4 APRIL 2016
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Volatility in the China aviation market was underlined this week after the country’s major carriers reported big 2015 profits but were cut back by losses in foreign exchange following the devaluation of the yuan.–
The big three state-owned airlines combined are reported to have lost US$2.5bn on the money market, meaning they could not benefit as much as expected from falling oil prices.
China Southern Airlines, Asia’s biggest carrier in passenger numbers, said its net income more than doubled to 3.7bn yuan (US$571.2m), while China Eastern Airlines’ profit rose 33% 4.5bn yuan. Air China’s net income was up by a better-than-forecast 83% to 7.06bn yuan.
The foreign-exchange problem arose after the yuan fell by 4.5% last year after the devaluation by China’s central bank. It was the currency’s biggest annual loss since 1994, and created turmoil in the markets and uncertainty for airlines, whose aircraft purchases are in dollars.
Observers say the results underline the difficult times ahead for Chinese carriers, which are facing growing demand for air travel at home and regional competition. The yuan also is still considered rocky as the world’s second-largest economy slows, with further devaluation in prospect. www.csair.com uk.ceair.com www.china-airlines.com
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