Shanghai Air Says 2008 Net Loss At Least Doubles

January 20, 2009

Shanghai Airlines said on Tuesday it expected its net loss for 2008 to have at least doubled from the previous year's CNY435 million yuan (USD$63.65 million) as the passenger travel market weakened.

The regional airline also blamed the expanded loss in part on volatile fuel prices, reporting CNY170 million in unrealised fuel hedging losses as of December 31 following a drop in fuel prices during the second half of the year.

It gave no further details. It will release full results in coming weeks.

The airline, more than 35 percent owned by the Shanghai government, has been the target of intense speculation of a possible merger with China Eastern Airlines.

Industry and government sources said last summer that government officials were discussing combining the two Shanghai-based carriers.

Shanghai Airlines said last month that it needed to raise capital from its shareholders but was still studying the matter and had no concrete fund-raising plans.

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