Air China's third quarter net profit dropped by 7.3% to yuan (CNY) 2.94 billion ($482 million), as increased competition during the period affected profitability.
The flag carrier's operating revenue for the period ended 30 September fell by 2.9% to CNY 27.9 billion, while operating profit also declined by 10% to CNY 4 billion.
Passenger capacity as measured in ASKs rose 10% year on year, while its RPKs increased by 11%.
During the period, the Star Alliance carrier achieved a passenger load factor of 82.7%, an increase of 0.12 passenger points compared with the same period in 2012. While load factors on its international and regional routes increased by 0.73 and 1.45 percentage points respectively, that of its domestic routes dropped by 0.27 percentage points.
Though the industry enjoyed steady growth in demand during the period, market competition and increased investment in capacity reduced overall profitability, says Air China.
"The aviation industry faces many challenges in the months ahead," says its chairman Wang Changshun. He adds that the carrier will continue to work towards improving customer experience, addressing market trends and strengthening collaboration with strategic partners as part of its business strategy.