Shanghai Airlines predicts loss for 2007

Passengers book tickets for direct flights between Chinese mainland and Taiwan at a Shanghai Airlines office in Shanghai, January 19, 2005. Shanghai Airlines, a Chinese regional carrier, predicted on Tuesday that it would post a loss for 2007, deteriorating from a net profit of 8.2 million yuan ($1.1 million) in 2006.

SHANGHAI (Reuters) - Shanghai Airlines 600591.SS, a Chinese regional carrier, predicted on Tuesday that it would post a loss for 2007, deteriorating from a net profit of 8.2 million yuan ($1.1 million) in 2006.

The airline posted a loss of 134.5 million yuan in the first half of last year, but said at the time that earnings were improving and a full-year profit was very likely.

Shanghai Airlines said on Tuesday that earnings were hit by high oil prices, while it had not yet managed to make its new international flights fully profitable, and the setting up of a cargo subsidiary drained money. It did not elaborate.

The airline is expected to announce 2007 earnings after several weeks. Listed Chinese companies are required to make preliminary statements about their earnings if they expect to report large swings.

($1 = 7.24 yuan)

(Reporting by Andrew Torchia; Editing by Anne Marie Roantree)