TIN news: Most Chinese carriers are reporting declines in first-quarter net profits because of rising fuel expenses that collectively increased 40%-50%.
However, Shanghai-based China Eastern Airlines posted a 1Q net profit of CNY2.8 billion ($406 million), up 8.3% over net income of CNY2.6 billion in the year-ago quarter. Operating revenue for the 1Q rose 4.3% year-over-year (YOY) to CNY24.5 billion against a 16.2% increase in operating expenses to CNY21.5 billion. China Eastern cited record-high passenger boardings and a boost of direct ticket sales as reasons for the profit increase.
Shanghai-based China Eastern transported 26.6 million passengers in the first quarter, up 9.3% over the year-ago quarter. China Eastern’s low-cost subsidiary China United Airlines’ direct sales revenue was up 25.4%, which accounted for 75.4% of the LCC’s total sales revenue.
Air China reported a 1Q net income of CNY1.5 billion, down 39.8% over net income of CNY2.44 billion in the 1Q 2016. Operating revenue rose 10% YOY to CNY29 billion against a 17% increase in operating expenses to CNY23.4 billion. Besides the higher fuel costs, the Beijing-based carrier also posted a CNY141.6 million loss in equity investment, in contrast with the CNY330.7 million profit in investment gains for the same period last year.
Guangzhou-based China Southern Airlines turned in a 1Q net profit of CNY1.6 billion, down 42.4% YOY compared to net income of CNY2.7 billion in the previous year’s first quarter. Operating revenue for the 1Q jumped 10.6% YOY to CNY31 billion while operating expenses increased 18.6% to CNY29.4 billion.
Hainan Airlines earned a 1Q net income of CNY835.14 million, down 42.1% over net profit of CNY1.4 billion in the year-ago quarter. Because of its merger with Tianjin Airlines, operating revenue rose 44.2% YOY to CNY14.5 billion against a 70.5% increase in operating expenses to CNY7 billion.
Shanghai-based Juneyao Airlines posted a 1Q net profit of CNY420.4 million, down 7.5% compared to net income of CNY454.2 million in the same quarter last year. Juneyao said its Guangzhou-based low-cost subsidiary 9 Air earned net income of CNY6 million in the first quarter. Juneyao’s operating revenue grew 22% YOY to CNY31.1 billion against a 30.2% increase in operating expenses to CNY2.7 billion.
Shanghai-based Spring Airlines reported a 1Q net income of CNY303.3 million, down 17.3% compared to net profit of CNY366.7 million in the year-ago quarter. Operating revenue increased 23% YOY to CNY2.6 billion, while operating expenses rose 41.4% to CNY2.5 billion.