Chinese airlines strained by oil prices

Chinese airlines are expected to sustain an aggregated loss of more than 3 billion yuan (US$375 million) for the first half of the year despite the brisk market demand, according to the General Administration of Civil Aviation.

A source close to a recent meeting of the administration attributed the loss, which is more than seven times over the same period of last year, to the surging oil prices that lifted up operation costs and offset the brisk market demand.
Director Yang Yuanyuan of the administration said that the economic situation faced by China’s civil aviation sector in the past half year was “a mixture of joy and anxiety.”

“On the one hand, airlines’ operation scale kept expanding and activated the market demand while on the other, competition became fierce along with rising operation cost, which has put higher pressure on airlines seeking for both safety and profit,” Yang was quoted as saying.

China Daily