China: Why 297m fliers aren't boosting airline profits
China’s top three airlines are poised to show this week that they’ve been hard hit by a jump in crude prices and the yuan’s depreciation. Combined net income at Air China, China Eastern Airlines and China Southern Airlines probably fell more than 50% to 4.95b yuan ($727m) in H1 2018, based on the median of estimates in a Bloomberg News survey of analysts. Chinese carriers aren’t allowed to lock in fuel costs -- the largest expense for Asian airlines -- through hedging. On top of that, with major expenses including aircraft purchases being paid for in dollars, Chinese airlines are vulnerable to a weakening yuan as they have “insignificant” currency hedging in place, according to Toliver Ma, an analyst at Guotai Junan Securities. Story has charts showing what’s in focus when the airlines report results this week. <br/>
https://portal.staralliance.com/cms/news/hot-topics/2018-08-28/general/china-why-297m-fliers-arent-boosting-airline-profits
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China: Why 297m fliers aren't boosting airline profits
China’s top three airlines are poised to show this week that they’ve been hard hit by a jump in crude prices and the yuan’s depreciation. Combined net income at Air China, China Eastern Airlines and China Southern Airlines probably fell more than 50% to 4.95b yuan ($727m) in H1 2018, based on the median of estimates in a Bloomberg News survey of analysts. Chinese carriers aren’t allowed to lock in fuel costs -- the largest expense for Asian airlines -- through hedging. On top of that, with major expenses including aircraft purchases being paid for in dollars, Chinese airlines are vulnerable to a weakening yuan as they have “insignificant” currency hedging in place, according to Toliver Ma, an analyst at Guotai Junan Securities. Story has charts showing what’s in focus when the airlines report results this week. <br/>
