China Eastern Airlines’ first-half operating profit rose 25% to CNY7.16 billion ($1.07 billion), however its net profit fell 12% due to the weakening of the Chinese yuan against the US dollar.
Total revenue for the six months ended 30 June rose 4.4% to CNY46.3 billion, with passenger revenue increasing 5.8% to CNY39.3 billion, it said in a stock exchange statement.
Operating expenses rose 2.56% to CNY42 billion, as rises in airport charges, wages and maintenance costs outweighed a 21% decrease in fuel expenses.
China Eastern’s net result was dragged down by a more-than doubling of finance costs to CNY2.72 billion, which was “primarily due to an increase in net exchange losses recognised during the reporting period brought by an appreciation of USD against RMB.”
Passenger capacity across the group increased 15%, while RPKs increased by 15.5%, resulting in passenger load factor strengthening marginally to 80.8%. Passenger yield fell 8.24% to CNY0.51, primarily driven by a 15.8% fall in international yield.
Freight load factor decreased 6.9 percentage points to 49.4%, as steady domestic and regional loads were offset by a 10.2 point fall in international freight load factor to 52.8%.
The SkyTeam carrier’s cash and cash equivalents at 30 June amounted to CNY13.2 billion, up from CNY9 billion at the start of the year. Net cash from operations amounted to CNY10.5 billion and CNY9.88 billion from financing, while it expended CNY16.4 billion on investment activities – primarily payments on future aircraft orders.
Over the six months, the carrier took delivery of 42 aircraft, while 12 were retired leaving it with a total fleet of 581 aircraft at the end of the period.
In its outlook, the airline noted that the global economic recovery is expected to be weak due to the impact of Brexit and “escalated disputes in the geopolitics worldwide.”
Nonetheless, it says that “demand for air passenger transportation is expected to maintain robust growth, whilst the demand for air freight transportation is expected to be relatively sluggish.”
During the second half of 2016, China Eastern plans to take delivery of two Boeing 777-300ERs, 4 Airbus A320s and 14 737s, while it will also dispose of four A320s, six 737s and four Embraer ERJ-145s.
Source: Cirium Dashboard