SHANGHAI, March 30 Air China
on Thursday reported a 0.6 percent rise in
2016 net profit, underperforming analyst expectations as
earnings were hit by the weakening yuan and rising costs.
The company's profit attributable to shareholders of 6.8
billion yuan ($987.22 million) fell short of forecasts from
analysts, who expected China's flag carrier to report full-year
reported net income of 7.35 billion yuan, according to 8
analysts polled by Thomson Reuters.
Revenue rose 4.6 percent year-on-year to 114 billion yuan,
it said. It made 4.2 billion yuan in foreign exchange losses due
to the yuan's depreciation against the dollar over
Operating costs overall rose 4.2 percent, although its fuel
bill, which accounts for about a quarter of its costs, fell 8.6
percent. It also increased passenger capacity by 8.6 percent
over the year, while its revenue made per passenger for one
kilometre fell 4.4 percent.
Chinese airlines have been ordering new aircraft to take
advantage of strong demand in the country for foreign travel but
many of these orders were made with U.S dollar-denominated
The carrier's rival, China Eastern Airlines
reported a 0.7 percent fall in full-year
profits on Thursday, its first drop since 2013. It experienced
foreign exchange losses of 3.54 billion yuan.
China Southern Airlines, the country's
largest carrier by passenger numbers, on Thursday reported a 30
percent rise in net profit.
Shares in Air China closed 2.17 percent down on Wednesday,
against a 0.37 fall in the Hang Seng index.
($1 = 6.8880 Chinese yuan renminbi)
(Reporting by Brenda Goh. Editing by Jane Merriman)