ZCZC
BCN-18
CHINA-EARNINGS-AVIATION
China airlines post mixed results, warn of headwinds
BEIJING, March 30, 2019 (BSS/AFP) – Chinese carriers posted mixed results for
2018 but have warned of stronger headwinds in the coming year, which could
continue to put a damper on profits.
China Southern Airlines, the country’s largest carrier by passenger
numbers, reported a 3.71 percent decrease in net profit, posting 8.82 billion
yuan ($1.31 billion).
This was mainly due to increased operating expenses from higher passenger
volume and rising jet fuel prices, the company said in an earnings report
filed to the Hong Kong Stock Exchange late Friday.
It also warned that big fluctuations in the yuan this year, along with an
ongoing increase in oil prices, are likely to weigh down profits.
Net profit for the country’s second-largest airline by passengers, China
Eastern Airlines, slumped 56.98 percent to 2.93 billion yuan in 2018, it
reported Friday evening.
The airline put this down to an increase in operational costs, chiefly due
to the 25 percent jump in jet fuel costs, resulting in additional spending of
6.72 billion yuan.
“China’s civil aviation industry is expected to continue to maintain a
relatively fast pace for development, but (the) domestic and international
macro-economic situation and changes in trade relations, oil prices and
exchange rate fluctuations will bring uncertainties to the development of the
industry,” it said.
But rival Air China reported a net profit of 7.35 billion yuan, a 1.47
percent increase, in a filing on Wednesday, crediting its push to upscale
operations despite the impact of “unfavourable factors” like higher oil
prices.
The Civil Aviation Administration of China reported in January that the
country’s aviation sector saw a 10.9 percent jump in passenger traffic in
2018 to 610 million and a 4.6 percent increase in cargo and mail
transportation, with the trend set to continue in 2019.
BSS/AFP/SR/1845 HRS