Air China parent China National Aviation Holding Company (CNAH) forecasts the group’s fleet will increase to 700 aircraft, annual passenger numbers to increase to 107 million, cargo volume to increase to 2.2 million tonnes, total assets to reach CNY280 billion (USD43.8 billion), operating revenue to reach CNY150 billion (USD23.4 billion) and profit to reach CNY16 billion (USD2.5 billion) p/a by 2015, a reported by Carnoc.com. The group celebrated its 10th anniversary this year. Over the past decade, the group’s annual passenger numbers and cargo volume have increased three-fold while operating revenue has increased from CNY26,200 million (USD4094 million) to CNY96,900 million (USD15,141 million) and profit has increased from CNY285 million (USD44.5 million) to more than CNY10,000 million (USD1563 million) p/a. At the end of 2011, the group’s fleet reached 432 aircraft and reported assets of approximately CNY183,300 million (USD28,641 million) for an asset to liability ratio of 69.5%, down from 84.1%. Looking ahead, CNAH president Wang Changshun stated the group will aim for steady growth while taking advantage of market opportunities in the second half of this year. Mr Wang estimates Air China’s brand value has surpassed USD9.8 billion.
Air China forecasts USD2.5bn profit, 107m pax p/a by 2015
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CAPA global airline financial outlook
Operating margin to reach new high in 2016, but this may signal a subsequent downturn. CAPA’s global airline operating margin model indicates that the industry was more profitable in 2015 than it has been for almost five decades. Moreover, the model predicts that world airline operating margins will rise further above previous historic peak levels in 2016. These new levels of profitability are mainly thanks to the low oil price environment, coupled with strong demand growth in spite of global economic growth rates that are far from exceptional.
Much of the industry is also benefiting from a period of relative capacity discipline. New revenue sources may also be helping, although their role in airline profitability is still emerging.
The macroeconomic and geopolitical backdrops provide the main risks to this forecast. Beyond that, the biggest challenge for the industry will then be to try to sustain margin levels, rather than to allow a peak to be followed by a rapid downturn, as has always happened in the past. But downturns can play a positive role in industry development, possibly even stimulating consolidation.
Global airline financial outlook
Operating margin to reach new high in 2016, but this may signal a subsequent downturn