Hainan Air's profit soars - ResearchInChina
Date:2007-07-18
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HAINAN Airlines (stock code: 600221) expects first-half profit to surge more than eightfold due to reduced fuel costs and a stronger yuan, the country's fourth-largest carrier by fleet size said yesterday in a statement to the Shanghai Stock Exchange yesterday.
The Haikou-based carrier, partly owned by the United States billionaire George Soros, said net income could increase by more than 750 percent from the same period a year earlier.
Profit in the first half of 2006 was 20.8 million yuan (US$2.7 million), or 0.006 yuan a share, the company said.
Chinese airlines have improved performance because of a stronger yuan, which helps cut the value of their US-dollar-denominated debt, as well as lower jet fuel costs.
The yuan closed at 7.5625 against the greenback yesterday. The currency has gained more than eight percent since July 2005 when China's central bank ended a decade-long fixed-rate regime that pegged the value of the yuan to the US dollar.
China has cut the price of aviation oil four times since the beginning of this year. Fuel accounts for about 40 percent of Chinese carriers' operating costs, industry experts said.
The nation's airlines made a combined profit of 1.54 billion yuan in the first six months of this year, the General Administration of Civil Aviation of China, the industry watchdog, said earlier.
Hainan Airlines also said earlier that it expects to increase sales at least 15 percent this year amid rising business and leisure travel.
Passenger traffic in China will rise by an average annual rate of 7.2 percent until 2025, according to Airbus SAS, the world's biggest commercial aircraft maker.
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