Business / Companies

Air China's net profit declines

By Wang Wen (China Daily) Updated: 2014-03-27 08:33

In contrast to State-owned airlines, Hainan Airlines Co Ltd, the fourth-largest carrier in China, saw a 9.2 percent profit rise in 2013, despite the industry being gloomy.

"The passenger structure of Hainan Airlines is different from others in that it operates many routes to tourist destinations," Li said.

Networks covering smaller cities, rather than big cities, also provided faster growth for the airline, he added.

However, China's civil aviation industry is preparing for a tougher year.

"The aviation industry still needs to face some challenges, including intensifying competition, dwindling resources and rising operating costs," said Cai Jianjiang, chairman of Air China.

The price of jet fuel will be a main risk for carriers, because the global economy is still recovering and it will not drop.

The International Air Transport Association also revised downward its industry profit outlook for 2014 from its previous forecast of $19.7 billion to $18.7 billion because of the higher oil prices.

Chinese carriers' exchange income might also be negative, because the renminbi depreciated in the first quarter of 2014, Li said. In 2013, the renminbi appreciation contributed greatly to Chinese carriers' income.

Chinese airlines lost 700 million yuan through exchange rates in February, while they earned 100 million yuan exchange income in the same month a year earlier.