Tuesday, July 17th, Air China Limited estimated first-half net profit down more than 50% compared to 2011.
The company expects this decrease due to the slow demand in the PRC aviation industry and in the international market, and also due to the year-on-year growth in the price of jet fuel. Air China, considered the country’s flagship air carrier, and other major Chinese airlines are expected to report reduced profits for the first half of this year.
Besides the aforementioned reasons for the decline, another one will be the depreciation of the yuan against US dollars. China Southern’s profit decreased 74.19% in the first quarter, China Eastern Airlines Co Ltd’s profit fell 73.68% and Air China Ltd had an 85.7% decline compared to the same period last year.
“The situation is even worse than in 2008, during the last financial crisis,” Wang Changshun, chairman of Air China, said in an interview last month.
Although the situation is alarming, some business insiders manage to remain optimistic about the profit in the second half of the year.
“I believe the second half of the year will be better,” said Liu Shaoyong, president and chairman of China Eastern Airlines.