Higher fuel prices hit Chinese airline profits

Updated 2017-05-03 14:00:26 Xinhua

Despite robust passenger growth, most listed Chinese airlines failed to see increased profits in the first quarter due to rising oil prices.

All publicly traded Chinese carriers have released their first-quarter reports, and most reported waning profitability as higher fuel costs hit profit margins, Xinhua-run China Securities Journal reported Wednesday.

China Southern Airlines, the country's biggest carrier by passenger volume, saw net profits slump 42.44 percent year on year to 1.55 billion yuan (about 225 million U.S. dollars) in the first quarter, despite a 10.58-percent growth in business revenue to 30.97 billion yuan. Rising fuel prices pushed up China Southern Airlines' operational costs by 21 percent year on year.

Pressure from higher fuel costs are reflected in other carrier reports. Air China, the country's national flag carrier, saw net profit plunge 39.8 percent year on year to 1.47 billion yuan. Hainan Airlines saw net profit drop 42 percent to 835 million yuan.

Smaller carriers saw their profits declining by a small magnitude, with Juneyao Airlines and Spring Airlines registering net profit declines of 7.5 percent and 17.3 percent, respectively.

China's air passenger trips rose 13.8 percent year on year in March 2017, picking up pace from the 9.8 percent increase in February, and 11.8 percent for 2016, according to the Civil Aviation Administration of China.

China ranks second in the world in terms of air passenger and cargo, trailing the United States.

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