China Southern profit takes off and soars

China Southern Airlines, China’s biggest carrier, said its third quarter net profit rose 49% to RMB1.88 billion from a year ago as rapid economic growth on the mainland boosted demand for travel.

It will acquire 10 new aircraft by 2010 as part of its plan to expand its overseas routes.

The airline carried 42.7 million passengers in the first nine months of this year, 15.5% more than the same period in 2006, the company said earlier this month. Cargo volume jumped 6.2% to 639,980 tons.

China Southern plans to start flying at least 10 new overseas routes before the Beijing Olympics in 2008, taking on rival Air China, the mainland’s largest international carrier.

Jimmy Wong, an aviation analyst with Nomura International said, ‘As of now, only 20% of China Southern’s revenue comes from international routes, so their main focus is the domestic market. But with the Chinese aviation industry posting double-digit growth numbers this year it is essential for the airline to expand.’

In the last 12 months, China Southern has entered into agreements to buy 80 Boeing B737-700/800s and 20 Airbus A320-series aircraft. China Southern plans to expand its fleet of over 300 aircraf t by 22% this year. The airline has a third of the Chinese aviation market.