Last year, the civil aviation industry saw a 13.9% YoY decline in net profit and a 40% increase in jet fuel costs.

Expenditure on jet fuel costs increased by nearly 40% year-on-year. Three major aviation companies plan to restart aviation fuel hedging. The Civil Aviation Administration of China issued an industry development statistics announcement yesterday. Last year, the total profits of the civil aviation industry totaled 36.3 billion yuan, a year-on-year decrease of 13.9%. Among them, the total profit of airlines was 27.8 billion yuan, a year-on-year decrease of 17.7%. The Big Three annual report shows that due to the soaring of international jet fuel prices last year, jet fuel costs increased by nearly 40% year-on-year, accounting for 40% of the total cost.

The three major airlines are "prudent" to treat aviation fuel hedging. "The three major airlines are applying for the restart of aviation oil hedging business." Eastern Airlines officials said that in the context of high oil prices, the global airlines are doing aviation oil Bao, but the three major aviation is very cautious about this, to ensure that the purpose of aviation oil hedging is to lock in costs, rather than profit from it.

Previously, due to Air China’s and China Eastern’s aviation fuel oil losses reaching several billion yuan, on March 24, 2009, the SASAC issued a notice ordering central enterprises to prudently use financial derivatives and not engage in complicated and difficult-to-understand risks. Business and prohibit any form of speculative trading.

For most of the past year, Air China and China Eastern Airlines have failed to hedge against the soaring oil price.

According to the annual report of Air China, in 2011, the cost of jet fuel increased by 10.326 billion yuan over the same period of last year, an increase of 44.01%, which exceeded the net profit of 7.477 billion yuan in one year.

Affected by the continuous increase in the price of jet fuel, the net profit of the three major airlines in the first quarter of this year dropped by around 70% year-on-year. Although a number of domestic airlines raised their fuel surcharges on domestic routes, they have now risen to the highest level in history, but surcharges can only cover part of the rise in the cost of rising oil prices. Li Jiaxiang, director of the Civil Aviation Administration, said that China has become the world’s second largest consumer of jet fuel.

After the high-end passengers at the Expo reduced their oil prices, in addition to the huge drop in profits of China’s civil aviation industry last year, there was also the “post-Expo effect”.

In 2010, China’s civil aviation industry achieved a total profit of 43.7 billion yuan, which was the best in history, as the Chinese economy maintained rapid growth and the Shanghai World Expo brought a lot of passenger traffic. Among them, the total profit of the airline companies was 35.1 billion yuan, accounting for 60% of the total profits of the global airlines.

“The current overall level of fare decline is serious.” According to insiders of Eastern Airlines, another major reason for the drop in net profit of China’s airlines last year was the impact of the downturn in the global economic cycle. The demand for the Chinese civil aviation market has contracted, especially for high-end business travelers. The passenger volume of the entire market is growing, but the shortage of high-end customers in the first class and business class leads to a reduction in the overall fare level, which together with high oil prices squeezes the profit margin of aviation companies.

The statistics released by the Civil Aviation Bureau yesterday showed that the number of passengers transported by the industry was 293.17 million passengers last year, an increase of 9.5% over the previous year. In 2011, Beijing Capital Airport completed a passenger throughput of 79 million passengers.

“Although the market demand is slowing down, the speed of the introduction of the fleet has not slowed down.” The source said that the airline’s plan to introduce aircraft was already established a few years ago, which further increased the fixed costs of the airlines. As of the end of 2011, the total number of civil aviation transport aircraft at the end of the year stood at 1,764, an increase of 167 from the previous year.

- Hot spots last year, the normal rate of 77.2%

According to a communique issued by the Civil Aviation Administration yesterday, the normal flight rate of airlines in 2011 was 77.2%, which was less than 2 percentage points higher than the normal rate of 75.8% of China’s civil aviation flights in 2010.

Regarding the classification of reasons for the abnormal flight, the bulletin said that the airline itself accounted for 37.1% of its causes, the highest proportion. In spite of a slight increase in the normal flight rate last year, the airspace is still relatively tight due to the large increase in the number of flights, which is still lower than in previous years. Prior to this, from 2005 to 2009, the normal rate of civil aviation flights in China was above 80%.

In addition, the Civil Aviation Administration stated that it handled a total of 2,018 aviation consumer complaints last year. The total number of complaints received increased by 684, an increase of 51.27% over the previous year, and the number of effective complaints increased by 100 over the previous year, an increase of 41.15%.

Causes of Flight Abnormalities in 2011 Classification Statistics Major Airline Flight Abnormal Causes Indicators Take Up All Proportions

Flow control 27.5%-0.1%

Weather reasons 20.0% 0.5%

Other 15.4% 3.6%

The proportion of indicators of abnormal flights of small and medium-sized airlines accounted for 45.1%-2.8% of the airline’s own reasons in the previous year.

Flow control 25.2%-0.4%

Weather reasons 18.5% 0.5%

11.2% other 2.7%