Air China, the nation's largest international air carrier, announced on Wednesday it is expecting a 20-fold increase in first-half net profits over the same period last year.

 

The company said in a statement to the Shanghai Stock Exchange that the huge increase was mainly due to strong market demand, the appreciating yuan and higher investment earnings.

 

Its net profit in the first half last year was 45 million yuan, or 0.005 yuan per share on 9.43 billion shares.

 

Total shares had expanded to 12.25 billion with the issuance of A shares on the Shanghai Stock Exchange in August last year and H shares to Cathay Pacific in September.

 

The appreciation of China's currency, the yuan, had helped to shrink large US-dollar-denominated debts of Chinese airlines, according to the China International Capital Corporation.

 

Chinese airlines started to report huge rises in net profits this year after record oil prices resulted in low profits or even losses last year.

 

The airlines earned 1.54 billion yuan (US$205 million) in net profits in the first six months, compared with losses of 1.99 billion yuan (US$265 million) in the same period last year.

 

China Eastern Airlines, the country's third largest, announced on Monday it would likely report a profit for the first half, compared with last year's first half loss of 1.4 billion yuan (US$186 million).

 

China's expanding middle class are flying more both at home and abroad, helping to push up airline profits.

 

Chinese airlines carried 86.7 million passengers in the first half, up 16.7 percent from the previous year, according to the General Administration of Civil Aviation. It predicted the airlines would carry a total 185 million passengers this year, 17 percent more than last year's total.

 

(Xinhua News Agency July 26, 2007)