BEIJING, Aug. 31, 2017 /PRNewswire/ -- Air China
Limited ("Air China" or "the Company," together with its
subsidiaries, collectively "the Group") (HKEX: 00753; LSE: AIRC;
SSE: 601111: ADR OTC: AIRYY), today announced its interim results
for the 6 months ended June 30, 2017
("the Period").
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Business Highlights
- Turnover rose year-on-year by 8.82% to RMB 58.746
billion
- Operating expenses increased year-on-year by 15.12% to
RMB 52.939 billion
- Profit before tax increased year-on-year by 2.67% to
RMB 5.174 billion
- Net profit increased year-on-year by 3.33% to RMB 3.921
billion
In the first half of 2017, the China passenger aviation market
continued to show strength in demand and supply while cargo
business showed signs of recovery, outbound travel demand continued
to rise, and international traffic grew steadily. Passenger load
factor has increased steadily with enhanced efficiency, against a
background of aggressive capacity deployment. The Group has
capitalized on market opportunities by prudently expanding its
business scale, optimizing efficiency, improving yield and
strengthening cost management to reinforce its competitive
advantage in the core business. In spite of unfavorable factors
such as higher jet fuel prices, the Group has delivered solid
results for the period.
Financial Highlights
The Group recorded a turnover of RMB 58.746 billion in the
first half of 2017, an increase of 8.82% from the same period last
year.
Air passenger revenue was up 8.02% year-on year to RMB 51.052 billion, while air cargo revenue
went up by 19.65% year-on-year to RMB
4.487billion.
Operating expenses increased by 15.12% to RMB 52.939 billion, up from RMB 45.987
billion reported in the first half of 2016. Jet fuel cost recorded
a year-on-year increase of RMB 3.902 billion, up by 40.11%
from the same period last year, mainly due to the increase in jet
fuel price.
Net profit increased year-on-year by 3.33% to RMB 3.921
billion. During the period, the Group recorded an exchange gain of
RMB 1.270 billion as compared to a loss of RMB 1.698 billion the same period of last year,
arising from the depreciation of USD to RMB.
Business Review
In the first half of 2017, the Company's capacity measured by
Available Tonne Kilometers (ATK) was 17.142 billion, representing a
year-on-year increase of 3.77%. Traffic measured by Revenue Tonne
Kilometers (RTK) was 12.092 billion, representing a year-on-year
increase of 6.35%.
The Company tightened cost control to improve efficiency,
strengthened strategic synergies, optimized the structural
composition of its resources and maintained its competitive cost
advantage. Through enhanced internal and external coordination, it
capitalized on a window of opportunity for stock placement,
successfully completed its secondary offering of A shares, and
raised RMB 11.2 billion.
Passengers
In the first half of 2017, the Group carried a total of 49.20
million passengers, a year-on-year increase of 5%. Passenger
capacity, measured by Available Seat Kilometers (ASK), increased by
4.94% to 118.992 billion. Capacity for domestic and international
routes rose by 4.96% and 6.41% respectively, while capacity for
regional routes fell by 7.40%. Overall passenger traffic, measured
by Revenue Passenger Kilometers (RPK) increased by 6.53% to 96.415
billion. Traffic on domestic and international routes increased by
6.30% and 8.47% respectively, while regional traffic dropped by
6.65% year-on-year. Passenger load factor rose by 1.20 percentage
points to 81.03%. Revenue per RPK reached RMB0.53, an increase of 1.42% year-on-year.
In the first half of 2017, the Group introduced 16 aircraft,
including 2 B787-9 aircraft, and phased out 11 aircraft, further
enhancing the alignment of its fleet and network. The total fleet
size was 628 aircraft, with an average age of 6.53 years. During
the period, the Company prudently expanded and developed its
network, effectively enhancing the value of hub networks, and
continuously optimized the global network. In coordination with the
national strategic development of "One
Belt, One Road" and the integration of Beijing, Tianjin and Hebei, the Company launched international
routes from Beijing to Astana,
Zurich, and domestic routes from
Beijing to Zhengzhou to Shaoyang, and linked 17 European
cities with domestic cities via Beijing with through check-in baggage service,
which further enhanced connecting capabilities for the Beijing hub. Meanwhile, the Company keeps
developing the Shanghai
international gateway, Chengdu and Shenzhen regional hubs. Route network has been
further developed by launching new routes (including resumption
routes), such as Shanghai-Barcelona, Chengdu-kashgar, Hangzhou-Liupanshui, Hong
Kong-Yuncheng etc. As of June 30,
2017, the Company's passenger traffic routes have expanded
to 408 in total across 6 continents, including 287 domestic, 106
international and 15 regional routes. The Company's network covers
39 countries and regions globally and 184 cities, including 115
domestic, 66 international and 3 regional cities. Through Star
Alliance, the Company's route network extends to 1,307 destinations
in 191 countries.
The Company vigorously enhanced its yield level, accelerated its
business model transformation, and enhanced its core brand value.
With the gradual recovery in business travel in the first half of
2017, the Company has significantly increased its deployment of
wide-body aircraft for domestic routes in key markets. As domestic
traffic continues to grow steadily, the Company has effectively
executed its price priority strategy further reinforcing the
competitive advantage of its industry-leading yield level. Through
the optimization of its premium classes pricing structure and
broadening of premium classes customer resources, the Company has
significantly improved both the yield and the revenue contribution
of premium classes, with domestic and international revenue rising
by 22% and 7% year-on-year respectively.
With our innovative business model, mobile APPs have been
upgraded 6 times with functions including delayed flight baggage
enquiries etc, further improving passenger travel experience. As
part of our sustained efforts to identify new revenue streams, in
the first half of 2017, revenue from ancillary services such as
seat selection fee and boarding gate ticket upgrading has increased
by 68% year-on-year. The total number of "Phoenix Miles" members
amounted to 46.28 million and with increasing activities, revenue
contribution was up by 23% compared to the corresponding
period last year. The brand strategy is forging ahead with the
brand image design duly completed. In a branding partnership
with the "2019 China Beijing World Garden Exhibition", Air China
has become the highest level global partner and the sole airline
sponsor. Brand value has been consistently enhanced.
Cargo Business
In the first half of 2017, the global trade recovery accelerated
with emerging signs of growth pick-up in the international
transport market. However, domestic market growth was relatively
slow amid China's economic transformation. Air China Cargo has proactively transformed its
business model, and continuously strengthened the passenger and
cargo business alignment to steadily improved the load factor of
bellyhold. The route structure has been optimized with better
margin contribution. By levering its trunk routes advantage through
resource sharing, new business initiatives progressed with pleasing
results. These various measures have proactively addressed the
challenging operating environment for the cargo business to
maintain profitability.
In the first half of 2017, the Available Freight Tonne
Kilometers (AFTK) of Air China Cargo increased by 1.90%
year-on-year to 6.408 billion, while the Revenue Freight Tonne
Kilometers (RFTK) increased by 6.20% year-on-year to 3.531 billion.
The cargo and mail load factor increased by 2.23ppts to 55.09%. The
cargo yield was RMB1.27, a
year-on-year Increase of 12.66%.
Outlook
Looking ahead, China's economic growth will continue its steady
trajectory, and the civil aviation market will continue its rapid
pace of growth. The Company looks to capitalize on strategic
opportunities while aware that industry competition, particularly
in the international market will continue to intensify, the
business environment will become more complex, and uncertainties
from oil price fluctuations and geopolitical risks will persist. In
addressing the opportunities and challenges ahead, the Company will
remain focused on the goal of becoming a "mega network airline with
international competitive edge" and on upholding our prudent
management philosophy, deepening reform with innovation, and
enhancing our competitive advantage in the international market so
as to deliver better returns to shareholders and to society.
About Air China
Air China Limited (Air China) is the national flag carrier of
China and a leading provider of passenger, air cargo and
airline-related services and products in China. Its operational headquarters is in
Beijing, a major domestic and
international hub in China. It
also provides airline-related services, including aircraft
maintenance, ground handling services in Beijing, Chengdu, and other locations. As of
June 30, 2017, the Group operated a
fleet of 628 aircraft with an average age of 6.53 years, while the
Company operated a fleet of 385 aircraft with an average age of
6.57 years. Passenger traffic routes have reached 408, including
106 international, 15 regional and 287 domestic routes. The
Company's network covered 39 countries and regions globally and 184
cities, including 66 international, 3 regional and 115 domestic
cities. Through the Star Alliance, the Company's route network
extends to 1,307 destinations in 191 countries. Air China was
listed on Hong Kong Stock Exchange and London Stock Exchange on
December 15, 2004 under codes 00753
and AIRC respectively. On August 18,
2006, Air China was listed on Shanghai Stock Exchange under
code 601111. For further details, please visit Air China's website:
www.airchina.com.cn.
Safe Harbor Statement
This press release contains projections and forward-looking
statements that reflect the company's current views with respect to
future events and financial performance. These views are based on
current assumptions which are subject to various risks and which
may change over time. No assurance can be given that future events
will occur that projections will be achieved, or that the company's
assumptions are correct. Actual results may differ materially from
those projected.