China Eastern reports first half losses

China Eastern Airlines reported losses of 1.46 billion yuan (US$183 million) in the first six months of this year, China Business News said Tuesday. The airline officials blamed surging jet fuel prices, the purchase of Northwestern and Yunnan airlines in the latter half of2005, and fierce competition in the Shanghai market.

The Shanghai-based airline claimed in its quarterly report that it suffered losses of 955 million yuan in the first three months of the year.

Guangdong-based China Southern Airlines also said in its latest report that it lost 835 million yuan between the January-June period of 2006. Last year, the airline lost of 1.794 billion yuan, making it the biggest money loser among Chinese airlines.

Air China, the national carrier, has not yet reported its performance in the first half of the year.

Chinese airlines are facing mounting pressure due to high oil prices and tough competition in domestic market.


According to the General Administration of Civil Aviation of China, the aviation sector suffered losses of 430 million yuan in the second quarter of this year, and 2.57 billion yuan from January to June in 2006.

Industry insiders expect that the State Council’s decision to charge passengers a fuel surcharge on their tickets of 30 yuan for short-haul flights and 40 yuan for long-haul flights starting on Sept 1 could help airlines offset their losses to some extent.