Air China saw operating profits plunge by more than 80% in the first quarter to 189 RMB million (US$30 million), on the back of weaker international and cargo business, high fuel prices, and exchange rate and investment-related declines.
Revenues were up 7.7% at 22,895 million RMB. Net profits were down 86% at 239 million RMB.
"The Chinese economy has been growing steadily during the first quarter of 2012 and the domestic airline industry has sustained its growth momentum. However, the slow US economic recovery and the European sovereign debt crisis retarding growth in that region have led to continued slowdown of demand in the international air traffic market. Meanwhile there has been no sign of recovery within the cargo business," the carrier said in a statement.
During the Period, passenger capacity, measured by Available Seat Kilometer rose by 7.1% year-over-year to 38.92 billion. Passenger traffic measured by Revenue Passenger Kilometers
was 30.84 billion, up 7.0% from the same period in 2011.
During the Period, cargo capacity as measured by Available Freight Tonne Kilometers decreased by 2.7% year-on-year to 1.93 billion. Cargo traffic as measured by Revenue Freight Tonne
Kilometers declined by 8.8% to 1.04 billion.
Wang Changshun, Chairman of Air China said, “The steady growth of the Chinese economy has continued to boost domestic consumption power. Because of this, together with the increased synergies between the Company, Cathay Pacific, Shenzhen Airlines and other associate airlines, we expect the Company to achieve further growth this year. However, taking into consideration the slowdown of global economic growth, continued high oil prices and limited aviation resources for flight slots and routes, we remain prudent yet optimistic about our overall prospects in the market this year.”