SHANGHAI, Apr 29 (Reuters) China's Hainan Airlines Co. Ltd., partly owned by billionaire financier George Soros, saw its net profits fall 11.7 percent in the first quarter as higher fuel prices squeezed margins.
The Chinese carrier, based in the sun-drenched southern resort island of Hainan, booked a net profit of 12.09 million yuan from January through March, versus a net profit of 13.69 million yuan a year earlier, it said in a statement carried in the official Shanghai Securities News on Saturday.
For the full year 2005, it swung to a net loss of 215.82 million yuan from a net profit of 90.65 million yuan a year earlier, far lagging a forecast given by the chairman of the listed company's parent earlier this year.
Chairman Chen Feng had told Reuters that he expected 2005 earnings to come at between $10 million and $12 million. If not for a soaring fuel bill, it could hit $40 million, he added.
Hainan Air, mainland China's number-four carrier, mainly flies to domestic destinations, but has expanded its network to include Bangkok, Kuala Lumpur, Osaka and Budapest.
Other Chinese airlines, such as China Eastern Airlines Ltd., have also fallen victim to high oil prices.
Hainan, which plans to change its name to Grand China Air after absorbing three smaller rivals, expects to list its shares in Hong Kong at some point in 2007 at the latest, Chen said in February.
Grand China Air has raised $420 million in an initial private placement and share sale, and is hoping to raise another $250 million.
Hainan Air's yuan-denominated A shares -- open to select foreign investors -- rose more than 9 percent in the first quarter, slightly underperforming the market's 12 percent gain.
($1=8.014 yuan) REUTERS PV SSC1347