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China Eastern reports steep full-year net loss

By Wang Ying (China Daily)
Updated: 2009-04-17 07:59

City-based carrier China Eastern has reported a net loss of 13.93 billion yuan for 2008, a steep drop over 2007, when it had made a net profit of 604 million.

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The company has attributed the huge loss to several factors, including falling passenger demand due to the financial crisis, wrong bets on fuel hedging contracts, soaring operating costs associated with dropping seat kilometer utilization, and provisioning for the declining value of corporate assets.

"The airliner will soon be capped with an 'ST' (special treatment) tag on the bourse because of its losses in 2008, and its daily trading limit will narrow to 5 percent," said Zhang Xun, an analyst with TX Investment Consulting.

According to its annual report, China Eastern's total debt reached 84.249 billion yuan, while its assets position was unchanged at 73.184 billion yuan as of Dec 31, 2008. This means there is a deficit of 11.065 billion yuan. Theoretically speaking, the airliner faces bankruptcy risk... 

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