China’s 3 biggest airlines face US$1.3b currency losses
China’s 3 biggest airlines are poised to report losses totalling CNY8.5b (US$1.3b) from currency swings this year as a weaker yuan proves a drag amid rising traffic and cheaper fuel. Air China may face CNY3b in foreign-exchange losses, while China Southern is looking at a potential hit of CNY4b and China Eastern Airlines may lose about CNY1.5b. That compares with a combined loss of CNY16.2b in 2015. The carriers are scheduled to announce their first-half earnings this week. A strategy to trim dollar-denominated debt may be paying off as the airlines seek to shield their earnings from declines in the yuan. A weaker local currency typically hurts companies that borrow in dollars to pay for imports such as aircraft. An unexpected devaluation of the yuan last year led to an 18-fold surge in currency losses in 2015 for the 3 carriers. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2016-08-29/sky/china2019s-3-biggest-airlines-face-us-1-3b-currency-losses
https://portal.staralliance.com/cms/logo.png
China’s 3 biggest airlines face US$1.3b currency losses
China’s 3 biggest airlines are poised to report losses totalling CNY8.5b (US$1.3b) from currency swings this year as a weaker yuan proves a drag amid rising traffic and cheaper fuel. Air China may face CNY3b in foreign-exchange losses, while China Southern is looking at a potential hit of CNY4b and China Eastern Airlines may lose about CNY1.5b. That compares with a combined loss of CNY16.2b in 2015. The carriers are scheduled to announce their first-half earnings this week. A strategy to trim dollar-denominated debt may be paying off as the airlines seek to shield their earnings from declines in the yuan. A weaker local currency typically hurts companies that borrow in dollars to pay for imports such as aircraft. An unexpected devaluation of the yuan last year led to an 18-fold surge in currency losses in 2015 for the 3 carriers. <br/>
