Home>>Trade News>>details

Airline May Not Meet Earnings Goal

Jul 7, 2008 Trade


Soaring fuel costs may prevent Shanghai Airlines from achieving its earnings target of 200 million yuan (US$29 million) this year, a senior company official said Friday.


Jet fuel prices have surged to 8,200 yuan per ton, compared with 3,000 yuan in 2005, and raised costs by an extra 400 million yuan, so it is hard to realize our target, Fan Hongxi, president of the Shanghai-listed company, said on the sidelines of a ceremony to launch the city's first weekend chartered flight to Taiwan.


Fan, however, said the carrier should be able to achieve a double-digit growth in passenger volume and revenue in the first half of this year despite a slowdown in May because of the Sichuan earthquake.


Its first-quarter profit rose 147 percent to 36.85 million yuan.


Li Jun, an analyst with Everbright Securities Co, said he estimated surging jet fuel prices will increase costs by more than 20 billion yuan for domestic airlines this year and their revenue will tumble by more than 2 billion yuan from a year earlier.


Domestic carriers raised their fuel surcharge by as much as 50 percent on domestic routes from this month to offset rising costs after aviation fuel price rose by 1,500 yuan per ton on June 20.


But Fan pointed out that increased fuel surcharges cover a very small part of our costs.


The carrier projected it would fly 10 million passengers this year and 17 million by 2010. Its fleet will grow to 100 aircraft from 63 now, according to Fan.


Source: CRIEnglish

 

 

 


 


 

 
图片说明