Friday, March 28, 2008

China Airlines sees a record fall in 2007 profit

China Airlines Ltd, Taiwan's flag carrier, reported a record loss in 2007 net profit, dragged by the surging fuel price and the decreasing number of passengers.

Net loss was NTD 2.52 billion (US$83.7 million), or NTD 0.63 a share last year, compared with a net income of NTD 738.4 million, or NTD 0.19 apiece a year ago, said the company in a filing with the Taiwan Stock Exchange.

The fuel cost climbed to NTD 53.5 billion in 2007, up 8.7% from the previous year, sources quoted John Chang, deputy financial executive of China Airlines as saying. In the fourth quarter, the carrier spent a total of NTD 15.4 billion in fuel, compared with NTD 13.2 billion in the same period of 2006, he added.

In addition, the aviation fuel cost accounted for 44.7% of China Airlines' total operating costs last year, up 4.7 percentage points from a year earlier, according to the latest statistics released by the company. The ratio of passenger throughput slumped 3.3 percentage points over 2006 to stay at 72.8%.

John said the company put aside NTD 1.05 billion to cover the loss of Yangtze River Express Airlines Co, in which China Airlines holds a 25% stake, as well as NTD 133.9 million for the assets devaluation in Far Eastern Air Transport Corp, in which China Airlines owns 5.73% stake, has received approval for its bankruptcy protection in February.

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