June 3, 2008 / 11:00 AM / 11 years ago

UPDATE 1-China airlines to trim loss-making long-haul flights

(Adds newspaper report on China Southern, comment from Air China)

SHANGHAI, June 3 (Reuters) - Two of China’s major airlines plan to cut back flights on certain loss-making long-haul international routes to reduce costs as they confront high oil prices, an airline executive and state media said on Tuesday.

China Eastern Airlines Corp Ltd (600115.SS) (0670.HK) will cut back flights on some loss-making international routes but will execute the plan gradually to avoid significant reductions on any individual routes, an executive with the carrier told Reuters.

“Demand on some long-haul international routes has been weak and it is difficult not to lose money,” said the executive, who asked not to be identified. He gave no details.

China Eastern operates 467 air routes, including 98 international routes, with 6,275 regular flights weekly, according its 2007 financial report.

China Southern Airlines Co (1055.HK) (600029.SS) will cut services on more than 20 international routes, including flights to Los Angeles, Paris and Singapore, the official Shanghai Securities News said, citing a source close to the carrier.

The paper did not say whether the adjustments, starting next month, would be seasonal or permanent.

No comment was immediately available from China Southern.

Chinese airlines have been losing money on several long-haul routes due to a lack of global networks and inadequate cost controls, compounded by surging oil prices, analysts said.

A senior executive with Air China Ltd (601111.SS) (0753.HK), the country’s flag carrier, told Reuters his company had no plans to cut international services at this time. (Reporting by Fang Yan; Editing by Edmund Klamann)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below