The Canadian Press - ONLINE EDITION

State-owned Air China first-half profit sinks by half as weaker yuan hikes costs

  • Print

HONG KONG - Air China says its six-month profit fell by more than half as the weakening yuan raised financing costs and other expenses.

The state-owned carrier reported late Tuesday that profit fell to 474.4 million yuan ($77 million) for the January-June period from 1.1 billion yuan last year.

Revenue rose 7 per cent to 49 billion yuan, highlighting the underlying strength of China's travel market.

The carrier booked a net foreign currency loss of 721 million yuan ($117 million) for the half year compared with a net gain of 1.2 billion yuan the year before.

The earnings of China's airlines are sensitive to fluctuations in the currency, which depreciated more than 2 per cent in the first half of the year. That made it costlier for the airlines to buy jet fuel and repay debt used to buy airplanes from Boeing and Airbus, which are paid for in dollars.

China's two other big state-owned carriers, China Southern Airlines and China Eastern Airlines, have warned investors to expect smaller profits because of yuan weakness when they release earnings on Friday.

Air China Ltd. said "enthusiasm for outbound travel remained high and the market for international passengers continued to be strong," although some regions and routes faced higher operating pressures. The company said that it was cutting capacity to Southeast Asian destinations in the wake of political instability in the region.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

HSC ready for Ebola

View more like this

Photo Store Gallery

  • RUTH BONNEVILLE / WINNIPEG FREE PRESS June 23, 2011 Local - A Monarch butterfly is perched on a flower  in the newly opened Butterfly Garden in Assiniboine Park Thursday morning.
  • Marc Gallant / Winnipeg Free Press. Local- WINTER FILE. Snowboarder at Stony Mountain Ski Hill. November 14, 2006.

View More Gallery Photos

Poll

Are you still on the Bombers' and Jets' bandwagons?

View Results

View Related Story

Ads by Google