Shanghai Airlines (SHA: 600591) lost 1.249 billion yuan last year, according to its annual report released today, representing a loss per share of 1.155 yuan. The airline lost 435.12 billion yuan in 2007 and after two consecutive years of losses will be tagged as at risk of delisting by the Shanghai Stock Exchange. Its stock name will be flagged with "*ST" on computer screens.
According to the report, Shanghai Airlines' annual operating turnover reached 13.373 billion yuan, up 8.63 percent year on year. But it was not enough to put the company into the black.
Air transport demand shrank in the second half of 2008 due to the economic downturn, while fuel costs soared to double 2007 levels. With the May 12 Sichuan earthquake also depressing demand, operating losses mounted to 1.445 billion yuan.
The airline's operating earnings from passenger transport and cargo and mail transport were 8.22 billion yuan and 2.138 billion yuan respectively, a year-on-year increase of 8.85 percent and 10.05 percent. But operating costs grew faster – up 21.61 percent year on year to 10.333 billion yuan. The operating rate of profit was 0.24 percent, down 10.27 percent.
The report said Shanghai Airlines subsidiary Shanghai Airlines Cargo International lost 263 million yuan last year.
Shanghai Airlines said it hoped to return to profitability in 2009. It is also planning a private placement of shares to raise cash. The preliminary plan for the placement was released on February 26, 2009.
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(China.org.cn March 25, 2009)