Andrzej Jeziorski/SINGAPORE

China's airlines have nearly halved their losses for the first half of this year compared with the same period in 1998, according to official reports. The state-controlled China Daily newspaper quotes Civil Aviation Administration of China (CAAC) figures showing that its member airlines suffered losses of 820 million yuan ($100 million) for the six months, compared with a 1.42 billion yuan loss.

Such official figures are often unreliable, however. Reports from other Chinese sources quote different losses for the two periods - although confirming the general trend of a cut in losses of 50%.

The China Daily says revenues at carriers operating under the CAAC umbrella have risen mainly because of a government ban on discount ticketing imposed in January. The report says passenger numbers rose by 2.6% over the first half, year on year, with cargo tonnage up by 20.2%.

Figures for June, quoted by the official Xinhua news agency, confirm the trend, but give higher growth figures of a 7.3% rise in passenger volume and 27.1% increase in freight tonnage. International services and flights to Hong Kong and Macau are said to have shown the biggest increases, with passenger traffic up by 20%. Domestic traffic increased by a more modest 5.3%.

Despite the improvements, of China's big three carriers, only Shanghai-based China Eastern has returned to profitability, according to separate reports from Xinhua and the China Securities daily. China Southern Airlines and Air China merely reduced their losses.

Among the country's second-tier operators, CNAC-Zhejiang Airlines also returned to profitability, while China Northwest reportedly cut its losses. Other airlines which turned a profit in the first half last year are said to have remained profitable.

China Southern - which is contemplating a possible merger with Air China - and China Eastern are both listed and should publish accounts for the six months soon.

• The general improvement in Chinese airline performance has been replicated in neighbouring South Korea, where Korean Air has reported a net profit of 100 billion won ($83 million) for the first half of the year. Increasing passenger and cargo loads triggered the improvement.

Source: Flight International