Profits at Air China and China Eastern Airlines fall
Air China posts 16.5 per cent drop in net income for the quarter while China Eastern tumbles 20.4 per cent amid weaker passenger loads
Air China, the mainland's flagship carrier, said net profit in the third quarter dropped 16.5 per cent to 3.17 billion yuan (HK$3.93 billion) as revenue rose to 28.7 billion yuan from 28.1 billion yuan a year ago.
Net profit for the first nine months of this year nearly halved to 4.24 billion yuan from 7.86 billion yuan.
Revenue rose 4 per cent to 76.3 billion yuan.
The Beijing-based carrier scrapped a 1.05 billion yuan share sale plan to its parent company last week and aims to turn to alternative funding sources such as bonds to raise money for capital expenditure next year, according to people close to the company.
The airline is set to take delivery of 56 new aircraft, which will cost the company 26 billion yuan, next year.
In the third quarter, oil prices fell, easing the carrier's fuel bill.
Jet fuel costs make up at least 40 per cent of airlines' operating costs, but the increase in fuel expense can only be partially passed on to passengers through fuel surcharges.