Both airlines expect net profit in Q1 to fall by more than 50%
According to reports by Reuters, both China Southern Airlines and China Eastern Airlines say that they expect their net profit in the first quarter to fall by more than 50% from the same period in 2011. The airlines cite the slowing Chinese economy and increasing aircraft fuel prices as the reasons for the expectations of a weaker performance.
“Due to factors including the slowdown in domestic economic growth and the substantial increase of jet fuel prices, the operating results of the company declined in the first quarter of 2012,” China Southern told the Hong Kong Stock Exchange in a statement. It also blamed currency exchange rates.
Meanwhile, China Eastern Airlines said in a statement: “The slowdown in the growth of demand in the civil aviation market of passenger traffic and inadequate demand in the international cargo traffic market […] affected the growth of the company’s air transportation business.”