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Stocks

Cathay Pacific shares gain on expected restructuring

Speculation also affects Taiwan airlines

HONG KONG -- Cathay Pacific Airways shares continued to rise on Tuesday, briefly touching 11.2 Hong Kong dollars in the morning, up 3.13% from Monday.

Local and foreign media have reported the Hong Kong airliner will likely unveil a business restructuring plan this week, expected to include reductions in manpower and other costs. Expectations of improved business conditions grew among investors.

The Hong Kong Economic Journal on Tuesday said Cathay Pacific is expected to announce its new business strategy during a senior management meeting scheduled for Wednesday. Reuters and other foreign media speculated that, in addition to job cuts and cost reductions, the airline will likely shift more flights on its regular routes to its short-haul arm Cathay Dragon. In December, Cathay Pacific revealed that the business review could affect all employees.

Meanwhile, on the Taiwan stock market, China Airlines shares stayed weak, except for a brief rise at the opening of the morning session. Eva Airways stock remained steady.

Taiwan's Economic Daily News reported online on Tuesday that, should the Hong Kong airliner give up some routes connecting to Taiwan, China Airlines, operating flights to and from Europe, and Eva Airways which has links with North America, could seize the opportunity to step in. 

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