Hainan Airlines reports $25.6 million first-half profit

Hainan Airlines posted net income of CNY175 million ($25.6 million) in the first half based on domestic accounting standards, down 43.7% from the CNY311 million reported in the year-ago period, on a 3.5% decrease in operating revenue to CNY6.12 billion.

Half-year operating expenses fell 5.5% to CNY5.15 billion. It is noteworthy that the carrier reported only a CNY9.2 million profit excluding government subsidies, down 96.8% from the comparable figure last year. It attributed the fall to the global financial crisis, H1N1 flu and lower airfares caused by "fierce" domestic competition. It said most airlines redeployed international capacity to the domestic market as demand for long-haul travel slid.

HNA introduced 15 737-800s, one A330 and two A340s during the semester and phased out one 737-300, one 737-400 and two A319s. The Haikou-based carrier had a fleet of 91 aircraft as of June 30 (11 737-300s, nine 737-400s, 56 737-800s, three 767-300s, four A319s, five A330-200s and three A340-600s).

Boosted by the domestic market's strong recovery, passenger boardings climbed 13.2% to 8.1 million and load factor fell 3.5 points to 77%. Cargo volume rose 0.4% to 97,500 tons.

HNA expects to improve its performance in the second half as "stable growth of the domestic market, lower fuel prices and gradual implementation of the government's favorable policies" take effect. It said the "international market has showed signs of hitting the bottom."

by Katie Cantle

Originally published 2 Sep 2009 at: http://feeds.atwonline.com/~r/AtwDailyNews/~3/Y5U7_6xoe1g/story.html