[photopress:hangzhou_01_580.jpg,full,alignright]The General Civil Aviation Administration announced in its industry-wide mid-year report that fueled by surging demand, the Chinese aviation industry went from losses into profits in the first half of this year.
The report indicated a double-digit increase in demand for every segment of the industry.
Airlines had RMB2.39 billion ($316 million) in losses in the same period last year. This year they made RMB1.54 billion and revenues rose by 19% to RMB86 billion.
Luo Zhuping, board secretary of China Eastern, said, ‘Consumer spending has risen considerably as a result of the fast-paced economic growth. So people are willing to spend more money on air travel, and this is spurring the industry on.’
The report said first-half passenger volume grew 16.7% to 86.7 million people. The load factor increased to 73.9%. Cargo volume rose 15.3% to 1.83 million tons.
International flights grew ‘conspicuously’ faster than domestic ones, the report said, with passenger volume rising 21.8% to 7.9 million. Domestic passenger volume increased by 16.2%.
Ma Ying, an analyst at Haitong Securities said, ‘Chinese airlines increased investments in international flights and routes this year. Furthermore, the rising yuan has encouraged more Chinese to go on trips overseas.’
Zhang Lei, a spokesman with China’s first budget carrier, Spring Airlines, said his firm’s profits had more than doubled in the first six months of 2007. He said, ‘What we are seeing is an airline industry that is becoming more mature. Airlines are learning to adapt well to the rules of the free market.’
The administration’s report said there were no safety-related incidents during the period and that complaints of missing luggage and poor service had gone down. For which relief, much thanks.
Source: Shanghai Daily