Air China reported a 2017 net profit of CNY7.2 billion ($1.1 billion), up 6.3% over net income of CNY6.8 billion in 2016 as market demand continues to grow.

Operating revenue increased 7.7% to CNY121.4 billion. Passenger traffic revenue grew 6.4% to CNY106.7 billion and cargo traffic revenue jumped 23.5% to CNY10.3 billion. Operating expenses were up 15% to CNY100.3 billion and fuel costs rose 29.2% to CNY28.4 billion.

Passenger boardings rose 5.2% to 101.6 million with an average load factor of 81.1%, up 0.46 points over 2016. Passenger capacity grew 6.3% to 247.8 billion ASKs against a 6.9% increase in passenger revenue to 201.1 billion RPKs. Cargo traffic volume rose 4.1% to 1.8 million tonnes.

Last year, Air China took delivery of 56 aircraft, comprising six Boeing 787-9s, three 777-300ERs, 24 737 family aircraft, six Airbus A330-300s and 17 A320 family aircraft. The carrier phased out 24 aircraft—three Boeing 777-200s, 18 Boeing 737 family aircraft and two A320 family aircraft.

As of Dec. 31 2017, the Beijing-based carrier operated 655 aircraft with average fleet age of 6.5 years.

Looking ahead, Air China plans to introduce 54 aircraft and retire 22 in 2018. The airline will take delivery of 63 aircraft and phase out 17 in 2019; in 2020, it will introduce 53 aircraft and retire 12.

In 2017, Air China opened 61 domestic and international routes. This year the, carrier opened a Beijing-Panama route and plans to open more new routes, including:

  • Beijing-Copenhagen;
  • Beijing-Barcelona;
  • Chengdu-Bangkok;
  • Chengdu-Bali;
  • Hangzhou-Nha Trang;
  • Chengdu-Hongyuan-Lhasa; and
  • Chongqing-Urumqi.

Looking forward, Air China expects continued market demand growth and aims to transport 109 million passengers this year.

However, the airline also warns that “increasingly fierce market competition—especially more and more international routes have been opened starting from Chinese secondary cities in recent years—has had a big impact on domestic aviation hubs.” It also said the fluctuation of fuel prices and currency exchange rates also remain as challenges.