CHINA Southern Airlines Co, the country's biggest carrier in terms of fleet size, returned to profit in the first quarter as the yuan's appreciation offset disruptions caused by the worst snowstorms in 50 years.

The carrier's Xiamen Airlines unit also agreed to buy 20 Boeing Co 737 aircraft, costing US$75 million apiece at list price, the airline said in a Hong Kong Stock Exchange statement yesterday. China Southern made a net income of 796 million yuan (US$114 million) compared with a loss of 188 million yuan a year earlier under domestic accounting standards.

The Guangzhou-based airline made a profit after the yuan strengthened about 4 percent in the first quarter, cutting the value of its dollar-denominated debt. That helped cover the impact of bad weather that forced Chinese carriers to cancel more than 8,000 flights in January and February, the country's peak travel season.

"China Southern is the largest beneficiary of the yuan appreciation," Li Jun, an analyst at Everbright Securities Co in Shanghai, told Bloomberg News. "The airline's focus on domestic traffic also means that it will benefit from the Olympic Games this year."

Xiamen Airlines will receive the 20 Boeing planes between April 2014 and October 2015. China Southern will issue 4 billion yuan of bonds on the mainland to help pay for the aircraft, it said in a separate statement. The carrier is expanding its fleet as air travel is affordable to more people.

China Southern's first-quarter passenger numbers rose 11 percent to 14 million, while cargo volume rose 13 percent to 215,000 tons, the company said in an earlier statement. Last year, passenger numbers jumped 16 percent to 56.9 million, with cargo climbing 6.5 percent.

China Southern, Air China Ltd and China Eastern Airlines Corp all posted profits last year, helped by the rising yuan. That was the first time in six years China's "big three" carriers were simultaneously profitable under international accounting standards.