Asian Airlines: Morgan Stanley has sector report. Note that difficult Operating Year for the Airline Industry and prefer quality defensive airline earnings exposure for FY11, expect operating profit to fall. IATA cut global net profit outlook for the airline industry to US$4.1b from US$8.6b for this yr….
House more optimistic in earnings outlook than IATA for APAC airlines, but less bullish than market consensus, about 10-20% below consensus. Believe mkt expectations could be disappointed, particularly for the North Asian airlines. Best ideas are SIA, Qantas, Tiger and Air Asia. Recommends avoiding CAL, EVA, CPA, Air China, CSA and CEA.
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