A strong domestic market meant two of China's "big three" carriers, China Eastern Airlines and China Southern Airlines stayed in the black last year, despite tough global operating conditions.
Shanghai-based China Eastern saw revenue increase 8.3% over 2000 to 12.2 billion yuan ($1.5 billion). Operating profit went up 12.4% to 875 million yuan, while after-tax profit jumped 181% to 575 million yuan. The big net gains were largely due to income tax cuts.
The airline says a strong Chinese economy reduced the impact of the global slowdown. Officially, the economy grew by 7.4% in 2001, and Shanghai has reported double-digit annual growth for the last decade. China Eastern is hopeful that efforts to improve western China's economy - still lagging far behind the prosperous coastal areas - will lead to increasing traffic for its western Chinese operations.
The government's consolidation plan should make competition more "regulated and orderly", the airline told Hong Kong investors (Flight International, 12-18 February).
Guangzhou-based China Southern saw net profit fall 32% for the year ended 31 December, 2001 despite strong revenue gains, partly due to higher operating expenses. Aircraft leasing charges were partly to blame, rising 18% due to sale and lease-back deals and the wet lease of five Boeing 737-700s.
China Southern, China's largest carrier, saw its after-tax profit fall to 340.2 million yuan from 501.8 million yuan and operating profit dip to 1.67 billion yuan from 1.95 billion yuan. Turnover increased to 16.9 billion yuan from 15.2 billion yuan, but operating expenses rose 10.6% to 15.5 billion yuan.
China Southern says passenger revenue rose 13.6% during the year while passenger numbers jumped 13.5%, to 19.1 million, mainly due to strong domestic growth.
Source: Flight International
