Air China plans to open more routes to Japan this year in the wake of an open skies agreement reached by the Chinese and Japanese governments.
The accord was signed by Japan's Ministry of Land, Infrastructure, Transport and Tourism and the Civil Aviation Administration of China earlier this month.
Although further talks for unlimited traffic in and out of Beijing, Shanghai, and Tokyo - which account for 85 per cent of China-Japan traffic - are continuing, incremental increases in the air traffic rights between the two countries are in place.
Japan is the most profitable international route for the national flag carrier. Jia Tiesheng, vice-chairman of Air China's commercial committee, said yesterday the airline would launch a new service to Nagoya and add more flights to Osaka this year.
Air China will also offer extra flights to Japan from second-tier cities such as Hangzhou, Dalian and other cities in the country's northeast.
Jia said that after years of losses Air China's service to the US had started to turn around following the use of Boeing 777-300 ER aircraft to replace the B747-400 aircraft used on its Los Angeles route. The smaller aircraft enabled the airline to operate two daily flights instead of one to Los Angeles.
But the outlook for its cargo business remained bleak, airline vice-president Fan Cheng said. Air China Cargo, a joint venture between Air China and Cathay Pacific Airways, lost 600 million yuan (HK$733 million) in the first half.
Separately, Shanghai-based China Eastern Airlines yesterday posted a sharp fall of 64.6 per cent in net profit in the first half to 806.9 million yuan from 2.28 billion yuan a year earlier.
The company blamed weak domestic and international aviation markets, high and fluctuating crude oil prices and increasing competition from high-speed railways on the mainland.
Revenue was 40.2 billion yuan, up from 38.1 billion yuan a year earlier. It said the fuel was its largest operating expense, with the average fuel price being 10 per cent higher than a year ago. It carried 34.6 million passengers in the first six months, up 4.12 per cent year on year.
Additional reporting by Sophie Yu