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. A report by ICBC International recently said Air China was "well-positioned in both domestic and international markets" and remained as its top pick among the country's airlines. JP Morgan said in a traffic monitor for last month that Air China's passenger operations were weaker than normal, with lower load factors on domestic routes. But it noted that the carrier's cargo business improved with load factors "rising above 60 per cent for the first time in 14 months". Shares of Air China edged up 0.36 per cent to close at HK$5.51 yesterday ahead of the profit announcement, outpacing the performance of the benchmark Hang Seng Index, which dropped 0.4 per cent. Separately, China Eastern Airlines posted a 20.4 per cent fall in net profit for the third quarter to September from a year ago to 2.63 billion yuan. Net profit in the first nine months of this year fell 37 per cent to 3.63 billion yuan. Revenue rose 2.8 per cent to 25.13 billion yuan in the quarter and 3.6 per cent to 65.53 billion yuan in the nine months. The Shanghai-based carrier is planning to issue shares to its parent in return for a capital injection of about 2 billion yuan. A JP Morgan research note this month said China Eastern's cargo traffic growth and loads were weaker than the other two leading mainland carriers - Air China and China Southern Airlines - and set the company's share price target at HK$3. Shares of China Eastern climbed 1.14 per cent to close at HK$2.66 yesterday ahead of the profit announcement.