China Southern Airlines (CZ) expects its first-quarter net profit to drop by more than half compared to the CNY1.24 billion ($190 million) reported in the year-ago quarter, according to a statement released by the Shanghai Stock Exchange.
The Guangzhou-based carrier cited the slowdown of the domestic growth rate, high fuel prices and the “reduction of exchange gain by a big margin” as main reasons for the gloomy forecast.
China’s other carriers are also bracing for a profit drop. “In the first quarter, domestic carriers increased operating expenses [mainly fuel costs] by 22%, which has a big negative impact over Chinese airlines’ financial performance. To make matters worse, domestic carriers got less exchange gain this quarter over the year-ago quarter,” Great Wall Securities aviation analyst Liu Kun said.
Chinese carriers reported a collective loss of CNY540 million in February and CNY200 million in March.
Article Source : ATW Daily News
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