充分整合，国际航班可以发挥更大的潜力。确实，国航最大的优势可能就在于它的总部位于北京的首都国际机场。
作为中国首都的北京市不但吸引了众多的国外游客和商务人士，而且还成为一个规模正在不断扩大的国内客运及货运航空中心。这一点堪与达拉斯或芝加哥机场在美国的地位相媲美。目前，国航各种国内航班的客流量已占到进出首都国际机场国内航班总客流量的45%。
高盛公司(Goldman Sachs)驻新加坡的分析师让-路易斯?莫里索(Jean-Louis Morisot)称，国航意识到没有理由在一个重要的航空中心只扮演一个小角色。国航管理层已经在以持之以恒、令人信服的方式围绕首都国际机场作文章，扩充自己的实力。
2000年中国监管部门颁布了一项行政指令，要求中国三大航空公司收购规模较小的地区性航空公司。几年来通过兼并其他航空公司，国航现已拥有131架客机，航空目的地达到115个。
从2000年中国监管部门颁布指令时起，国航就一直在重新调配资源。国航最近把原属于中国西南航空公司(China Southwest)的空中客车(Airbus) A340型长途客机用于国际航班，而以前这种客机只是往返于拉萨市和成都市之间做短途飞行。分析师们表示，资源的重新调配可以减轻其他几项重要的运营成本，还可以增加国航的长期盈利能力。另外，专门负责运送国家领导人的6架宽体客机最终可能也会被剥离出去。
另外，从长远来说，国家取消燃油的垄断经营也会使国航从中受益。中国加入世界贸易组织(WTO)时的协议规定，中国将于2006年把国内油品批发市场向外资开放，目前比国际市场价格每吨高出约120美元的燃油价格将同国际市场接轨。此外，监管当局还可能下放飞机订单的采购权。历来是中国政府，而不是各航空公司决定从哪家飞机制造商购买产品，而且中国政府还经常把飞机订单用作讨价还价的砝码，向美国和欧洲施压以达到某种政治目的。
不过，并不是所有的分析师都如此看好国航的前景，尤其是在当前国航IPO的具体细节尚未对外宣布的情况下。广发证券(Guangfa Securities)的航空业分析师卓越(Zhuo Yue, 音译)表示，国航的组织结构非常复杂。驻香港的分析师们也担心国航的资源整合计划尚未完成。国航拒绝透露准备把哪些资产注入上市公司。
不过，国航和另外两大航空公司的实力都有望随著中国航空市场的繁荣而壮大。高盛的莫里索表示，中国规模庞大的国内航空市场最终将由三家大航空公司来主导。中国航空市场正在经历的整合既是欧洲试图克服种种艰难所希望达到的，也是美国所追求的目标。因此从长远来讲，中国航空市场的前景还是非常令人看好的。
