HONG KONG, April 23 /PRNewswire-Asia/ -- 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 financial results (1) for the
twelve months ended December 31, 2009
("the Period").
(Logo: http://www.newscom.com/cgi-bin/prnh/20080625/CNW017LOGO )
Results Highlights
-- Turnover was RMB51.39 billion, a decrease of 2.86% year-over-year
-- Operating expenses were RMB45.89 billion, a decrease of 26.82% year-
over-year
-- Fuel cost was RMB14.47 billion, representing a 36.03% decrease year-
over-year
-- Profit attributable to shareholders was RMB4.85 billion, compared with
net loss(restated) of RMB9.26 billion in 2008
-- Basic earnings per share was RMB0.41, compared with a basic loss per
share(restated) of RMB0.78 in 2008
In 2009, China experienced a
quicker-than-expected economic recovery, which underpinned the
strong growth of the domestic aviation industry. With the
stabilization of global economy, international aviation markets
also began to recover towards the latter part of the year. Against
this backdrop, the Company was able to capitalize on market
opportunities through the continued execution of its growth
strategy and the timely implementation of strategic measures
focusing on hub development, capacity allocation optimization,
stringent cost control and yield management enhancement. These
strategic efforts allowed the Company to achieve a strong recovery
in our operating and financial results with a record high operating
profit in 2009. The Company's net profit attributable to
shareholders for the year amounted to RMB4.85 billion.
Financial Highlights
Turnover
In 2009, the Company's turnover was RMB51.39 billion, a decrease of 2.86%, compared
with RMB52.91 billion (restated) in
2008.
Passenger revenue was RMB42.7
billion, a year-over-year decrease of 1.5% from RMB43.35 billion (restated). Cargo revenue fell
24.9% to RMB5.4 billion, from
RMB7.19 billion in 2008
(restated).
Operating Expenses
Total operating expenses decreased by 26.82%, to RMB45.89 billion, from RMB62.72 billion(restated) in 2008, primarily due
to the drop in average jet fuel prices as compared to 2008.
Driven by the decrease in average jet fuel prices, the Company's
fuel cost dropped by 36.03% year-over-year to RMB14.47 billion in 2009. However, the suspension
of the collection of the domestic jet fuel surcharge in the first
three quarters of the year resulted in a 56.28% decrease in fuel
surcharges.
Gain from Hedging Contract
The upward trend in fuel prices during the year resulted in a
decrease in negative fair value of fuel hedging contracts by the
end of the year. During the Period, the Company realized a fair
value gain from hedging contracts of RMB2.76
billion, yielding a positive contribution to the results for
the Period.
Operating Profit
During the Period, the Company recorded an operating profit of
RMB5.5 billion, compared with a loss
(restated) of RMB9.81 billion in
2008. The turnaround in operating profit was mainly due to
increased revenue from growing domestic traffic, and change in fair
value of fuel derivative contract.
Net Profit
Profit attributable to shareholders was RMB4.85 billion, compared with a loss(restated)
of RMB9.26 billion in 2008. The
enhancement of profitability was primarily due to the significant
improvement in operating profit, the increase in investment gain
and the decrease in negative fair value from fuel hedging
contracts.
In accordance with the relevant Chinese laws and regulations,
the Company did not have distributable profit for 2009. As a
result, no final dividend will be paid out for 2009.
The Company has separately announced the first quarter of 2010
unaudited results.
Operational Highlights
Passenger Service
In 2009, the Company carried a total of 41.28 million
passengers, an increase of 14.23% from 36.14 million in 2008.
Passenger capacity, measured by Available Seat Kilometers (ASK),
increased by 7.42% to 98.62 billion. Capacity on domestic routes
increased by 18.46%, while capacity on international and regional
routes decreased by 5.51% and 1.22%, respectively. Overall
passenger traffic, measured in Revenue Passenger Kilometers (RPK)
increased by 9.78% to 75.47 billion. Traffic on domestic routes
increased by 19.26%, and traffic on international and regional
routes decreased by 1.26% and 1.24%, respectively. Passenger load
factor improved to 76.53%, an increase of 1.65 percentage points
year-over-year. Yield per RPK was RMB0.57, down by 9.52% year-over-year.
Cargo Services
Despite the significant drop in cargo market demand in the first
half of 2009, there was a gradual recovery in demand in the second
half of the year. The recovery in cargo services was achieved by
the implementation of a range of strategic initiatives namely
network optimization , improved product and strengthened yield
management, which resulted in the segment achieving a profit in
2009. Cargo capacity, measured by Available Freight Tonne
Kilometers ("AFTK"), increased by 2.38% to 6.51 billion in 2009.
Cargo traffic, measured by Revenue Freight Tonne Kilometers
("RFTK"), decreased by 2.28% to 3.53 billion. The cargo and mail
load factor was 54.23%, a decrease of 2.58 percentage points.
Hub Strategy
The Company made substantial progress in hub development during
the year. The number of aircraft based in Beijing hub was 150, an increase of 14. Market
share for the hub, measured by RPK, reached to 52.2%. The number of
transfer passengers increased by 34%.
The Company also further strengthened its position in the
Chengdu hub and Shanghai international gateway. The expanded
network and service resulted in a significant improvement in hub
connectivity. The number of transfer passengers at Chengdu and Shanghai increased by 74% and 10%
respectively.
Consolidation of Resources
In 2009, the Company executed a number of strategic measures in
resources consolidation. First, it established a Hubei subsidiary that quickly commenced
operation during the year. The Hubei unit allowed the Company to establish a
strong foothold in Central China
while providing a platform to further improve the domestic network.
The Company also formed a subsidiary in Shanghai to consolidate its resources and to
enhance its competitive position in Eastern China.
In addition, the Company increased its holdings in Cathay
Pacific Airways to 29.9%, further developing the foundation for a
closer strategic relationship with Cathay Pacific. Finally, the
Company completed the acquisition of minority ownership of Air
China Cargo during the year, paving the way for formation of the
cargo joint venture.
Fleet Optimization and Network
Air China adhered to its
prudent policy relating to fleet expansion and managed its fleet in
a proactive and flexible manner. During the year, the Company added
31 aircraft, all narrow-body aircraft such as models A321 and
B737-800. Meanwhile, the Company phased out 12 aircraft including
models B767, B737-300/600, B747-200F.
In view of the changing traffic demand dynamics in both domestic
and international markets, the Company adjusted capacity deployment
accordingly. A higher portion of capacity was allocated to the
domestic market to meet growing demand while capacity for certain
international routes was reduced in response to softening demand.
The allocation of capacity was skewed towards high-yield and
high-return markets with low-yield and heavy-loss making routes
reduced.
As of the end of December, the Company (excluding Air Macau)
operated a fleet of 262 aircraft. The Company's network covers 32
countries and regions, including 63 international, 90 domestic, and
3 regional cities. 19 routes were added in response to market
demand.
Sales and Marketing Initiatives
In response to the prevailing dynamic market conditions, the
Company also adjusted its sales and marketing strategy to enhance
yield performance. The Company stepped-up sales efforts aimed at
frequent flyers and higher-end travelers, which enabled it to
achieve gradual increase in premium class revenue amid an
industry-wide drop in premium class demand. Frequent Flyer members
rose to 11.47 million and contributed sales of RMB9.89 billion, an increase of 16.2%. Sales from
corporate customers increased by 15.7% year- over-year to
RMB4.98 billion while sales from
e-commerce reached RMB3.27 billion,
an increase of 35.5% year-over-year.
During the year, the Company launched seven express service
routes, including Beijing to
Chengdu and Beijing to Chongqing, expanding the service network and
providing more convenient service to travelers.
Cost Control
During the year, Air China maintained its cost advantage in the
industry. A wide range of initiatives were put in place to improve
operating efficiencies and to further reduce costs. These measures
included adjustments in the fleet structure, better alignment of
capacity and demand, an extensive energy saving program and
optimization of the Company's debt structure.
Outlook
"2009 was an historic year for Air China as we successfully
navigated the extraordinarily challenging aviation market, emerging
with strengthened operating and management capabilities," Mr.
Kong Dong, Chairman of Air China
said.
"Nevertheless, we will undoubtedly face new challenges in the
year ahead. The positive trends in the aviation industry will
continue with the support of the recovering global economy.
However, the rapid increase in domestic capacity and the growing
optimism and expanded capacity of international carriers will
further intensify competition in the Chinese aviation market. In
addition, High Speed Rail will begin to impact certain segments of
the market, while fluctuations in oil prices and exchange rates
will create further uncertainties in our operations.
"Despite these challenges, our business is well positioned to
benefit from China's rapid
economic growth which will drive the continuous demand for domestic
air traffic. International air travel will also recover with the
global economy. The Company's position will be further enhanced
with an increased interest in Shenzhen Airlines, which perfectly
complements our ongoing strategic hub strategy and will help to
further bolster our network and domestic market position. Our
strengthened partnership with Cathay Pacific and the joint
initiatives will also deliver numerous operational benefits and
synergies. We are confident that these initiatives, together with
our enhanced operating capabilities and the support of our united
team, will enable us to deliver a better result for our
shareholders," Mr. Dong concluded.
(1) All figures are unaudited, stated according to International Financial
Reporting Standards ("IFRS")
About Air China Limited
Air China Limited (Air China) is the national flag carrier of
China and a leading provider of
air passenger, air cargo and airline-related services and products
in China. Its operational head
office is in Beijing, a major
domestic and international hub in China. It also provides airline-related
services, including aircraft maintenance, ground services in
Beijing, Chengdu, and other locations. As of
31 December, 2009, the Company
operated a fleet of 262 aircraft, serving 156 destinations in 32
countries and regions. Air China
was listed on the Hong Kong Stock Exchange and the London Stock
Exchange on December 15, 2004 under
codes 00753 and AIRC respectively. On August
18, 2006, Air China was listed on the Shanghai Stock
Exchange under code 601111. For further details, please visit Air
China's website: http://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.
Contact:
Air China:
Rao Xinyu, General Manager of IR
Air China Limited
+86-10-6146-2777
raoxinyu@airchina.com
Joyce Zhang
Air China Limited
+86-10-6146-2560
joycezhang@airchina.com
Investor Relations:
Ruby Yim
Taylor Rafferty, Hong Kong
+852-3196-3712
AirChina@taylor-rafferty.com
Mahmoud Siddig
Taylor Rafferty, New York
+1-212-889-4350
AirChina@taylor-rafferty.com
SOURCE Air China Limited