China’s largest carrier by fleet size posted a disappointing 2018 net profit, tumbling by more than a half.
China Southern Airlines’ net profit declined by 51% to $430 million with the company blaming high fuel costs and intense competition.
Weak currency fueled by the US-China trade war also impacted the bottom line.
Revenue rose by 12.38% but that was mostly wiped out due to ballooning operating costs which were up by 21%.
The airline points to increasing competition coming from China’s rapidly expanding high-speed rail network.
This will add to an already highly competitive domestic market where a growing number of low cost carriers are grabbing a bigger share of the spoils.
About 90% of China Southern’s network is domestic routes, and domestic flight bookings generate about three-quarters of the company’s overall revenue.
