CHINA Southern Airlines Co, the country's biggest carrier, gained the most in almost a month in Hong Kong trading yesterday after returning to profit in the first quarter on currency gains and rising traffic.

The Guangzhou-based airline climbed 2.2 percent to close at HK$4.60 (59 US cents) per share, after surging as much as 8.9 percent in the morning. The Guangzhou-based carrier reported a first-quarter profit of 796 million yuan (US$114 million) yesterday.

The yuan appreciated 4 percent in the first quarter, cutting the value of China Southern's dollar-denominated debt.

Economic growth enabled the carrier to boost first-quarter passenger numbers 11 percent, even as the worst snowstorms in 50 years disrupted flights during China's peak travel season.

"It's better than expected," said Kelvin Lau, an analyst at Daiwa Institute of Research in Hong Kong. "China Southern is a good example that proves traffic growth may benefit airlines' earnings this year."

China Southern, which carries about a third of the country's air travelers, flew 14 million passengers in the first quarter. Cargo volume rose 13 percent to 215,000 tons.

Snowstorms disrupted flights before and during Chinese New Year in February.

China Southern, Air China Ltd and China Eastern Airlines Corp all posted profits last year.