Wages of China Airlines hit with the increase in fuel price
In the first half of the year Chinese airlines reported poor wages due to the rise in the prices of the fuel. On Wednesday Air China gave a statement that their net profits for January-June cut down to 1.24 billion yuan for the first six months when compared with 1.57 billion yuan in the previous year. According to a statement issued on late Tuesday to the Hong Kong Stock Exchange, their competitor China Eastern Airlines those are from Shanghai reported loss of 211.5 in the first half of the year. It compared to the loss of 304.6 million yuan in the month of January-June of 2007.
The growing economy of China and correspondingly impressive expansion in the cargo and passenger demand have helped a lot in dealing the issue of rising fuel prices. But with the disastrous earthquake that came on May 12 in Central China and due to the Beijing Olympics the passenger traffic considerably slowed down.
According to a statement by Air China, due to the slump in the international economy, increased price rise, natural calamities like earthquake, rising prices of the fuel in the first half of the current year, the aviation industry especially aviation industry of China had to face a lot of difficulties. On the other hand China Eastern despite of the fact that there is a 1.9 percent profit noticed in the traffic on domestic routes they also witnessed a downfall for its international and Hong Kong routes. It was estimated the further weakening in the international and Chinese economies.
It was said that in the remaining year the demand for the air transport will witness a downfall as the increasing cost will emerge as a main issue. Both the airlines anticipated that with the easing of the transport limitations there will be development in the field of travel to the island of Taiwan.
With the rise of Chinese currency as compared to the American Dollar the Foreign exchange gains of around 1.8 billion yuan was projected by both the airlines. But unfortunately for the past few months the gains for yuan came down with the dollar bouncing back in the global markets.