State-owned airlines endure turbulent year

Chinese state-owned airlines have had a turbulent year and are bracing for unimpressive first-half earnings, Financial Times reported, citing an aviation analyst from Barclays.  With the bulk of their earnings in renminbi and costs denominated in US dollars,  the big three airlines Air China (AIRC.LON, 0753.HKG, 601111.SHA), China Eastern (CEA.NYSE, 670.HKG, 600115.SHA) and China Southern (ZNH.NYSE, 1055.HKG, 600029.SHA) have all issued profit warnings, citing foreign exchange losses from the renminbi’s unexpected weakening earlier this year. Furthermore, Chinese military exercises have caused widespread disruptions to flight services across eastern and central China. Last month China Eastern claimed it would book a first-half profit of less than RMB50 million (US$8 million) compared to RMB582 million last year.