September data points to weak results from Chinese airlines

Weak September operating data from mainland airlines suggests their third-quarter results, due to be released later this month, may disappoint, even though it is traditionally their best-performing quarter.

Traffic figures from Air China, China Southern Airlines and China Eastern Airlines Corp, the Big Three state-owned airlines listed in Hong Kong, show growth slower than analysts had expected and a decline in passenger load factor, the industry's measure of how full planes are.

Analysts said sluggish domestic demand meant the carriers' profitability for the rest of the year would hinge on improvements in international passenger yields.

Air China posted the highest load factor - 79.4 per cent - but that was 1.9 percentage points lower than a year ago, while the factor on international routes fell 3.9 points to 77.9 per cent.

Daiwa Securities analyst Kelvin Lau said the figures were slightly below expectations and attributed it to the carrier's aggressive international capacity growth of 14 per cent.

Vivian Tao, a Citi analyst, said the three carriers' operating data for the past three months showed their average load factor had fallen 1.2 percentage points to 80.4 per cent for the quarter, weaker than the first half.