China Southern profits fall
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Guangzhou based carrier China Southern Airlines has posted a half yearly profit of US$56.2 million – an 18.9% year-on-year drop.
According to its unaudited interim financial report, the group’s total operating income for the half year is US$7.5 billion, falling 1.6% over last year’s result. China Southern claims the operating income is largely impacted by reforms in business tax and valued added tax.
However, foreign exchange earnings have resulted in a stronger RMB over US dollar, which has offset the carrier’s net loss of US$23.5 million in operating income.
Against the backdrop of a 1.9% profit decrease in combined domestic passenger and cargo transport (including mainland, Macau, Hong Kong and Taiwan) over the same period last year, the carrier has reported improved performance in international services. The group says the continued push for strategic international transformation has gained momentum in that transit traffic flows increase rapidly, contributing to a revenue of US$1.12 billion up 8.5% over January-June 2012.
However, the company has been put under increasing pressure by economic conditions both at home and internationally, as well as slackening market demand and rising domestic competition through other carriers and high speed rail.
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