According to China Eastern Airlines' annual report, the company made a net loss of 14.046 billion yuan in 2008. The net loss attributable to equity holders of the company was 13.928 billion yuan. China Eastern Airlines is now insolvent, with debts as high as 13 billion yuan.
The largest loss in Chinese aviation history has been revealed after China Eastern Airlines posted huge losses in its annual report on the evening of April 15, with 14.046 billion yuan in net losses, or 13.928 billion yuan of net losses attributable to equity holders of the company. This loss is equivalent to the value of eight Airbus A380 aircrafts.
According to the annual report, China Eastern Airlines achieved 41.842 billion yuan in operating revenue in 2008, a decline of 4 percent year-on-year, while its operating expenses stood at 43.076 billion yuan, an increase of 14 percent year-on-year. In 2008, China Eastern Airlines consumed a total of 2.41 million tons of aviation fuel, a decline of 5 percent. In 2008, aircraft fuel expenses accounted for 43 percent of the company's operating expenses.
China Eastern Airlines becomes insolvent with a net liability of over 10 billion yuan
According to its annual report, by December 31, 2008, the total assets of China Eastern Airlines were 73.184 billion yuan, up 10 percent compared with the beginning of 2008. However, its liabilities stood at 84.249 billion yuan, up 33 percent year-on-year. This means that China Eastern Airlines has become insolvent, with net debt as high as 13 billion yuan.
To date, China has injected 7 billion yuan in capital funds into Air China. The Agricultural Bank of China has also decided to provide a comprehensive credit line of 15 billion yuan to China Eastern Airlines.
In addition, in 2007, the actual balance of China Eastern Airlines' hedging transactions in aviation fuel was at a profit of around 120 million yuan, but by the end of 2008, the figure had become a loss of 8.58 million yuan.
By People's Daily Online
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