Chinese carriers have reported a collective net income of CNY4.8 billion ($785 million) in April, up sevenfold year-over-year.
Total operating revenue was up 9% to CNY35.2 billion while operating expenses decreased 4% to CNY27.9 billion. Industry analysts credited lower fuel prices and exchange gains resulting from yuan appreciation for the improved performance.
Since fuel costs make up nearly 40% of domestic carriers’ total operating expenses, the sharp decline is sure to improve Chinese airlines’ financial performance. The exchange rate between the US dollar and yuan grew 0.48% in April, which generated exchange gains of CNY430 million for Chinese carriers as they purchase aircraft in US dollars.
Passenger boardings jumped 14% to 35.79 million with an average load factor of 83.1%, up 1.7 points over the year-ago period. Cargo traffic volume rose 6% to 520,000 tonnes.
Looking ahead, industry analysts expect demand on international routes to become a new growth point as they predict international passenger boardings will grow 16% to 18%; demand on domestic routes is predicted to increase 9% to 10%. For this reason, domestic carriers are all boosting their international capacities accordingly.