China Eastern posts massive 2008 loss

China Eastern Airlines, the weakest of China’s big three airlines, posted net loss of US$2.2 billion last year due to weakened demand, rising fuel costs and losses arising from fuel hedging contracts, AFP reported. The carrier posted a net profit of US$55.4 million in 2007. The firm’s revenues in 2008 declined by 3.4% year-on-year to US$6 billion, operating costs increased by 32.5% year-on-year to US$8.3 billion due in large part to skyrocketing costs for aviation fuel. Fuel costs accounted for around one third of the carrier’s operating costs, rising 22.3% year-on-year to US$2.7 billion. Fluctuations in international oil prices also led to a loss of US$907.1 million from fuel hedging contracts.