Air China reports huge leap in profits

File picture: David Gray

File picture: David Gray

Published Aug 28, 2015

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Beijing - Air China, the country's flag carrier, said its net profit surged more than 720 percent year-on-year in the first half of 2015, supported by lower fuel prices.

The company made net profits of 4.19 billion yuan ($655 million) in the first half, up strongly from 510.37 million yuan in the same period last year, it said in a statement filed to the Hong Kong stock exchange late on Thursday.

“The global aviation industry was generally healthy with sustained growth in demand and relatively low fuel prices,” Air China said, adding a recovery in the world economy and a “steady” Chinese economy supported the company.

China's growth is actually slowing. The economy expanded 7.0 percent in each of the first two quarters of this year, lower than the 7.4 percent growth last year, which was its weakest since 1990.

The airline said its operations benefited from lower oil prices, which contributed to a near 30 percent reduction in fuel costs for the first half.

Air China carried 43.67 million passengers in the first half, up 8.79 percent from the same period last year, it said.

The airline's stock gained 8.90 percent in Shanghai trading but closed 4.00 percent down in Hong Kong on Friday after the results announcement.

Another of the country's biggest carriers, China Southern Airlines, on Friday reported a net profit in the first half of 3.48 billion yuan, according to a statement to the Hong Kong stock exchange, having made a net loss of 1.06 billion yuan in the same period last year.

The airline, based in the southern city of Guangzhou, credited lower fuel and economic improvements for the turnaround.

China Southern shares jumped 8.05 percent in Shanghai but dropped 1.95 percent in Hong Kong before the results announcement.

AFP

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