Air China profits down 42.55% to RMB 2.1 bln in Q3

Air China<601111><753>, the nation's largest state-owned carrier, announced that its net profit amounted to RMB 2.1 billion in the third quarter, down 42.55% compared with the same period last year, said the company in its third quarter report.

Its revenue has surged to RMB 14.5 billion in the first three quarters, up 15% year-on-year. Operating costs in the third quarter stood RMB 10.3 billion, up 3% year-on-year, while the figure in the first three quarters increased by 10%.

The carrier's net earnings climbed to RMB 3.48 billion in the first nine months, attributable to revenue of RMB 37.21 billion generated from sales of shares. Earning per share in the first three quarters was RMB 0.287, compared with RMB 0.184 in the third quarter alone. The return on net assets fell to 7% in the third quarter, down 2.73 percentage points from the same period last year. The figure in the first 9 months was 11.16%.

As the company gained RMB 1.84 billion through selling shares in Hong Kong Dragon Airlines last year, the earning was pushed up quite a lot in the corresponding period last year, which largely contributed to the dropping earning this year, said the analysts.

The third quarter net profit this year would soar up 93% from the same period last year by deducting gains from share sales, according to the company's report to the Hong Kong Stock Exchange. Analysts said air carriers' profit might drop due to the shrinking tourism in the fourth quarter.

Li Lei, an analyst at CITIC China Securities<600030>, thought steady growing passenger seat ratio and effective control of operating costs would remain the main factors in the profit margin of airlines.