[photopress:China_airlines_taking_off.jpg,full,alignright]n the past year or so Chinese airlines have not been making money. Indeed, in some cases heavily the reverse. Now a light is shining at the end of the tunnel. In the first quarter of this year Chinese airlines narrowed their losses. Three reasons: a stronger currency, higher fuel surcharges and a booming travel demand.
That still does not mean they are on easy street.
The General Administration of Civil Aviation of China said on its Website that China’s airlines posted a combined loss of RMB820 million ($110 million) in the first three months of this year .
The cheering news is that this figure is RMB1.28 billion less than a year ago.
The carriers, including China Southern Airlines and Air China Ltd, increased revenue 20% to RMB40.5 billion. While the revenue was galloping the costs were moving at a more sedate pace – 17%.
Ji Lijun, an analyst with Shanghai Securities, said, ‘The large drop in losses was created by a booming economy that fueled air travel demand.’
Chinese airlines flew 40.9 million passengers in the first quarter, up 16% from last year and the carriers filled 72.7% of available seats in the quarter which is an excellently high figure. The airlines also carried 858,000 tons of cargo in the period, a year-on-year rise of 13.3%.
The forecast is that air travel will rise 7.2% annually until 2025 although there will be a smart upward blip for the Olympics and another for Shanghai’s Expo 2010. So the prospects are pleasing even though the immediate past history is less so.
Now China’s airlines are operating a total 1,028 planes which is 66 more than at the end of 2006. That figure will steadily increase.
Source: Shanghai Daily