CHINA Southern Airlines Co, Asia's largest carrier by passenger numbers, boosted first-half profit fivefold as a stronger yuan outweighed rising fuel prices and disruptions caused by snowstorms and an earthquake.

Net income rose to 847 million yuan (US$123 million), or 0.19 yuan a share, from 168 million yuan, or 0.04 yuan, a year earlier, the airline said in an e-mailed statement yesterday. Total operating revenue rose 9.1 percent to 26.8 billion yuan.

China Southern lowered the value of its dollar-denominated debts after the yuan gained 6.6 percent in the first half, about as much as it did in the whole of last year. That helped offset the cost of dealing with passengers stranded by snowstorms in February and of operating relief flights following the earthquake in Sichuan Province in May, Bloomberg News said.

"It's been an abysmally bad year for Chinese airlines," said Li Lei, an analyst at China Securities Co in Beijing. "Fortunately, the yuan didn't let them down."

China Southern announced a plan to save 1.3 billion yuan this year by trimming costs and infrastructure investments. That included cutting the pay of Chairman Liu Shaoyong and other executives by 10 percent from July.

"The group expects to undergo a long period of hardship," Liu said in the statement.

The carrier will also redeploy capacity and seek to raise more revenue from first and business-class cabins to boost its performance, he added.

China Southern, like Air China and China Eastern Airlines Corp, has raised surcharges and trimmed services to cope with rising fuel prices. The government allowed carriers to increase levies on domestic flights as much as 50 percent from July 1.

China Southern's passenger numbers climbed 5.7 percent to 28 million in the first six months. It filled 73.1 percent of available seats, a 1.2-percentage-point increase.

Chinese airlines reported a combined 5.4-percent growth in first-half passengers, lagging the aviation regulator's forecast for a 14-percent increase in full-year numbers. "Traffic is expected to rebound in September, after the Olympic controls are lifted," said Li. "There may be a short-term rebound for airline stocks then."

China tightened visa regulations and beefed up security checks ahead of the Beijing Olympics in a bid to ensure a trouble-free Games, which ends on Sunday.

The three carriers have all plunged over 66 percent this year in Hong Kong trading. China Southern fell 0.8 percent to HK$2.58 (33 US cents) yesterday before the announcement.