The Beijing-based carrier said net profit for the 12 months ended Dec 31 was 3.78 billion yuan ($608 million), according to Chinese accounting standards, up from a net profit of 3.32 billion yuan. The result was higher than the average 3.22 billion yuan forecast by nine analysts in a poll by Thomson Reuters.
The carrier's revenue rose 7.4% to 104.83 billion yuan from 97.63 billion yuan on higher air-traffic volume during the year, it said.
Air China's stronger-than-expected results come on the back of the nation's resilient demand for air travel despite a weaker Chinese currency. Air China said it booked a net foreign-exchange loss of 360 million yuan for 2014, as the Chinese currency depreciated against the greenback during the period. It reported a 1.94 billion yuan net foreign-exchange gain in 2013, as the yuan appreciated 3% against the dollar during the year.
A weak Chinese currency hits the state airline's bottom lines because much of the debt they take on to finance aircraft purchases is denominated in dollars, so their debts become costlier as the yuan declines in value against the dollar. The airline's also have dollar-denominated aircraft lease and jet-fuel purchase obligations.
Air China, which operates the biggest international network among the three state-owned carriers, said it expects to carry at least 88.5 million passengers in 2015, up 6.6% from 83 million passengers it carried the previous year.
State rival Shanghai-based China Eastern Airlines Corp. is scheduled to release its results Friday, while China Southern Airlines Co., the nation's biggest carrier by fleet size, is scheduled to release its results Monday.
Source: Wall Street Journal by Joanne Chiu
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