Photo: Bidgee / Wikimedia Commons
China’s three biggest state-owned airlines reported third-quarter results showing profits nearly wiped out, with one carrier swinging to a loss, as surging jet fuel prices drove up operating costs.
Air China’s quarterly filing shows net profit attributable to shareholders of 270.6 million yuan (about $38 million) for the three months ended September 30, down 92.6% from a year earlier.
Profits nearly erased
China Eastern’s filing shows net profit of 64 million yuan for the quarter, down 98.2% from a year earlier.
China Southern fared worst of the three, swinging to a 609 million yuan net loss for the quarter from a 3.84 billion yuan profit in the same period last year.
For the first nine months of the year, the three carriers posted combined net losses attributable to shareholders of about 8.4 billion yuan (about $1.2 billion): 4.31 billion yuan at China Southern, 2.12 billion yuan at China Eastern and 2.02 billion yuan at Air China.
Fuel costs squeeze margins
The profit collapse came even as revenue grew at all three carriers. Air China’s third-quarter revenue rose 5.4% to 51.7 billion yuan, China Eastern’s climbed 8.2% to 42.8 billion yuan and China Southern’s added 2.3% to 52.5 billion yuan.
China Eastern said in its filing that crude oil prices fluctuating at high levels in the Middle East caused a significant surge in jet fuel prices, directly driving up operating costs and weighing on results. China Southern likewise blamed the adverse impact of volatile fuel prices for its operating loss.
Full-year outlook
The nine-month losses put all three carriers on course for annual deficits. Any full-year figures remain forecasts, not final results, until the companies publish audited annual reports early next year.
JBizNews Desk | Beijing
© JBizNews.com. All rights reserved. Unauthorized reproduction or redistribution is strictly prohibited.
_Airbus_A330-343_at_Sydney_Airport.jpg){kind=link}