Air China net soars 242.5pc on strong demand, forex gains

Air China, the most profitable carrier on the mainland, posted better than expected results with net profit increasing 242.5 per cent due to robust demand from travellers and exchange gains from yuan appreciation.

Net profit of the Beijing-based airline increased to 1.57 billion yuan, of which 50 per cent was attributed to the exchange gain, compared with earnings of 457.97 million yuan a year earlier.

The airline made a forecast on July 27 that its interim profit would increase more than 2,000 per cent based on the 45 million yuan net profit it reported in the same period last year. However, the company restated last year's net profit to 458 million yuan in accordance with new accounting standards.

Rival China Southern Airlines last week reported net profits of 168 million yuan due to 1.26 billion yuan in exchange gains compared with a 784 million yuan loss during the same period last year.

Air China's operating profits increased to 1.69 billion yuan from 240.62 million yuan despite surging oil prices. Earnings per share amounted to 13.2 fen compared with 4.9 fen for the same period last year. The board of directors did not recommend a dividend.

Sales were up 17.9 per cent to 22.73 billion yuan, thanks to a 14.6 per cent growth in passenger numbers. The airline carried 16.68 million passengers in the first half. It also moved 454,000 tonnes of cargo in the period, up 18.4 per cent.

The percentage of seats filled with passengers per flight, the passenger load factor, rose to 75.8 per cent from 73.8 per cent, which in turn boosted the passenger gross margin to 16.35 per cent from 15.7 per cent.