Air China’s net income rose 4.4% in the third quarter to CNY3.6 billion ($510 million), compared to CNY3.45 billion in the year-ago period, as costs fell and traffic grew.

Operating costs declined 4.6% year-over-year (YOY) to CNY2.8 billion. The group’s traffic, measured in RPKs, increased 5.9%, and capacity was up 5.4%.

For the first nine months of the year, group revenue was up 0.2% YOY to CNY103 billion, while net profit declined 2.5% to CNY6.7 billion.

Traffic to Hong Kong, the site of anti-government protests, declined 19.3% in the quarter, and capacity to the region was cut by 9.3%. Chinese tourists turned to Japan and South Korea, however, where traffic shot up 17.5%.

From January to September, Air China’s traffic in North Asia averaged 16.2% growth following warmer geopolitical relations among Beijing, Seoul and Tokyo. 

Subsidiaries Shenzhen Airlines and Air Macau recorded third-quarter passenger growth of 9.9% and 17.1%, respectively, and capacity increases of 8.4% and 20%.

 Chen Chuanren,