Hainan Airlines (HU) reported a net profit of CNY175.6 million ($27.8 million) in the first quarter, down 35.7% compared to CNY272.3 million reported in the year-ago quarter (ATW Daily News, April 25, 2011).
Industry analysts cited the slowdown of domestic market, high fuel prices and the slowing of yuan appreciation for the results.
HU’s operating revenue climbed 22.7% to CNY7.06 billion against a 27.8% increase in operating expenses to CNY5.51 billion, due to rising fuel costs.
The carrier did not release traffic figures.
China’s big three carriers all reported first-quarter profit decreases (ATW Daily News, April 30) (ATW Daily News, April 27).
Haitong Securities aviation analyst Niu Yuming said the slowdown of domestic market demand is the main reason for the profit reduction. But Chinese airlines are expected to improve their performance in the second quarter as UBS predicts domestic market demand will pick up and fuel prices will decrease.
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