Spring Airlines’ 1H net profit down 25% on higher operating costs

Shanghai-based LCC Spring Airlines reported a net profit of CNY554m ($81.7m) in the 2017 H1, down 25.2% over net profit of CNY740.1m in the year-ago half because of a sharp increase of operating costs. Operating expenses jumped 41% to CNY5b while operating revenue was up 28.1% to CNY5.1b. Ancillary revenue grew 23.6% to CNY409m. Passenger boardings increased 26.8% to 8.32m with an average load factor of 91.8%, down 1.15 points over year-ago period. Passenger capacity rose 30.7% to 16.1b ASKs against a 29.1% increase in passenger revenue to 14.8b RPKs. Cargo traffic volume was up 20.1% to 23,372 tonnes. In the first half, Spring increased domestic capacity but cut international capacity, especially on routes to Japan, Korea and Thailand because of increasingly fierce competition. The ratio of international routes decreased to 30.7% from 34.6% in terms of ASKs while domestic routes were up 65.9% from 61.9%; the number of regional routes (Hong Kong, Macau and Thailand) decreased 3.4% from 3.5%. <br/>