Guangzhou Baiyun airport

The expansion plan for the Guangzhou Baiyun International Airport has been approved by the National Development and Reform Commission (NDRC).

Guangzhou Baiyun will construct a third runway and another terminal, which will involve a total investment of RMB 14.036 billion, but the company did not reveal the exact date of construction.

The airport targets to handle 40 million people by 2010. Last year, Guangzhou Baiyun handled 30,958,467 people, making it the second busiest airport in mainland China in terms of passenger traffic.

Guangzhou Baiyun International Airport is one of the three largest air hubs in China and the main hub of China Southern Airlines.
Source: China Knowledge

Shanghai Airlines crew

Shanghai Airlines flew into the black in the first half of this year on rising traffic and a government subsidy.

Its net income was RMB23.41 million ($3.41 million), or RMB0.022 a share, in the six months against a loss of RMB134.51 million a year earlier. Its revenue grew 26% to RMB7.03 billion.

It attributed the growth to booming traffic during the period. The Shanghai-based carrier flew 4.88 million passengers in the first half, a rise of 14.07% from a year earlier, and it carried 8.9% more cargo at 1.66 million tons.

Tao Wei, an analyst with China International Capital, said, ‘The carrier’s profit is better than our expectations in the first half, but its load factor on international routes was only 60%, much lower than the average.’

The carrier also started flying on eight new routes in the first six months, including chartered flights from Shanghai Pudong International Airport to Songshan Airport in Taiwan.
Source: China View

China Southern Airlines

Liu Shaoyong, the chairman of China Southern Airlines said the outlook for the carrier is bleak, following a difficult first half of 2008.

He said that airlines are ‘generally saddled with three major burdens, including insufficient market demand, fierce competition and high oil prices. . . . As such, the group expects to undergo a long period of hardship.’

This year China Southern’s shares have fallen 81% making it the worst performing company in the Shanghai CSI 300 Index.

Luckily, the renminbi appreciated against the US dollar in the first half of 2008 by 6.6% — delivering the carrier a $384 million foreign currency gain.
Source: eTravel Blackboard

Beijing airport security

Beijing Capital International Airport is seeing record flights and passenger numbers during this Olympic month.

However, before anybody dances in the streets from this new record activity, BCIA needs to come to terms with the sharp decline in airport business during the first half year operation in 2008.

On July 31, ten days before the Olympics, BCIA issued a profit warning for its 2008 interim results on falling demand and rising costs.

Net profits for the six months of 2008, may fall significantly from the RMB567 million ($83.4 million) in the first half of 2007.

From August 2007 to March 2008, out of security concern for the Olympic Games, CAAC imposed limitation on flight throughput of the airport, from
1,100 flights per day to 1,000 flights, resulting in a less than expected passenger volume.

Meanwhile, the introduction of the Third Terminal drove operating costs upward.

For the second half of 2008 better performance is projected compared to the
same period last year as the limitations on flight throughput are lifted.
Source: Air Cargo News

Cathay Pacific’s interim result does not make for encouraging reading. Operating profit margin dropped into negative territory in the first half of 2008, compared to a double-digit margin in the full year of 2007.

Cathay’s earnings report stated the big change in the company’s financial performance ‘was entirely due to the relentless rise in the cost of jet fuel in recent months’. Cathay’s non-fuel unit costs also rose 2.4%.

Overall, the airline’s cost base, including fuel, ballooned by a third, against a 22.6% revenue increase.

Cathay’s total fuel bill rose 94% in the first half year-on-year, due to reduced hedging benefits and the airline’s double-digit capacity increases.

Fuel now accounts for 45.3% of total costs.

Chairman Christopher Pratt said, ‘It is inevitable that fares for passengers and shippers will have to rise to reflect the new cost of operation.’
He added that ‘it is difficult to forecast with any degree of accuracy the extent to which these higher fares will reduce demand, but thus far it has remained robust.’
Source: Centre for Pacific Education