15-Apr-2010 10:07 AM

Air China management discussion of Mar-2010 operating data

Direct News Source

Passenger capacity, measured in Available Seat Kilometers (ASK), grew 11.2% year-over-year. Passenger traffic, measured by Revenue Passenger Kilometers (RPK), saw 20.8% growth in March. Capacity on international routes increased by 7.4% year-over-year, while RPK grew by 24.6%. Capacity on domestic and regional routes increased by 13.2% and 16.6% year-over-year, respectively, with RPK up 18.3% and 25%, respectively. The passenger load factor was 80.5%, up 6.4% year-over-year. The passenger load factor for international, domestic and regional routes increased by 11.7, 3.4 and 4.8 percentage points, respectively, to 84.6%, 78.5% and 72.1%, respectively. (Please note these figures do not include Air Macau.)

The recovery of the airline industry accelerated in March 2010. Air China saw high year-over-year passenger traffic growth on all international, domestic and regional routes.

International and domestic routes also showed an increase in passenger traffic compared to the previous month. There was a continuation of solid year-over-year growth in cargo traffic and, for the first time this year, cargo traffic exhibited an across-the-board month-over-month increase, with an especially strong performance from the international and regional cargo business, which showed significant traffic and load factor improvement.

Cargo capacity, measured in Available Freighter Tonne Kilometres (AFTK), increased by 17.3% year-over-year. Freighter tonnage carried, and Revenue Freighter Tonne Kilometres (RFTK) grew by 32.5% and 42.3%, respectively, compared with March 2009. The cargo load factor improved to 62.9%, an increase of 11.1 percentage points year-over-year. The growth in the cargo business was driven mainly by the recovery in international routes.

Effective March 28, the Company launched its daily Chengdu-Shanghai Pudong-Nagoya route. The Beijing-Manila route was launched on March 29, with three flights per week. The Summer-Autumn flight schedule became effective on March 28, with the addition of a number of new routes, namely Beijing-Ulanhot, Tianjin-Changsha-Kunming, Tianjin-Kunming, Chongqing-Tianjin-Dalian, Hangzhou-Qingdao-Harbin, Chengdu-Tengchong, and Wuhan-Hohhot-Hailar.

On March 16, Air China's first A330-300 aircraft with Premium Economy Class came into service. The Company's Premium Economy Class provides more leg space and a wider variety of interactive audio-visual entertainment options for passengers. The first group of A330-300 aircraft with Premium Economy Class will mainly serve domestic business routes, such as Beijing-Shanghai, Beijing-Guangzhou.

In March, the Company's average jet fuel purchase price at international airports was RMB4,826 per tonne, and the average purchase price of jet fuel for international flights at the top six Chinese airports was RMB5,055 per tonne, representing 52% and 41% year-over-year increases, respectively. The Company's average jet fuel purchase price for domestic flights was RMB5,639 per tonne, an increase of 32% compared with March last year.

Air China purchased a total of 287,200 tonnes of jet fuel during the month at an average price of RMB5,316 per tonne, a year-over-year increase of 38%.

In March, the Company made the following adjustments to jet fuel surcharges:

Effective Date (Based on Ticket Issue Date)	Route	Previous Rate (Per Head Per Sector)	New Rate (Per Head Per Sector)
March 1	Hong Kong to Mainland China	HK$78	HK$84
	Mainland China to Hong Kong	RMB69	RMB74
	North Korea to Mainland China	US$18	US$22

During the month, the Company added two new aircraft, namely one A321 and one A330, and retired one B757-200. As of March 31, Air China operated a fleet of 269 aircraft.