This could be great news for the air travel industry.
Goldman’s proprietary ‘GS Investment Banking Travel Index’ has rebounded substantially as of late, implying that corproate travel is likely to rebound as companies become more comfortable with travel spending for employees.
In Asia, the firm favours Chinese carriers due to their exposure to the high potential Chinese domestic travel market.
While the Asian airlines sector has rallied and re-rated in terms of total enterprise value to fair value (EV/FV), it remains well below where it has been. Thus there’s potentially more room for Asian carriers to run should Goldman’s index prove useful.
(Via Goldman Sachs, Asia Pacific: Transportation: Airlines, Hino Lam, 1 December 2010)