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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  International Consolidated Airlines Group, SA    IAG   ES0177542018


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Airlines Forced to Cancel, Reroute Flights After Hong Kong Shutdown -- Update

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08/12/2019 | 04:28pm EDT

By Austen Hufford, William Boston and Mike Bird

International airlines set about trying to reschedule flights for throngs of passengers caught in the political turmoil engulfing Hong Kong after authorities shut down the city's airport, one of the world's busiest hubs.

Plane tracking company Flightradar24 AB said a total of 187 flights in Hong Kong were canceled Monday. The disruption came after thousands of people descended on the arrival and departure halls to protest the police's handling of long-running demonstrations in the city. Check-in services were closed midafternoon, with many flights set to arrive canceled or diverted.

Arrival and departure information showed flight cancellations extending into Tuesday morning, threatening further disruption at an airport that serves as a gateway to Asia for many business and leisure travelers. Flightradar24 said 241 flights Tuesday were already canceled.

One passenger caught up in Monday's chaos was Richard Berta, who runs strategic partnerships in Asia for Alphabet Inc.'s Google. His plane was diverted to Guangzhou, China, shortly before it was expected to land in Hong Kong. Mr. Berta said passengers weren't allowed to leave the aircraft, which set off back to Ulaanbaatar, Mongolia, about 2 1/2 hours later.

His flight to Hong Kong was rescheduled for Wednesday but he hasn't heard when he would fly back to Singapore, where he lives and is expected to be at work Tuesday morning.

"I've got to reschedule a ton of meetings," he said.

Among major carriers Monday, American Airlines Inc. canceled its flight to Hong Kong from Los Angeles but said its flight from Dallas took off as scheduled, while United Airlines Holdings Inc. canceled a flight from Guam but ran flights from Chicago and New York as scheduled.

In Europe, British Airways, owned by International Consolidated Airlines Group SA, said its two flights from Hong Kong to London were affected by disruption. Germany's Lufthansa AG canceled two flights to Hong Kong scheduled to depart from Munich and Frankfurt, as well as two flights to Germany from Hong Kong.

"We can't check passengers into their flights in Hong Kong," a Lufthansa spokesman said. "We are monitoring the situation and will decide day by day about flights."

Qatar Airways said it redirected a flight destined for Hong Kong back to Doha shortly after the airport was shut down. The state-owned airline canceled both its flights from the Qatari capital to Hong Kong and warned disruption could extend into Tuesday.

Hong Kong's flag carrier, Cathay Pacific Airways Ltd., canceled dozens of flights to and from the city and said it wouldn't operate some flights on Tuesday either. It advised customers to postpone nonessential travel.

Cathay Pacific is the airline most affected by the stoppage as the city is its main hub, said Helane Becker, an aviation analyst with investment bank Cowen & Co. The impact could go beyond the disruptions themselves, she added, if tourists decide against visiting Hong Kong and chose to travel elsewhere, damping future air travel to the city.

"If I'm going to spend the thousands of dollars it costs to fly there, maybe it makes more sense for me to go elsewhere," Ms. Becker said.

The disruption Monday isn't the first time demonstrations in Hong Kong -- one of the world's leading financial centers -- have affected the airport, which last year handled more than 400,000 flights and 75 million passengers as well as 5 million tons of cargo. More than 200 flights were canceled a week earlier because of a citywide strike.

The protests erupted earlier this summer over proposed legislation that would have allowed anyone suspected of committing a crime in Hong Kong to be extradited to mainland China. Hong Kong is a part of China but its citizens, who lived for a century under British rule, enjoy more freedom and autonomy than those on the mainland.

While many stranded passengers expressed sympathy with the protesters, they also said they were frustrated.

"I had sympathy with the protesters, but I'm carrying my mother's ashes, and going to back to London for a funeral," said a British traveler whose Qatar Airways flight was canceled. "This is affecting ordinary people now."

Some people caught up in the unrest weren't set to even visit Hong Kong but simply were changing flights there.

Greg Smith, a 46-year-old consultant, planned his trip months in advance. He was flying with his wife and children to Sydney to surprise his parents on their 50th wedding anniversary. "I haven't seen them in a while so this was my way of making up," he said.

"My heart is with the protesters," he added, "but why take your anger on people who have nothing to do with the politics of Hong Kong? This makes me mad."

Bucknell University Professor Zhiqun Zhu's evening flight to Newark was canceled. He said fellow passengers lined up for hours, trying to get on different flights. As of 11:30 p.m. in Hong Kong he still wasn't booked on a new flight. Mr. Zhu and his family were planning to sleep in the airport after Cathay Pacific declined to provide them a hotel room, saying the cancellation wasn't the airline's fault. The airline didn't immediately respond to a request for comment.

"We are not going to sleep well tonight and, tomorrow, if we fly somehow, it's going to be a 15-hour flight," Mr. Zhu said.

Still, not all of those affected had negative views of the protesters.

"I'm all about it. I'm an American, they're fighting for their freedom too," said Mark Vahala, a U.S. citizen on an Asian business trip, whose flight to Singapore was canceled.

--Preetika Rana and Michael Amon contributed to this article.

Write to Austen Hufford at austen.hufford@wsj.com, William Boston at william.boston@wsj.com and Mike Bird at Mike.Bird@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
ALPHABET -0.72% 1229.84 Delayed Quote.17.69%
AMERICAN AIRLINES GROUP -1.10% 27.99 Delayed Quote.-12.83%
INTERNATIONAL CONSOLIDATED AIRLINES GROUP, SA 2.81% 5.412 End-of-day quote.-21.79%
LUFTHANSA GROUP AG 0.57% 14.075 Delayed Quote.-28.55%
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Financials (EUR)
Sales 2019 25 771 M
EBIT 2019 3 304 M
Net income 2019 2 312 M
Debt 2019 6 668 M
Yield 2019 5,91%
P/E ratio 2019 4,94x
P/E ratio 2020 4,65x
EV / Sales2019 0,68x
EV / Sales2020 0,63x
Capitalization 10 735 M
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Technical analysis trends INTERNATIONAL CONSOLIDATED
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Mean consensus BUY
Number of Analysts 16
Average target price 7,60  €
Last Close Price 5,41  €
Spread / Highest target 114%
Spread / Average Target 40,5%
Spread / Lowest Target -8,86%
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William Matthew Walsh Chief Executive Officer & Director
Antonio Vázquez Romero Chairman
Enrique Dupuy de Lôme Chávarri Group Chief Financial Officer & Executive Director
Patrick Jean-Pierre Cescau Senior Independent Director
Kieran C. Poynter Independent Non-Executive Director
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