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Shanghai Airline 2008 loss likely to double

Time:2010-06-07 17:48 Source:Cargonewsasia   Writer: Click:Times
Shanghai Airlines Co said its net loss in 2008 is likely to more than double from a year earlier, due to bad bets on fuel prices and weak demand in the local aviation market, Dow Jones reported.

The small Chinese carrier said its fair value loss from hedging fuel oil contracts totaled US$25 million) as of Dec. 31, and its cash loss in December from fuel contracts was US$1.2 million.

Shanghai Airlines posted a net loss of $63.6 million in 2007. It is scheduled to announce its 2008 results on April 30.

Domestic and international airlines tried to fend off soaring fuel costs by signing contracts locking in future prices, but many lost money when global oil prices plunged below $50 a barrel at the end of last year from about $150 a barrel in July.

Earlier this month, China Eastern Airlines Corp, the country's third-largest carrier by fleet size, reported a loss of $906 million on its fuel hedging contracts, and said it would post a "substantial" loss for the year as a result.

Fuel price volatility has also hurt Air China Ltd, which said in November its losses on fuel-hedging contracts widened to $453.4 million at the end of October, from around $438.7 million at the end of September.

Hong Kong airline Cathay Pacific Airways Ltd said in early January its fuel hedging losses widened to $980 million at the end of 2008 from $361.1 million at the end of October.

Analysts say 2009 will continue to be a challenging year for the airline industry, with the global financial crisis hurting travel demand.  





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Shanghai Airline 2008 loss likely to double



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