- Low crude prices, international capacity growth buoy earnings
- Profit in 2015 damped by 79 million yuan foreign-exchange loss
Spring Airlines Co., China’s largest low-cost carrier, reported a 44 percent gain in first-quarter profit as lower fuel prices and growth in Asian travel demand propelled earnings.
Net income climbed to 366.7 million yuan ($57 million) from 254.3 million yuan a year earlier, the Shanghai-based carrier said Thursday in an exchange filing. For the full year, net income rose 50 percent to 1.3 billion yuan in 2015, including a foreign-exchange loss of 79.1 million yuan, according to a separate company statement.
Crude oil prices fell more than 30 percent last year, helping lower fuel costs for carriers and boosting their earnings. Still, profit growth was tempered by foreign-exchange losses resulting from the yuan’s biggest decline since 1994, with the nation’s three biggest state-owned airlines recording a combined $2.5 billion loss from the Chinese government’s surprise currency devaluation last year.
Shares of Spring, set up in 2005, have gained fivefold since they started trading in January 2015, fueled by potential growth in Asia. Boeing Co. and Airbus Group NV have projected that the region will surpass the U.S. as the world’s biggest air-travel market in the next two decades.
The stock fell 1.2 percent to close at 46.38 yuan in Shanghai trading before the earnings release.
— With assistance by Clement Tan