Airline News
Rumour: Air China – China Southern merger; Big Three predict record Q3 profits
October 23rd 2015
Shares of Mainland flag carrier Air China and the country’s largest carrier, China Southern Airlines, gained more than 8% Thursday after rumours suggested the two state-owned carriers might merge. Read More »
An unofficial source said a related department was considering merging and restructuring Air China and China Southern, cnstock.com reported Wednesday night, citing China is continuing to reform government-controlled businesses to improve their competitiveness in the international market. If realized, the merged carriers would become the largest operator in the world, both in terms of fleet (if future orders were included) and available seats.
China’s Big Three have all predicted significant profit boosts in the first nine months through to September 30 on the back of robust market demand and low fuel prices.
Air China said it would post a net income of 6.1-6.3 billion yuan ($961-992 million), up 92%-100% over a net income of 3.16 billion in the year-ago period. China Eastern Airlines said it expected to earn a net income of 5.2-5.4 billion yuan for the first nine months of the year, up 153%-162% over net income of 2.058 billion in the corresponding year-ago period. China Southern has forecasted earnings of 4.6-4.8 billion yuan, up 266% to 282% over a net profit of 1.257 billion in the same period last year.
However, it is noteworthy the Big Three experienced a profit decline in the third quarter, which analysts said was due to the yuan depreciation against the greenback.
