China Eastern Airlines says 1Q net profit down 81 percent

China Eastern Airlines: 1Q net profit down 81 pct

SHANGHAI — China Eastern Airlines said Tuesday that its net profit fell 81 percent in the first quarter from the same period a year earlier as passenger traffic fell amid the economic slowdown.

The 40.1 million yuan ($5.9 million) net profit in January-March compared with 210.8 million yuan earnings in the first quarter of 2008.

Revenues fell to 8.95 billion yuan ($1.3 billion) from 10.6 billion yuan in first-quarter 2008.

The Shanghai-based carrier’s return to profits after last year’s heavy losses was unexpected. But gains in revalued fuel hedging contracts helped reduce damage from wrong-way bets on fuel prices.

China Eastern said it recorded revaluation gains of 422 million yuan ($61.7 million) in fuel hedging contracts as oil prices advanced.

The Chinese government has injected 7 billion yuan ($1.02 billion) into China Eastern, and billions more into other carriers, to help tide them through the financial crisis.

Regulators also put aviation industry veteran Liu Shaoyong in charge of revitalizing the company and improving its competitiveness.