Air China posts 74% slide in H1 net profit
By Yang Jian |
August 29, 2012, Wednesday
|
Print Edition
Print Edition
AIR China, the country's flagship airline, posted a 74 percent drop in first-half net profit amid high fuel costs, foreign exchange losses and a slowdown in international and domestic traffic.
The airline, Asia's second-largest by market value, reported a net profit of 1.06 billion yuan (US$167 million) for the first six months, the carrier said in a filing to the Shanghai Stock Exchange yesterday. Its sales rose 5.4 percent to 47.5 billion yuan.
The carrier filled a smaller percentage of seats in the period than a year earlier. The yuan also weakened against the US dollar, ending large currency gains that have previously supported Chinese airlines' earnings.
"The global economic downturn, surging fuel prices along with the weakened aviation market and severe competition in the industry imposed great pressure on the carrier in the first half of the year," Wang Changshun, chairman of the carrier, said in the filing.
"Business travel demand in China dragged because of the economic slowdown, which was worse than expected," according to Li Lei, an analyst at China Securities Co.
Moreover, the freight market has also seen a depression around the world that shrunk the carrier's income on freight by 2.8 percent in the period.
China Southern Airlines, Asia's biggest carrier by passenger numbers, said first-half profit tumbled 84 percent in a filing to the stock exchange on Monday, citing similar reasons as proffered by Air China.
The airline, Asia's second-largest by market value, reported a net profit of 1.06 billion yuan (US$167 million) for the first six months, the carrier said in a filing to the Shanghai Stock Exchange yesterday. Its sales rose 5.4 percent to 47.5 billion yuan.
The carrier filled a smaller percentage of seats in the period than a year earlier. The yuan also weakened against the US dollar, ending large currency gains that have previously supported Chinese airlines' earnings.
"The global economic downturn, surging fuel prices along with the weakened aviation market and severe competition in the industry imposed great pressure on the carrier in the first half of the year," Wang Changshun, chairman of the carrier, said in the filing.
"Business travel demand in China dragged because of the economic slowdown, which was worse than expected," according to Li Lei, an analyst at China Securities Co.
Moreover, the freight market has also seen a depression around the world that shrunk the carrier's income on freight by 2.8 percent in the period.
China Southern Airlines, Asia's biggest carrier by passenger numbers, said first-half profit tumbled 84 percent in a filing to the stock exchange on Monday, citing similar reasons as proffered by Air China.
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