FOR IMMEDIATE RELEASE
25 August 1999
China Eastern Airlines Corporation Limited ("Eastern Airlines" or the "Company") announced today its 1999 interim results. For the six months ended 30 June 1999, turnover of the Company amounted to RMB4.715 billion, representing a 23.8% growth compared to the same period in 1998. The Company recorded a profit of RMB64.28 million for the period.
The Company's traffic volume increased 20.98% to 811 million tonne-kilometers over the same period in 1998. Average aircraft daily utilisation was 7.4 hours, which compared closely to the same period in 1998. Passenger traffic volume increased by 20.83% to 6.111 billion passenger-kilometers. Total revenues from passenger traffic grew 23.39% to RMB3.757 billion, year-on-year, and represented 79.68% of the Company's total revenue for the period. The growth in passenger transport is mainly attributable to the development of the North China market.
Domestic passenger traffic volume during the period reached 2.607 billion passenger-kilometres, an increase of 10.36% comparing with the same period last year. Domestic passenger revenue amounted to RMB1.87 billion, representing growth of 28.15%, year-on-year, and 49.76% of the Company's total revenue for the period.
Passenger traffic volume for Hong Kong routes reached 877 million passenger-kilometres during the period, an increase of 34.63% comparing with the same period last year. Passenger revenue from the Hong Kong routes amounted to RMB845 million, representing growth of 15.24%, year-on-year, and 22.48% of the Company's total revenue for the period.
International passenger traffic volume was 2.627 billion passenger-kilometres, an increase of 28.52% comparing with the same period last year. International passenger revenue amounted to RMB1.043 billion, representing growth of 22.23%, year-on-year, and 27.76% of the Company's total revenue for the period.
Cargo revenues increased 29.33%, year-on-year, to RMB754 million, representing 15.99% of total revenues, with an increase in cargo traffic volume to 277 million tonne-kilometers, up 22.46% over the same period last year.
The Company made a foreign currency exchange gain of approximately RMB64.58 million in the first half of 1999, which was attributable primarily to the depreciation of Japanese Yen.
During the first half of 1999, the Company's operating costs reached RMB4.333 billion, an increase of 20.15% compared with the same period last year. Such increase was primarily due to increased take-off and landing charges following the commissioning of Hong Kong's new airport and the increase in international flights. Increases in depreciation charges and operating lease expenses resulting from the expansion of the Company's fleet and capacity also contributed to rising costs.
During the first half of 1999, the Asian economy began to stabilize while little improvements were seen in the problems of excess capacity, weak demand and intense competition in the Chinese domestic aviation market. In response, the Group adopted pro-active measures to reduce its transport capacity and less profitable flights, enlarge the scope of code sharing and enhance route cooperation. In line with changing market conditions, the Group added a route linking Shanghai with Fukushima, Japan and allocated more capacity to the routes to Korea and Southeast Asia. The Group also opened new cargo routes from Shanghai to Paris and from Shanghai to Xiamen, China.
Looking to the remainder of the year, the Company does not expect any significant increase in the demand in the Chinese domestic aviation market, although economies in the region is expected to gradually improve as the adverse impact of the Asian financial crisis diminishes. However, the CAAC's continued macro-control measures to contain the expansion of traffic capacity, standardise domestic airfares and enhance regulation of sales agents should help to improve the Company's operating environment.
In addition, the international economic and trade events held in Shanghai, such as Forum sponsored by Fortune, and other activities such as the celebration of the 50th anniversary of foundation of the Peoples' Republic of China, the return of Macao and the peak season for air traffic in the second half of 1999 will also go a long way uplifting the Company's operating revenue.
In light of the Company's current operating environment, the Company intends to intensify measures for improving its operations. It will rationalize its capacity allocation and optimize the route network. A more flexible marketing approach will be adopted to increase sales and cooperation with other air carriers on jointly operated routes will be enhanced. The promotion of the "Golden Swallow Club" frequent flyer program will remain a major focus. Strong efforts will be made to further develop the Company's air cargo market. Vigorous implementation of cost- control measures will continue.
Listed on the Hong Kong Stock Exchange and the New York Stock Exchange in February 1997, and on the Shanghai Stock Exchange in November 1997, China Eastern Airlines is one of the three largest air carriers in China and the primary air carrier serving Shanghai, China's eastern gateway. As of 30 June 1999, the Company operated a total of 132 routes, including 109 domestic routes (including 12 routes between mainland China and Hong Kong and one domestic cargo route) and 23 international routes (including 3 cargo routes). Over 1,700 scheduled flights were operated per week serving 68 domestic and international cities. As of 30 June 1999, the Group had a fleet of 73 aircraft, including 55 passenger jet aircraft with a capacity of over 100 seats each and one jet freighter.
|Issued by:||China Eastern Airlines Corporation Limited|
|Through:||Keith Statham Associates PR|
Tel: 2810 8108 Fax: 2905 1582
|Contact:||Philip Hui - dir. line 2801 0016|
Note: The full text of this release and the Company's formal announcement of interim results can be accessed through the Internet at: http://www.irasia.com/listco/hk/chinaeast
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