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Reporters' Log

Air China requesting government cash injection

By (Agencies)
Updated: 2009-03-04 14:12

Air China's Chairman Kong Dong said on Wednesday the airline can be profitable in 2009, but has asked the government for a cash injection of at least 3 billion yuan ($439 million).

Related readings:  Air China reports $454m of fuel hedging loss by October  Air China's third quarter loss hits 1.94b yuan  Air China, battling falling demand, puts M&A aside  Air China H1 net profit down 1.38%

Air China, China Eastern Airlines and China Southern Airlines, the country's three biggest carriers, have all warned of losses for 2008, the worst year since SARS (Severe Acute Respiratory Syndrome) struck the industry in 2003.

The company has submitted a request for a government cash injection and expects to get at least as much as the 3 billion yuan expected by rival China Southern, Kong told reporters on the sidelines of the annual session of the Chinese People's Political Consultative Conference (CPPCC).

"We definitely want a government cash injection as the whole industry is suffering losses now," Kong said.

The comments come just two days after Kong told reporters in an interview that he was not certain the company could turn a profit in 2009 as passenger traffic declines along with cargo volumes.

However, Kong said the beginning of 2009 was showing an improvement. The airline expected double-digit growth in revenues in the first two months of 2009 over a year earlier.

Shares of Air China were up 4 percent at HK$2.08 in Hong Kong on Wednesday, outpacing the 3.03 percent rise in the index for major mainland companies listed in Hong Kong.

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