China Southern posts $30.5 million first half profit

China Southern A320.

China Southern Airlines reported net income of CNY207.6 million ($30.5 million) for the 2010 first half, a considerable expansion over a CNY38 million profit in the year-ago period and said the increase is owing to robust domestic market growth and the sale of its 50% stake in MTU Maintenance Zhuhai to parent company China Southern Group for CNY1.1 billion.

Operating revenue jumped 39.4% to CNY34.68 billion while expenses climbed 30% to CNY28.94 billion, in part owing to a 63.4% increase in fuel costs to CNY10.88 billion. Passenger boardings rose 17% to 36.2 million and load factor was 77.9%, up 3.1 points. Cargo traffic volume lifted 37.6% to 512,000 tonnes.

Looking ahead, CZ said it will continue to benefit from the strong growth of the domestic market, but cautioned that challenges still remain owing to a “slowdown of the global economic recovery."

Industry analysts are optimistic about the third quarter, China's traditional peak travel season. China Merchants Securities predicted Air China, CZ and China Eastern Airlines will report third quarter net income of CNY4 billion, CNY2 billion and CNY2.8 billion respectively.