Air China net profit surges to more than double
SHANGHAI: Air China, the nation's flag carrier, has said its net profit more than doubled in the first half of the year due to lower fuel prices, fuel hedging gains, and improving domestic travel demand.
The carrier posted a net profit of 2.9 billion yuan (424.5 million dollars) in the first six months of 2009, up 150 percent from 1.2 billion yuan a year earlier, a statement filed late Tuesday with the Shanghai Stock Exchange said.
Air China, which was operating a fleet of 255 planes as of the end of June, said its costs for the first half fell 16 percent year-on-year to 21.8 billion yuan, mainly because fuel prices had dropped 42.5 percent to 6.1 billion yuan.
The carrier, which suffered heavy losses in 2008 due to bad bets on fuel hedging contracts and shrinking travel demand, also booked a fuel hedging gain of 1.5 billion yuan after oil jumped 57 percent in the first half.
It said slumping demand for international air travel, due to the gloomy global economic outlook and fears over swine flu, was partially offset by better-than-expected domestic demand in the first half.
"The continuing global financial crisis and the outbreak of the Influenza A (H1N1) in the first half of 2009 brought enormous difficulties for the aviation industry," it said.
Air China, the nation's biggest international operator, said its overseas routes revenue fell 25.5 percent in the same period, while revenue from the international cargo service dropped 50.8 percent.
Revenue fell 12.7 percent to 22.4 billion in the first half, although revenue from domestic air travel rose 8.3 in the period from a year earlier.
To better weather the shrinking demand for international services, the firm said it had temporarily reduced the number of flights to Japan, South Korea, Europe and North America and postponed the resumption of its Sao Paulo route.