China Eastern’s profitability soars; ANA's bottom line won't feel 787 delay
China Eastern Airlines reported a 63% jump in first half net profitability to USD248 million (with operating profit increasing 25% to USD372 million) on a 94% revenue increase to USD4.8 billion, as Shanghai's World Expo boosted travel demand, the carrier's acquisition of Shanghai Airlines increased passenger numbers and a stronger yuan reduced the repatriated value of debts.
- China Eastern Airlines reported a 63% increase in net profitability for the first half of the year, driven by the Shanghai World Expo, increased passenger numbers, and a stronger yuan.
- Passenger numbers for China Eastern Airlines rose by 45% in the first half of the year, reaching 30.1 million.
- The recovering economy and increased travel demand contributed to a 17.6% increase in passenger yields for China Eastern Airlines.
- China Southern Airlines also reported a first-half operating profit, while Air China's net income increased by 60%.
- Hainan Airlines experienced a 42% increase in revenues and returned to profitability in the first half of the year.
- All Nippon Airways stated that the delay in B787 deliveries would not impact its earnings for the current business year.
China Eastern's first-half passenger numbers jumped 45% to 30.1 million, with the carrier making a CNY155.6 million (USD23 million) currency gain after the stronger yuan pared the value of dollar-denominated debts associated with the acquisition of Boeing and Airbus aircraft. The carrier's passenger and freight volumes also benefited from a recovering economy, which also helped boost passenger yields by 17.6% to USD 8.78 cents.
Commenting on the result, China Eastern stated: "The company considers that the global economy is gradually recovering and the foundation for performance of the PRC economy is further strengthening and contributing to the stable development of the economy. With the recovery in the demand for air transportation, the civil aviation market of the PRC is expected to grow at an accelerated pace. In the second half of 2010, the Company will grasp the favorable opportunity brought by the high season of the market as well as the Shanghai World Expo. We will optimize our market allocation, strengthen cost control and enhance our operating capability to strive for better profitability."
Comparatively, China Southern reported a first-half operating profit compared with a year-earlier loss as travel recovered from last year's global recession, while Air China's net income increased 60% on travel demand and fuel-hedging gains.
Shares in China Eastern fell 4.6% to HKD3.94 at the close of trading in Hong Kong on 27-Aug-2010. Shares in the company have climbed 42% this year, compared with a 49% gain for China Southern Airlines and an increase of 37% for Air China Ltd.
Hainan Airlines revenues up strongly; profitable in 1H2010
Hainan Airlines reported a 42% jump in revenues in the six months ended Jun-2010 to USD1.4 billion, with the carrier returning to profitability at the operating level in the period, with an operating profit of USD72 million, compared to a loss of USD221,515 in 1H2009. Net profits increased 218% to USD81.5 million. The carrier also reported a 13% increase in passenger levels to 9.2 million in the period, with an average load factor of 81.1% (+4.1 ppts).
ANA states B787 delay will not effect 2010/11 earnings
Also in the North Asian region, All Nippon Airways stated the delays to the B787 deliveries would have no impact on its earnings for the current business year and commented: "Given the success of the flight test programme so far, it is regrettable to hear of the delay. However, we trust that the time will be used to deliver the best possible aircraft in the shortest possible time frame." ANA spokeswoman Megumi Tezuka stated the carrier was requesting delivery dates from Boeing as soon as possible beyond the first aircraft, which is now scheduled for delivery in Feb-2011.
Asia Pacific selected airlines daily share price movements (% change): 27-Aug-2010
Source: Centre for Asia Pacific Aviation, Reuters & Financial Times