Hainan Airlines to require CNY35bn for 2013 expansion

This story is sourced from Pro
See more Pro news »

Hainan Airlines has set a target of carrying 25.9 million passengers in 2013, up by 14.9% from a year ago.

The carrier also aims to increase its cargo capacity as measured in available freight tonne kilometres (AFTK) by 15.9% to 4.85 billion tonne kilometres.

To achieve these targets, the Shanghai-listed carrier estimates that it will require yuan (CNY) 35 billion ($5.6 billion) this year. The funds will be raised through bank credit, short-term financing and other financing channels, says the carrier.

The funds will mostly go towards increasing capacity so as to achieve these growth targets.

This year, the carrier is also scheduled to induct 29 new aircraft into its fleet. These include 22 Boeing 737s, five 787s and two Airbus A330s.

Last year, Hainan reported a 27% dip in its full-year net profit to CNY1.9 billion. While its total revenue rose by 9.9% to CNY28.9 billion, its operating costs also went up by 11% to CNY21.6 billion.

Its performance was impacted by a weak cargo market, as well as intensified competition among domestic carriers as they lowered prices to compete with the country's high speed rail network.

Hainan has also said that it plans to join an alliance within the next five years to increase its global presence and build its network.