China Southern Airlines (CZ) reported a 2011 net income of CNY5.11 billion ($805.7 million), down 11.8% from CNY5.79 billion in 2010, due to high fuel prices and weak cargo growth.
Operating revenue increased 18.2% to CNY90.39 billion while expenses climbed 23.2% to CNY87.06 billion. Fuel expenses increased 39% to CNY32.67 billion.
RPKs grew 9.9% to CNY122.3 billion against a lift of 7.5% in ASKs to 151.06 billion. Passenger boardings increased 5.5% to 80.7 million with an average load factor of 81%, up 1.8 points over the year-ago period. Cargo traffic volume rose 1.6% to 1.135 million tonnes.
As of Dec. 31, 2011, the Guangzhou-based carrier operated 444 aircraft. It introduced 22 aircraft in 2011.
Looking ahead, CZ said it will take advantage of the long-term stable economic growth of China and the “domestic consumption upgrade” that will stimulate the continuous growth of market demands. The carrier warned that weak global economic growth and the slowdown of the domestic economic growth rate could weaken the operating environment. Rising fuel prices, growing competition rapidly growing domestic capacities remain challenges for the airline.
Industrial Securities said the carrier’s Airbus A380 operations may have a negative effect on the airline, hurting its financial performance due to the aircraft’s frequent malfunctions and the fact that it still hasn’t secured approval for use on international routes. CZ operates the A380 on its Beijing (PEK)-Guangzhou and PEK-Hong Kong routes.
The carrier received the first of five A380s in October 2011.
Article Source : ATW Daily News
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