Air China’s operating profit rose 1.5% to CNY6.7 billion ($935 million) in the first half of 2019 as significant losses in the cargo segment dampened stonger healthy passenger demand.

Group revenue was up 1.67% to CNY65.3 billion, on the back of a 5.2% increase in passenger revenues. On the other hand, cargo revenues declined by 44% although the segment accounts for less than 10% of its group revenue.

Meanwhile, operating expenses gained 1.6% to CNY60.5 billion, largely due to increased operations. Apart from higher jet fuel costs, the carrier incurred greater take-off, landing and depot charges, as well as higher depreciation, amortisation and aircraft and engine lease expenses.

Net profit was 9.6% higher at CNY3.14 billion.

As a group, Air China’s RPKs gained 6.6% against a 5.9% increase in ASKs. This kept load the load factor steady at 81%, though yield declined by 1.29%.

Subsidiary Shenzhen Airlines increased RPKs by 8.3% while ASKs gained 9.5%. Likewise, the load factor was broadly steady at 81.1% but yield declined by 4.88%. Despite that, its revenue increased by 3.7% to CNY15.6 billion.

After adding 19 and removing 12 jets, the group ended the period with 676 aircraft in its fleet, including 223 Airbus A320/321s and 277 Boeing 737s. It plans to remove three aircraft throughout 2020 while adding another 93, of which there are 35 A320/321, 50 737s, and 3 ARJ21s.

The mainline carrier alone has 415 aircraft in its fleet, including 123 A320/321s and 138 737s, and plans to add 55 aircraft in 2020, most of which will be narrowbody jets.

At 30 June the carrier had CNY7.62 billion in cash and cash equivalents, up from CNY6.76 billion one year ago.

Air China was fairly optimistic in its outlook, citing a “promising external business environment” with China’s economic growth “in a reasonable range.”

It remains committed to developing Beijing Capital international airport into a competitive aviation hub, while upgrading its business model and strengthening cost controls to offer better products and services.

Source: Cirium Dashboard