China Eastern Airlines reported a 38 percent drop in third-quarter net profit last Friday, dragged down by a weakening yuan and rising fuel and debt costs. Net profit attributable to shareholders dropped to 2.2 billion yuan ($317 million) in the July-to-September period, from 3.6 billion yuan a year earlier, although revenue rose 13.5 percent to 33.5 billion yuan.
In July, China Eastern announced that it would raise up to $2.23 billion in a share sale to expand its fleet and to replenish working capital. Shanghai-based Juneyao Airlines Co Ltd invested in the state carrier as part of the deal. ($1 = 6.9446 Chinese yuan renminbi)
China Southern Airlines and Air China on Tuesday both reported a fall in quarterly net profit, as weakness in the yuan and higher fuel and debt costs weighed on their performance.
China Southern Airlines, the country’s largest carrier by passenger numbers, reported profit attributable to shareholders of 2.0 billion yuan ($287 million) for the third quarter, down from 4.3 billion yuan in the same period last year.
Net profit was down 41 percent for the first nine months of the year at 4.2 billion yuan, although revenue rose 13 percent to 108.9 billion yuan in the period.
Air China, the country’s flag carrier, said profit attributable to shareholders for the third quarter fell to 3.5 billion yuan from 5 billion yuan over the same period last year. Net profit was down 16.2 percent for the first nine months.
China Southern incurred foreign exchange losses of 2.0 billion yuan due to a drop in yuan against the U.S. dollar in the nine-month period, compared with a gain of 1.2 billion yuan a year earlier. The yuan has fallen by about 6 percent against the dollar since the start of the year.
Another major Chinese airline Hainan Airlines saw a 90% year-on-year tumble in its third quarter operating profit to CNY234 million ($33.5 million). Operating revenue during the three months to 30 September rose 16% to CNY19.4 billion, but this was outpaced by a 34% jump in costs to CNY19.7 billion.
This brought attributable net profit to CNY180 million, down 89% from a year ago.
Operating revenue rose 16.6% to CNY52.3 billion, but this was similarly outpaced by the 25.5% jump in costs to CNY53.5 billion.
