Nation's big three airlines report huge profits

China's three largest airlines reported hefty quarterly profits, with China Eastern witnessing the biggest jump, attributed it to a rebound in air-travel demand. However, experts warn that the Beijing-Shanghai bullet train, which is expected to be operational next year, may reduce passenger flow and therefore cut carrier revenues.

Net income at Air China, the nation's largest international carrier, jumped nearly fivefold to 5.2 billion yuan ($773.23 million) in the third quarter.

China Southern, the biggest domestic carrier, said third-quarter profits surged almost 10-fold, as the Guangzhou-based carrier's net income increased to 3.04 billion yuan ($452.04 million) from 284 million yuan ($42.23 million) in 2009.

Shanghai-Based China Eastern, which received a huge boost from the Shanghai Expo, said profits surged more than 130-fold to 3.15 billion yuan ($468.40 million), and the company boosted passenger numbers 52 percent to 18.4 million in the first nine months of this year.

The 2010 Shanghai World Expo, which closed yesterday, received more than 70 million visitors, according to the official website of the exhibition that opened May 1.

Airlines all attributed their strong performance to the third quarter's traditional peak travel season, as well as a stronger yuan.

Yao Jun, an industry analyst with China Merchants Bank, warned that the planned high-speed rail link may reduce aviation travel numbers.

According to the Ministry of Railways, the train is expected to cut the travel time between the two cities to within four hours, about twice the time needed by plane. The rail link is forecast to carry some 160 million passengers per year.

"It will definitely impact aviation passenger flow," Yao Sunday told the Global Times.

Source: Global Times