[Exclusive] China's Civil Aviation Profits Fell in First Half on Economy, Oil Prices
Chen Wei|Xue Bingbing
/SOURCE : yicai
[Exclusive] China's Civil Aviation Profits Fell in First Half on Economy, Oil Prices

(Yicai Global)July 18 -- Profits of China's civil aviation industry have declined in the first half of this year amid an economic slowdown, rising costs, and tightening competition, as well as the grounding of 737Max planes after accidents.

The total profit of the sector fell 2.4 percent to CNY31.6 billion (USD4.6 billion), the Civil Aviation Administration told Yicai Global yesterday. The cumulative gains of airlines dropped 24.5 percent from the previous year, the report predicted, even if airlines have not published their earnings yet. 

Since the beginning of this year, the CAA has ramped up policy support for aviation firms to reduce costs but rising oil prices, increased exchange rate fluctuations, reduced number of business travelers, and fierce competition with high-speed railway operators have caused pressures to build up, Feng Zhenglin, director of the bureau, told Yicai Global. 

The macroeconomic slowdown and the halted 737Maxs have also had a certain effect on the growth rate of passenger traffic, said Lin Zhijie, a civil aviation industry insider, said to Yicai Global. After two deadly accidents, the Civil Aviation Administration of China ordered the nation's aviation firms to stop using their 96 Boeing 737 Max planes in March, after which they halted new deliveries of such aircraft.  

The operating income of China's civil aviation industry was CNY527.75 billion, rising 7.1 percent from the previous year. The sector served 320 million passengers, 8.5 percent up from the previous year. However, airlines' income per kilometer, signaling ticket prices, decreased by 2.5 percentage points. Their average seat occupancy rate inched down by 1.3 percentage points.

At domestic airports, passenger throughput rose 7.2 percent annually. However, the clip of growth decreased by 4.8 percentage points. Airports' cargo and mail throughput slid by 0.7 percent as 40 percent of the top 30 aviation bases logged reducing numbers.

Editor: Emmi Laine

Follow Yicai Global on
Keywords: Civil Aviation , Economic Downturn , 737 Max , Oil Prices