CHINA EASTERN AIR QUICKENS GROWTH TO 10% ON OVERSEAS TRAVEL

Photograph: Nelson Ching/Bloomberg

Shanghai,China : China Eastern Airlines Corp. (670), the nation’s second-largest carrier by passengers, will accelerate capacity growth in the second half to 10 percent as it adds new planes and boosts international services.

Expansion will focus on overseas routes after a 19 percent increase in nationwide outbound passenger numbers in the first half, Zeng Yongchao, an executive vice president, said in an interview yesterday in Hong Kong. The Shanghai-based airline expanded passenger capacity 4.6 percent through June.

“We did pretty well in the traditional peak July and August,” Zeng said. He didn’t elaborate. The carrier rose as much as 2.2 percent in Hong Kong, the most in three weeks.

The airline has boosted international load factors 5 percentage points this year, compared with flat figures at Air China Ltd. (601111) and China Southern Airlines Co. (1055), because of a recovery in demand on Japan flights following last year’s earthquake, rising international leisure travel and an upgraded long-haul fleet, according to Jefferies Group Inc. The rise also helped the carrier post the smallest drop in first-half profit among the nation’s big three airlines.

“They can absorb the extra capacity,” said Kelvin Lau, a Hong Kong-based Daiwa Securities Group Inc. analyst. “Doing well in the peak summer is a positive sign.”

A320s, 737s

China Eastern will receive 21 new planes in the second half, Zeng said, which will include narrow-body Airbus SAS A320s, Boeing Co. 737, as well as twin-aisle A330s. Its growth plans in the period are “slightly higher” than Air China’s and China Southern’s, Lau said.

04/09/2012  :  Jasmine Wang / Bloomberg Business Week.

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