Airlines: Morgan Stanley says in sector note, that operating profit (OP) for Asia Pac airlines has peaked in 2010. Expects OP to fall in 2011 but to diverge sharply between airlines, hence prefers defensive plays.
Notes the exceptional air cargo growth in 9M10 has slowed in 4Q10 and 2011, and higher oil prices could lead to a 25-30% decline in OP for this year...
Tips best ideas to own: SIA, Tiger, Qantas, Thai and Air Asia.
Says avoid: China Airlines, EVA, Cathay Pacific, Air China, China South, and China Eastern.
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