China Eastern Airlines posted a first-half net income of CNY2 billion ($28 million), down 14.8% from CNY2.35 billion in the year-ago period, as increased fuel costs, fluctuating currency rates and global trade disputes increased expenses.

Revenue was up 8% year-over-year (YOY) to CNY58.8 billion, but expenses rose 9.3% to CNY52.2 billion. On top of a 9% hike in fuel costs, airport landing fees rose 10.5% and employee costs were up 13.9% as the carrier’s network and staff grew.

The Shanghai-based airline served 64 million passengers during the period, an 8.6% YOY increase. Traffic grew 10.6% and capacity was up 10.4%, resulting in a load factor improvement of 0.2 points to 82.6%. Yield, excluding fuel surcharges, shrank 1.65%.

The airline said revenue from partnerships increased 30% YOY and it will continue to strengthen its relationships with fellow SkyTeam alliance members Air France and KLM Royal Dutch Airlines on new routes, including those between Paris and Wuhan, Kunming and Qingdao. China Eastern also plans to expand codeshare routes with Qantas, Delta Air Lines and Lucky Air.

Shanghai Pudong Intranational Airport’s new S1 satellite terminal will be the airline’s main focus upon its opening in the second half of the year. The carrier expects the facility to improve operational efficiencies and create better connections with partnering airlines. 

By the end of 2019, China Eastern expects to take delivery of 16 Airbus A320s, an A350, two Boeing 787s and 16 737-family aircraft.

Chen Chuanren, chuanren@purplelightvisials.com