China Southern Airlines Co., the country's biggest carrier, said its first-quarter loss narrowed 69 percent because of lower fuel costs and higher surcharges.
The carrier posted a loss of 188 million yuan ($24 million), or 0.04 yuan a share, in the three months to March 31, compared with 603 million yuan, or 0.14 yuan, a year earlier, the Guangzhou-based company said in a statement today, using domestic accounting standards. Sales rose 26 percent to 11.9 billion yuan.
China Southern flew about a third of all Chinese airline passengers in the first quarter, as it boosted traveler numbers 17 percent and began receiving 68 new planes this year. The government has also cut jet fuel prices three times in 2007, while keeping ticket surcharges at a level twice as high as a year earlier.
"We forecast robust demand, especially given the rising incomes in China," said Jack Xu, an analyst at Sinopac Securities Asia Ltd. "Going forward, China Southern will see even lower jet fuel expenses. We expect them to return to profit in the second quarter," he added.
China Southern is expanding its fleet about a fifth this year to grab market share, particularly in its home base of Guangdong, China's manufacturing hub and richest province. It is also set to start at least 10 new overseas routes before the 2008 Beijing Olympics Games, challenging Air China Ltd., the nation's largest international carrier.
The airline will begin flying between Shanghai and Cebu in the Philippines in June, the Manila-based Star newspaper said today, citing the Philippine consul-general in China.
(China Daily via Bloomberg April 25, 2007)