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Air China says first-half net profit up three-fold on strong demand, higher yuan

Air China says first-half net profit up three-fold on strong demand, higher yuan

Chinese carrier Air China reported Wednesday that its first half net profit more than tripled from a year earlier, boosted by strong passenger demand and the rising value of the Chinese yuan.
Net profit for the six months ending June 30 surged to 1.57 billion yuan (US$207 million;euro151 million), or 3.4 times earnings of 458 million yuan in the same period a year earlier, according to the Beijing-based Air China, one of China's three main state-owned airlines.
First-half revenues rose 17 percent to 23.3 billion yuan (US$3 billion;euro2.2 billion) from 19.9 billion yuan in the first half of 2006.
Strong demand from business travelers amid the booming Chinese economy helped the airline overcome surging jet fuel prices.
"The company vigorously pursued various strategic cooperation opportunities and made significant progress in transforming its organization, expanding its hub and route networks, improving its customer service systems and further enhancing its brand," Air China's chairman, Li Jiaxiang, said in a statement.
It said its performance for the last six months was also enhanced by the contribution of subsidiaries jointly held with Hong Kong-based carrier Cathay Pacific Airways, in which it and its subsidiary, China National Aviation Co., hold a total 17.5 percent stake. Cathay in turn holds a 17.5 percent stake in Air China, according to its Web site, and the two airlines have cooperative marketing and operational arrangements.
Air China handles Cathay's ticket sales in mainland China while Cathay handles sales for Air China in Hong Kong, Macau and Taiwan. The airlines also code share and share profit on flights between Hong Kong and major cities in mainland China.
Air China's exchange rate gains in the first half of the year amounted to 867 million yuan (US$114.8 million;euro84 million), the company said, as the strengthening yuan reduced the relative size of the airline's dollar-denominated debt.
Passenger traffic in the period rose 14.4 percent to 33.3 million, with both domestic and international traffic showing double-digit growth.
Air China, as the national flag carrier with its base in Beijing, stands to benefit next year from the influx of travelers expected during the 2008 Olympics in Beijing, given its status as the only passenger airline "partner" of the Games.
The airline was set up as the international carrier division of the Civil Aviation Administration of China and began operating as an independent but state-owned airline in 1988. It listed shares in Hong Kong and London in 2004 and in Shanghai in 2006.
Despite the better-than-expected earnings report, Air China's shares fell 5.3 percent to 8.22 Hong Kong dollars early Wednesday as the Hang Send Index was dragged lower by an overnight plunge on Wall Street.


Updated : 2021-04-13 21:27 GMT+08:00