China Eastern profit plunges 98pc as China Southern posts 1b yuan loss
China Southern Airlines, the country's largest carrier by fleet size and passenger volume, posted a first-half loss of 1.02 billion yuan (HK$1.28 billion), as mainland airlines were hit hard by exchange losses caused by unprecedented depreciation of the yuan this year.
China Southern Airlines, the country's largest carrier by fleet size and passenger volume, posted a first-half loss of 1.02 billion yuan (HK$1.28 billion), as mainland airlines were hit hard by exchange losses caused by unprecedented depreciation of the yuan this year.
Interim profit at rival China Eastern Airlines Corp plunged 97.7 per cent from the same period last year to 14 million yuan.
Revenue growth of 9.15 per cent to 50.21 billion yuan at Guangzhou-based China Southern Airlines did not prevent it from sliding into the red after reporting a profit of 302 million yuan in the same period last year.
Fluctuations in the exchange rate … affected our profitability and development
The airline carried 47.39 million passengers, 8.19 per cent more than last year, though the passenger load factor dropped 0.9 percentage point to 79.2 per cent.
Revenue at Shanghai-based China Eastern rose 2.68 per cent to 42.59 billion yuan. It carried 40.42 million passengers, up 6.94 per cent. Both airlines blamed exchange losses for their disappointing performance.
China Southern, which derives more of its revenue from international and long-haul routes than China Eastern, said "special circumstances" also affected its Southeast Asian and Xinjiang routes.
Mainland airlines are prone to currency risks as they have yuan-based revenue and dollar-based debt for their aircraft purchases and leases.