Update | Hainan Airlines profit down 25.35pc
Hainan Airlines, the mainland's largest privately held carrier, posted a 25.35 per cent drop in first-half net profit to 482.8 million yuan (HK$608.9 million) as an unprecedented depreciation of the yuan eroded earnings.
Hainan Airlines, the mainland's largest privately held carrier, posted a 25.35 per cent drop in first-half net profit to 482.8 million yuan (HK$608.9 million) as an unprecedented depreciation of the yuan eroded earnings.
Core revenue grew 2.92 per cent to 15.47 billion yuan as it carried 16.92 million passengers, 15.62 per cent more than in the same period last year, the company said in a filing with the Shanghai Stock Exchange.
The airline is the mainland's fourth-largest after state-owned Air China, China Southern Airlines and China Eastern Airlines.
"The results are much better compared with Air China," said Li Xiaolu, a Shanghai-based analyst with Capital Securities.
Air China reported on Tuesday net profit fell 55.42 per cent to 510 million yuan even though revenue rose to 49.9 billion yuan.
Li said Hainan Airlines had been more profitable than the three bigger airlines because it mainly focused on the domestic market and regional routes with less competition.
"It connects cities to Haikou [where it is based], and those are popular tourism routes, so it has always had a higher load factor," she said.
Li said the carrier had also been hit less by the national anti-graft campaign, which had eroded the Big Three's revenue from premium classes.
Financial costs jumped 73 per cent on a net exchange translation loss of 337 million yuan in the first half, against a gain of 330 million yuan a year earlier.
The yuan declined as much as 3.39 per cent against the US dollar in the first four months of the year after steadily appreciating in the past decade.
The weakening of the yuan has badly hit mainland airlines with large dollar-based debt.
