Exchange Loss Weighs on Airline Companies

Source: China Business News, ChinaScope Financial (Data)

+       According to Civil Aviation Administration of China, total profit of Chinese airline companies stood at CNY 5.83 billion in August, down 17 percent year-on-year and lower than CNY 6.4 billion in July.

+       Analysts pointed out that exchange loss is the main reason for profit decline in airline companies. In August, the exchange loss in the airline industry reached CNY 560 million, a turnaround from an exchange gain of CNY 1.48 billion in the same period last year.

+       In August, the CNY exchange rate against USD depreciated 0.205 percent. The depreciation cumulated to 0.39 percent in the first half of this year.

+       Currently, USD is the major currency used for aircraft purchase in the world, so the largest portion of Chinese airline companies’ debts are settled in USD.

Driven by higher passenger traffic growth, transport turnover in the airline industry recovered some over the summer.

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