Air China net down 13% due to rising fuel costs

PTI Beijing | Updated on August 26, 2011

Air China, the country’s largest international carrier, has posted a 13.44 per cent year-on- year decline in net profit to 4.06 billion yuan ($634.87 million) for the first half of 2011 due to high fuel costs.

The airline’s revenue stood at 45.13 billion yuan during the period, up 31.55 per cent from a year earlier, the state-owned carrier said in a filing to the Shanghai Stock Exchange.

High oil prices have greatly reduced the carrier’s profits, as its fuel costs have surged by 51.41 per cent year-on-year to total 5.36 billion yuan over the past six months, Air China said in a statement.

Due to declining demand in the global cargo transportation market, its cargo load factor shrunk by 0.67 per cent to 58.53 per cent, even though overall cargo and mail volumes edged up slightly by 4.76 per cent year-on-year to 570,400 tonnes in the first half, it added.

The carrier further said domestic travel demand remained robust, despite the introduction of high-speed trains that reduced the travel times on the ground drastically.

Air China has carried 28.82 million passengers on domestic routes in the past six months, a 33.58 per cent increase vis-a-vis the year-ago period, with its passenger load factor rising by 4.35 percentage points to 82.43 per cent.

Meanwhile, it also saw a 428 per cent year-on-year rise in foreign exchange gains — amounting to 1.2 billion yuan — during the period on the back of a stronger yuan, a Xinhua report quoted the carrier as saying.

On its outlook for the second half of the year, Air China said it will increase marketing efforts in international territories, as well as improve its cost structure to cope with the pressure of rising oil prices.

Air China’s earnings per share stood at 0.33 yuan in the first six months of 2011, down 19.51 per cent vis-a-vis the year-ago period, while its total assets rose 5.8 per cent to 164.22 billion yuan.

Published on August 26, 2011

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