Air China Q3 Net Up Sixfold
Air China posted a near six-fold rise in third-quarter earnings on Thursday thanks to robust air travel demand in the world's second largest economy as well as a big jump in investment returns.
Leisure and business travel is expected to stay strong in the fourth quarter, while a collective increase in airlines' fuel surcharges would help offset a rise in fuel prices this week, industry observers say.
"The fuel price hike is... not good news for airlines, but they have all raised their fuel surcharge accordingly," said Yu Jianjun, an analyst with Huatai Securities, speaking before the release of Air China's quarterly earnings.
"I expect Air China to maintain healthy earnings gains as long as there is no further upward swing in oil prices."
The country's flag carrier made CNY5.17 billion yuan (USD$773 million) in net profit in the third quarter compared with CNY885.3 million a year earlier.
Turnover rose 77 percent to CNY24.8 billion, while unspecified investment returns surged to CNY518.5 million from CNY149.1 million.
Earlier in the year, Air China more than doubled its stake in Shenzhen Airlines to 51 percent, a move which also helped dress up its July-September results.
Industry observers shrugged off concerns that the end of the Shanghai World Expo on October 31 might hurt Air China's passenger volumes. The Beijing-based carrier did not benefit as much from the event as its Shanghai-based peer China Eastern Airlines, they said.
Air China signed a deal recently to buy four Boeing 777 aircraft, which could help further expand its long-haul routes.