China Eastern’s 2018 net profit down 57% as capacity slows

China Eastern posted a 2018 net profit of CNY2.71b ($394m), down 57.4% compared to CNY6.35b achieved in 2017. Total revenue for the year was CNY114b, up 13% year-over-year (YOY). China Eastern’s passenger traffic (RPKs) rose 10% YOY; domestic and international RPKs were up 10.2% and 9.6%, respectively. Capacity (ASKs) grew at a slower pace of 8.3% YOY; international capacity grew 6.9% YOY. As a result, total load factor was up 1.23 points to 82.3%. International and domestic yield grew in parallel, at 4% YOY each. China Eastern’s cargo sector continued to inject 16.3% more capacity (AFTKs), but cargo revenue (RFTKs) grew by only 5.3% YOY, saved by its international network, which was up 9.2%. Domestic and regional cargo revenue dropped 1% and 4.8%, respectively. The airline said the promising aviation growth in China is overshadowed by trade protectionism and a global economic slowdown. Despite the averaging jet fuel prices, growth is undermined by the depreciation of the Chinese yuan against the dollar.<br/>