China Southern Airlines announced a 46.1 per cent increase in net profit to 347.97 million yuan (about HK$325.7 million) for the six months to June 30 due to improvements in passenger load factors. The mainland's largest carrier said sales jumped 12 per cent to 7.06 billion yuan compared with 6.32 billion yuan a year ago. Despite the increases, no dividend will be paid. China Southern's improved performance has been driven by the mainland's quickening economic growth and a recovery in other Southeast Asian economies. Total traffic revenue was up 11 per cent to 6.77 billion yuan, of which 6.18 billion yuan was passenger based. About 78 per cent of passenger revenue was generated from domestic routes. The carrier experienced a 31 per cent increase in international passenger revenue, resulting from rising demand in Southeast Asia and improvement in the Guangzhou to Los Angeles route. The airline said stringent Civil Aviation Administration China policies against domestic ticket discounts and strengthened regulations on the agency market also contributed to the favourable results. Yan Zhiqing, vice-chairman and president, said that administration policies to ensure orderly market competition through mergers and consolidation was expected to enhance overall efficiency within the industry. Mr Yan said the policies would also allow economies of scale. Operating profit rose to 798 million yuan from 791 million yuan in the same period a year earlier.