ChinaTravelNews - Despite some turbulence in 2015, China Southern Airlines finished the year with flying colors, reporting net income estimated to exceed RMB 3.7 billion, according to the carrier’s positive profit alert issued on January 26.
The carrier’s performance in 2015, outlined in its 2016 New Year Conference, was boosted by new growth in international air routes and more efficient cost control, in addition to drastic reduction of fuel cost. The preliminary estimate of net income attributable to shareholders in 2015 shows y-o-y increase of between 110%-130%.
This means China Southern’s net income for 2015 could reach RMB 3.723 billion to RMB 4.078 billion, based on the net income of RMB 1.773 billion in 2014.
The carrier attributes its growth to five factors:
1. The carrier optimized its resources allocation and enlarged its transportation capacity to capitalize on strong domestic demand for air travel, contributing to stronger performance on annual revenue.
2. The effect of its strategic transformation started to show: its hub in Guangzhou is better developed, and the robust growth of outbound travel helped make the carrier's international air routes the new growth area.
3. Comprehensive budget management has led to better cost control, as a result, costs were lowered .
4. The cost of aviation fuel reduced sharply thanks to the continuous decline of international crude oil prices.
5. China Southern took preemptive measures against the drastic depreciation of RMB by substantially reducing its USD debt ratio, thus cut down the exchange rate loss from the depreciation. (Translation by Jerry)
