April 26, 2018 / 2:59 PM / a year ago

Air China, China Eastern Airlines post jump in first-quarter profits

SHANGHAI, April 26 (Reuters) - Air China reported a higher quarterly net profit on Thursday, which it said was helped by a strengthening yuan and improved passenger and cargo volumes.

China’s flag carrier posted profit attributable to shareholders of 2.63 billion yuan ($415.6 million) for January to March, 79.2 percent higher than the 1.47 billion yuan it reported for the same period last year.

Its rival China Eastern Airlines , the country’s second-largest by passenger numbers, said on Thursday its net profit attributable to shareholders fell 29.6 percent to 1.98 billion yuan for the quarter.

But discounting one-off gains from an asset sale that it made in the first quarter of 2017, China Eastern said its profits rose 49.4 percent, citing a 9.1 percent rise in passenger traffic as one driver.

The two airlines have financed their fleet expansions using many dollar-denominated loans to buy aircraft, so the strengthening of the yuan has helped cut finance costs. It has also helped them offset higher operating costs as fuel prices rise.

Air China’s 2017 results had lagged analysts’ forecasts due to higher-than-expected operating costs.

Earlier this month, the airline said it carried 7.8 percent more passengers in the first quarter, while cargo volumes rose 5.5 percent.

$1 = 6.3286 Chinese yuan renminbi Reporting by Brenda Goh Editing by Himani Sarkar and Edmund Blair

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