China Eastern Airlines Corp says profits for last year are expected to be less than half the 536.34 million yuan it made in 2004 because of increased fuel costs. The Shanghai-based carrier issued the warning yesterday in a statement to the Hong Kong stock exchange. China Eastern saw profit fall 67 per cent to 263 million yuan in first nine months of last year after reporting a loss of 471 million yuan in the January-June period. It means that the company made a 734 million yuan profit in the third quarter, more than half of it due to the appreciation of the yuan that cut the cost of financing US dollar debt. 'This year will be another lean year as the reform of the pricing mechanism at mainland airports is likely to increase airlines' costs even further,' said an analyst at Shenyin Wanguo Research and Consulting. Analysts say the reform of airport fees to be introduced in March is likely to cost the three main carriers - China Eastern, China Southern Airlines and Air China - between 400 million yuan and one billion yuan this year. China raised the price of aviation fuel four times last year, tracking rises on international markets. China Eastern's profit warning had been widely expected. Its shares rose a cent to $1.26 yesterday. The stock has fallen 1.6 per cent since the middle of last year while the H-share index has risen more than 24 per cent.