国内英语新闻:Air China expects to fly into its first annual loss

BEIJING, Jan. 19 -- Air China Ltd, the nation's largest international carrier, expects to report its first annual loss in at least eight years on waning travel demand and wrong-way bets on fuel prices.

    The carrier made paper losses of 6.8 billion yuan (994.5 million U.S. dollars) on fuel-hedging in 2008, it said on Friday in a Hong Kong stock exchange statement. The airline made a 3.88-billion-yuan annual profit in 2007.

    Air China joins China Southern Airlines Co and China Eastern Airlines Corp in forecasting a 2008 loss after the nation's cooling economy damped business and leisure travel. The Beijing-based carrier also reported hedging losses after jet-fuel prices tumbled 70 percent in less than six months.

    "Air China is more exposed to the global crisis" than China Southern and China Eastern, said Li Jun, an Everbright Securities Co analyst in Shanghai. "As such, most of its advantages turned into disadvantages last year."

    The carrier has been profitable since at least 2000, data complied by Bloomberg News showed, helped by having a wider overseas network than domestic rivals.

    "The aviation market experienced a general shrinking demand in 2008 and traffic revenue was significantly lower than expected," the Beijing-based company said in the statement. The hedging contracts "will have a considerable effect on the financial results for the year."

    The airline is also able to hedge a greater proportion of its fuel needs than rivals, as Chinese carriers are barred from hedging purchases of fuels for domestic flights. That has previously enabled Air China to limit the effect of increasing fuel prices.

    The airline's passenger numbers fell 1.7 percent in 2008 to 34.2 million, the first decline in five years. Its cargo and mail volume dropped 3.8 percent to 898,962 tons.

    The shares have dived 80 percent in the past year and closed 3.9 percent higher at 1.88 Hong Kong dollars (24 U.S. cents) a share on Friday in Hong Kong trading.