China National Aviation Co (CNAC) anticipates the strong economic recovery that brought it back to the black last year will spill into this year. The red chip, a unit of No1 mainland carrier Air China, was turned around with an attributable profit of $367.47 million last year from an $18.74 million loss in 2003. The positive outlook comes as Air China is in advanced talks with Swire Pacific and Hong Kong-based carrier Cathay Pacific Airways about a possible cross-shareholding alliance and the sale of CNAC's associate, Dragonair. 'The impetus of a thriving tourism industry in Greater China is anticipated to persist with the opening of Hong Kong Disneyland expected [in the autumn] and a prospering gaming sector in Macau,' CNAC chairman Kong Dong said in a statement yesterday. 'The group, banking on a diversified business portfolio and a positive macro-environment, is anticipated to achieve healthy growth in 2005.' Benefiting from record passenger and cargo traffic at Dragonair and Air Macau, CNAC boosted turnover 52.5 per cent to $1.87 billion last year. This offset a 102.96 per cent surge in fuel costs to $387.91 million last year. Dragonair, owned 43.29 per cent by CNAC and 25.5 per cent by Cathay and Swire, saw pretax profit surge 10 times last year from on a 43.8 per cent rise in turnover. Air Macau's turnover also soared 52.5 per cent last year. Earnings per share at CNAC stood at 11.09 cents, against a loss per share of 0.57 cent previously. The final dividend was raised 66 per cent to one cent per share, bringing the full-year payout 77 per cent higher at 1.6 cents per share.