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CCTV Script 26/08/14

— This is the script of CNBC's news report for China's CCTV on August 26, Tuesday.

Welcome to the CNBC Business Daily, I'm Qian Chen.

It's a heavy week for earnings from Asia's carriers this week.

Fuel costs, overcapacity - and now Ebola scares and geopolitics - all combining to threaten Asian airlines' profitability.

Let's look at the broader picture with Adam Bakhtiar.

The airline industry can be very much a hit & miss story with any number analysts, and even more investors quick to point out the vulnerabilities & unexciting returns of the overall industry, with ROE's in the single digits at best.

And although the global economy may be recovering and stock markets generally in a bullish mode, the airline sector in the Asia Pacific region is still facing numerous challenges.

This week earnings reports are due out for some of the biggest players in the industry, from up in China to down in Australia, and of course New Zealand later on this week. And so far looking at the results that have come out, it's definitely more of a negative bias. Take a look at this map here, showing you the red planes ticketing down indicating losses in the industry so far, be at the quarter earnings and the half year earnings and the green planes obviously indicating profits from the latest quarterly results. But even those carriers are really pointing to slowing profit growth, to the likes of Singapore Airlines, showing operating profit down 50 plus percent.

But there's been a particularly sort of fragile bias towards carriers in the South East Asian region, be it for geopolitical tensions in this case of Thailand. We've seen Thai Airways into its 5th consecutive quarter of losses, or down to Malaysian Airlines has of course experienced two dramatic tragic disasters that led to the privatization. Down to Australia, where we've seen some carriers there, losing quite bit of momentum.

But for all the negative headwinds out there, they can include of course currency headwinds, the high fuel costs, and of course the competition, which is fairly agnostic with the legacy premium carriers and also the discount plays, there are a lot of success stories as well to tell you about. Take a look at the YTD gains of some of the native carriers in the region. Actually, from the research I did, some of the interesting success stories have been the carriers that went through significant financial difficulties and they do include the likes of Japan Airlines, which back in 2010 went through bankruptcy, delisted and came back to the market as one of the top performers in terms of YTD. And then Air New Zealand, top of the list there, so 32 percent of market gains in terms of YTD. Air New Zealand, the company basically guiding this fiscal year, they are going to see record double-digit growth in terms of profits. A number of analysts out there also say that it has been one of the standout performers in the airline industry as it too recovered from the depths of its financial crisis. You may remember back in the early 2000s where the New Zealand government had to pump in quite a great deal of money into that carrier.

I'm Qian Chen, reporting from CNBC's Asian headquarters.

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