BUSINESS Air China profit lifted by stronger yuan, despite lower yields


Air China profit lifted by stronger yuan, despite lower yields

Reuters Staff | Reuters

07:49, October 28, 2017

Air China posted a 31 percent rise in third-quarter net profit on Friday as a strengthening yuan offset lower passenger yields on international routes.

The state-owned Chinese airline said net profit rose to 5 billion yuan for July-September from 3.8 billion yuan a year earlier. Net profit over the nine months to September rose 14.6 percent to 8.3 billion yuan.

Analysts from UOB Kay Hian and Crucial Perspective had forecast that Air China would report lower net profits of about 3 billion yuan for the quarter.

The strengthening of the yuan against the dollar helped its finance expenses for the quarter fall by 247.2 million yuan, compared to a gain of 1.3 billion yuan over the same period last year, Air China said.

The results echoed China Eastern Airlines , which on Thursday said that similar factors led to a 3.1 percent rise in third-quarter net profit. Air China and its rivals have in recent years relied on U.S. dollar loans to fund their aggressive fleet expansion plans.

But Chinese airlines are seeing profit dented by falling returns as the growth of fleets has outpaced passenger growth.

Air China said earlier this month its passenger load factor, a measure of an airline’s occupied seats, fell 1.2 percent year-on-year to 79.9 percent in September against a 3.8 percent rise in the number of passengers it carried over the same period. (Reporting by Brenda Goh; editing by Alexander Smith)

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