Listed Chinese airlines have begun reporting eye-watering rise in half-year profits, largely due to cheaper fuel.
In a filing to the Shanghai Stock Exchange Friday, Shandong Airlines said it revenue rose 2.69 percent year on year in the January-June period, but its net profit were up by 364 percent.
In mid the month, China Eastern Airlines reported annual revenue growth of 3.9 percent, but its net profit soared to 3.56 billion yuan (557 million U.S. dollars) from 14 million yuan a year ago. Hainan Airlines recorded a 0.77 percent increase of revenue, while net profit grew 231.92 percent. ' Listed airlines that have yet to file mid-year reports have said in earnings forecast that their profits are expected to soar.
China Southern Airlines was expected to make a U-turn: it lost a billion yuan for the first half of 2014 but will up to 3.6 billion yuan this half.
Air China, the national flag carrier, expects its profit to increase by over 700 percent.
Cheap fuel was cited by the airlines as a major reason for the improvement. "Fuel prices fell 37.6 percent on average. Fuel consumption rose 13.2 percent, but costs dropped 29.4 percent," said China Eastern Airlines.
Stronger air travel demand also played a role. Passenger and cargo transport rose 12.5 percent and 6.6 percent year-on-year, respectively.
