China Eastern Airlines Corporation Limited

For Immediate Release
29 August 1997

China Eastern Airlines Corporation Limited announced today its results for the first half of 1997. For the six months ended June 30, 1997, total income amounted to RMB 3.962 billion (USD 477.9 million), an increase of 19.6% or RMB 649 million (USD 78.3 million) compared to the same period last year. Profit after taxation and minority interests for the Company is RMB 306 million (USD 36.9 million) for the period ended June 30, 1997, representing a 18.9% increase compared to same period 1996.

Listed on the Hong Kong Stock Exchange and the New York Stock Exchange in February 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 June 30, 1997, the Company operated 115 routes, 100 of which were domestic routes (including 12 Hong Kong routes) and 15 were international routes. The scheduled flights operated per week were 1218 covering 45 domestic and international cities. The company's fleet has 66 aircraft, including 43 jet passenger aircraft with over 100 seats and one jet cargo aircraft.

China Eastern Airlines continued to enjoy steady growth during the period under review. Total turnover in traffic achieved was 575 million tonne-kilometers, a rise of 12.4% compared to the same period last year. The average daily utilisation rate was 6.8 hours, an improvement of 0.3 hour compared to the same period last year. Total revenues generated by passenger traffic amounted to RMB 3.185 billion (USD 384.2 million), an increase of 19.0% compared to the same period last year, accounting for 80.4% of the total income of the Company. The passenger traffic volume was 4.472 billion passenger-kilometers, representing an increase of 14.5% compared to the same period last year.

A total of 1.823 billion passenger-kilometers in domestic passenger traffic was recorded, an increase of 2.2% compared to the same period last year. An income of RMB 1.294 billion (USD 156.1 million) was generated, representing an increase of 11.0% compared to the same period last year and accounting for 40.6% of total revenues generated by passenger traffic. 774 million passenger-kilometers were recorded for Hong Kong routes, a rise of 13.6% compared to the same period last year. An income of RMB 961 million (USD 115.9 million) was generated, representing an increase of 22.4% compared to the same period last year and accounting for 30.2% of total revenues generated by passenger traffic. International passenger traffic was 1.875 billion passenger-kilometers, up 30.3% compared to the same period last year. An income of RMB 930 million (USD 112.2 million) was generated, representing a rise of 28.4% compared to the same period in 1996 and accounting for 29.2% of total revenues generated by passenger traffic. The volume of cargo traffic was 180 million tonne-kilometers, up 8.5% compared to the same period last year. An income of RMB 613 million (USD 73.9 million) was generated, representing a rise of 18% compared to the same period in 1996 and accounting for 15.5% of the gross income of the Company.

According to the Company, the passenger yield of domestic flights increased 8.6% as a result of the raise in domestic airfares in the second half of 1996. The Company continued to focus on the development of domestic routes and established several new routes with promising market potential. The Hong Kong routes also benefited from the raise in airfares in passenger yield. The Company strengthened sales cooperation with Cathay Pacific and China Airlines, while joining the largest computer reservation system in South East Asia, ABACUS, to increase sales for the Hong Kong routes.

The main reason contributing to the increase in the volume and revenues of international passenger traffic was the increase in the Company's passenger transportation capacity. During the second half of 1996, the Company started new routes to Munich, Sydney, and Pusan, which resulted in a rise of 52.3% in its passenger transportation capacity. The expansion of international operations provides a new source of customers as well as increases the foreign exchange income of the Company, thereby reducing its risks in relation to foreign exchange.

The rise in the volume of and revenues generated by cargo traffic was attributable to the growth in both cargo traffic capacity and cargo yield. The Company's cargo traffic capacity grew by 9.6% during the period under review. Changes in international cargo routes and improvements in airflight charges of the Hong Kong routes for cargo traffic contributed to the rise in cargo yield.

The total operating cost of the Company for the period under review was RMB 3.154 billion (USD380.4 million), an increase of 18.5% compared to last year. The increase in cost was attributable to the addition of new aircrafts and the rise in amortisation costs as a result of a higher valuation of the Company's assets and the increase in fuel price. The Company will implement effective measures in future to further reduce its operating costs.

The national economy of China is set for continued growth in second half of the year. In anticipation of further growth in both domestic and international aviation markets, the Company established the Shanghai-Beijing-San Francisco route on July 16, 1997 and resumed cargo flights to the United States (Shanghai-Los Angeles). After the handover of Hong Kong to China, passenger and cargo traffic between Hong Kong and other regions in China as well as between China and overseas destinations via Hong Kong will continue to grow. The yield of domestic routes is also expected to increase as CAAC further adjusted the airfares of domestic flights on July 1, 1997.

The Company plans to take delivery of three MD-90 aircraft in the second half of 1997 to further expand its capacity. Under the prerequisites of safety and quality service, the Company will increase its aircraft utilization rate by improving the efficiency of aircraft maintenance and shorten the grounding time of aircraft. The commencement of 6 new domestic routes since July 1997, including the Shanghai-Chongqing and Shanghai-Chengdu routes, is expected to enhance the Company's domestic revenues. To enhance competitiveness, expand market share and increase sales, the Company plans to refine its multi-class reservation system and strengthen flight management and control to facilitate the coordination between domestic and international operations.

Certain statements in this press release are forward-looking statements which involve risks and uncertainties. Potential risks and uncertainties include general economic conditions in the Company's markets, which are primarily China (including Hong Kong). Southeast Asia, Europe and the United States; the Company's ability to expand capacity and increase the utilization rate of its aircraft, the Company's ability to adjust its domestic route structure to enhance the performance of its domestic operations, the Company's ability to expand its market share in the highly competitive markets for aviation services; the Company's ability to reduce its costs of operations, and the extent and pace of growth in passenger and cargo traffic in the markets that the Company operates. Additional information concerning these and other factors that could cause actual results to materially differ from forward-looking statements are contained in the Company's Form 6-K relating to this press release furnished to the United States Securities and Exchange Commission.

Issued by:	China Eastern Airlines Corporation Limited
Through:	Keith Statham Associates PR
Contact:	Philip Hui Tel: 2810 8108 Fax: 2868 4116

© Copyright 1996-2008 irasia.com Ltd. All rights reserved.

DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any information provided on this website. Under no circumstances shall irasia.com Ltd be liable for damages resulting from the use of the information provided on this website. TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website.