Chinese airlines face the rise of fuel cost as for its worldwide network

Published on : Thursday, August 31, 2017

Chinese airlinesChinese airlines face the rising costs and the falling returns for their worldwide expansion.

 

 

By the declining first-half core profits of China’s largest airlines, the fare prices are hiked due to the aggressive expansion of plane fleets in Asia, Europe and America.

 

 

The state-owned airlines of China serve the fastest growing air travel market in the world. But their margins are dampened for the expansion of plane fleets and unhedged positions on fuel which has made them vulnerable to a 28% rise in price over the period.

 

 

 

Air China and China Southern Airlines respectively posted a 3.8% and 11.6% decline in profits. The China Eastern Airlines’s profit rose 34.5%, but this was boosted by a sale of its air freight unit.

 

 

 

The costs grew significantly, with China Southern saying that its flight operation expenses rose by 30.5% while China Eastern’s operating expenses increased by 11.7% on a 45% jump in its total aircraft fuel costs.

 

 

According to Andrew Lee, there is a forecast of pre-exceptional earnings to decline as Chinese airlines struggle to pass through the higher costs.

 

 

 

Another to another Chinese airlines, Shanghai-based, Juneyao Airlines, similarly blamed higher fuel costs for its 12 percent fall in first-half net profit.

 

 

The yields on the international routes in particular have declined over the period for the three big airlines.

 

 

 

Apart from capacity expansion of the Chinese airlines, the analysts also said the cancellation of lucrative routes to South Korea as Beijing pressured South Korea over Seoul’s deployment of a US missile defense system, played an important role.

 

 

 

The international passenger yields of China, excluding the fuel surcharge, which fell 1.1 percent while China Southern’s yields on international routes, which has been declined about 7.5%. The Air China’s yield on overseas routes dipped 3.2%.

 

 

 

The domestic air routes fared the better in comparison with China Southern. This air route is experiencing the flat yield growth and China Eastern’s rising 1.5%.

 

 

 


(No Like Yet)

Related Posts

Tags: , , , ,

Comments are closed.

arrow2Follow TTW
 
facebook-logo  twitter-logo  LinkedIn_logo  rss_logo 
ttw_blogger_logo  ttw_blogger_logo

ADVERTISEMENT

  • 01 WTM 2020
  • 02 WTM London 2020
  • 06 ITB Asia 2020
  • 06 SATTE-GenX-Virtual-Expo
  • 13 traveldaily20
  • 16 FHC 2020
  • 16 G&A 2020
  • 16 ITB asia 2020
  • 16 TAAPE 2020
  • 17 GWS-2020
  • 23 emitt 21
  • 30 PATA

TRAVEL INDUSTRY EVENTS

    1. THE ANNUAL HOTEL CONFERENCE (AHC)

      September 21 - September 22
    2. IT&CM ASIA

      September 22 - September 24
    3. KITF

      September 24 - September 26
    4. routes asia

      October 8 - October 10
    5. FOIRE DE TOURS 2020

      October 10 - October 18
Get our toolbar!
Review www.travelandtourworld.com on alexa.com