Shandong Airlines operating profit up 21% in 2011

Shandong Airlines revenue up 33% – financial highlights for 12 months ended 31-Dec-2011 (according to China Enterprise Accounting Standards):

• Total operating revenue: CNY9667 million (USD1498 million), +32.6% year-on-year;
• Total operating costs: CNY8674 million (USD1344 million), +34.2%;
• Operating profit: CNY994 million (USD154.0 million), +20.7%;
• Net profit: CNY771.2 million (USD119.9 million), +21.6%;
• Total assets: CNY9773 million (USD1514 million), +9.5%;
• Total liabilities: CNY7724 million (USD1196 million), +2.9%.

*Based on the average conversion rate at USD1 = CNY6.4554 for the period

Shandong Airlines stated it received CNY21.7 million (USD3.4 million) in government grants in 2011, an increase of 35.5% year-on-year. The grants consisted of CNY7.7 million (USD1.2 million) in subsidies for branch route aviation, which was 19.1% less than the previous year.

You may also be interested in the following articles...

• Turkish Airlines 1Q revenues grow 28% as losses narrow, but unit costs will be key to FY result
  22-May-2013

  Turkish Airlines cut its 1Q2013 operating loss from TRY173 million to TRY23 million (EUR9.7 million), almost breakeven in the traditionally weakest quarter. Revenues grew 28% on capacity up 21%, with particularly strong growth to Africa, Middle East and Europe. The improved result was driven by unit revenue growth (RASK) as unit costs (CASK) were held flat in spite of higher fuel prices. Earlier this year, the carrier said it did not expect a unit revenue increase for FY2013, so this represents a good start to the year, and ex fuel unit costs will need to remain under control over the rest of the year.

  Much of Turkish Airlines’ success has been built on an efficient workforce and the geographic location of the Istanbul hub, which facilitates a global connecting strategy. Both of these elements were visible in 1Q2013, with labour cost growth slower than capacity and transfer passenger growth outpacing the total. Nevertheless, a strike called on 15-May-2013 (albeit with limited impact) and the relentless competitive presence of the Gulf carriers are reminders that this success cannot be taken for granted.

• Ryanair: Europe's lowest cost producer wins again, reporting record profit of EUR569 million
  21-May-2013

  Ryanair reported a record net profit of EUR569 million for FY2013, 13% up on last year, and its operating margin of 14.7% is comfortably the highest among European airlines. Even after returning EUR1.5 billion in cash to shareholders over the past five years, the LCC had EUR3.6 billion in cash at the end of Mar-2013, equivalent to almost nine months of sales.

  Results like these, achieved in the teeth of the weakest economic backdrop in Europe for decades, underline the strength of Ryanair’s low-cost model. Already Europe’s lowest cost producer, and with relatively little scope to cut unit costs, earnings growth in recent years has been driven by the pricing power resulting from tighter capacity expansion than in the past, aided by restructuring and capacity cuts by many competitors.

  These conditions should help Ryanair make progress towards its target of a 20% market share over the next five years, after which a possible order for the Boeing 737MAX may be the key to longer term earnings growth.