China Eastern reports huge loss in fuel hedging

(Xinhua)
Updated: 2009-01-12 14:14

BEIJING -- China Eastern Airlines Co. said Monday that its unaudited loss in the fair value of fuel hedging contracts was estimated at 6.2 billion yuan (US$906 million) by the end of 2008.

The huge loss came as the global crude oil prices plunged 70 percent by the end of December from its record high of US$147.27 in July.

In a statement to the Shanghai Stock Exchange, the country's third largest carrier forecasted it posted a "large" loss last year as the global economic recession cut air travel demand.

In the first three quarters of last year, the state-owned carrier posted a loss of 2.29 billion yuan and its debt-to-asset ratio was 98.49 percent.

The airline announced December 29 that it will receive a capital injection of 7 billion yuan through issuing additional shares to its parent company to ease capital stress.

Shares of China Eastern dropped as much as 4.2 percent in the morning trade before trimming loss to 0.89 percent by noon break in Shanghai.