By Kimberley Kao


Air China shares fell after the flag-carrier missed expectations in the latest quarter despite an uptick in air travel, as higher cost of goods and oil prices weighed on the carrier's bottom line.

The airline's Hong Kong-listed shares fell as much as 9.7% in early trading Monday and were last 5.3% lower at HK$3.91. Its China-listed shares were 4.2% lower on the Shanghai Stock Exchange.

The Beijing-based carrier on Saturday posted a net loss of 1.67 billion yuan (US$230.5 million), narrowing from CNY2.93 billion in the same period a year earlier. Revenue rose 60% on year on a pickup in air travel with China's borders fully open in the wake of the Coid-19 pandemic.

Market watchers were looking for smaller net loss given consensus expectations that Air China will break even in 2024, said Paul Yong, analyst at DBS Group Research. As a result, investors are likely taking profits after a recent stock rally, he added.

Citi Research analyst Amy Han said in a research note that Air China may face headwinds in the second quarter due to the non-peak season and higher fuel prices. Still, as international travel recovers, outbound demand recovery in pre-Labor Day bookings likely accelerated, which will help the load factor and total outbound volume in the summer, Han adds.

Air China said separately over the weekend that it is in talks to purchase 100 Comac C919 extended-range jets worth US$10.8 billion. It said the purchase, which would boost fleet capacity by about 7.5%, would be funded using internal resources and bank loans.

Han of Citi said the impact on overall capacity would minimal given the potential to withdraw some jets due to market conditions and aging aircraft facing retirement.


Write to Kimberley Kao at kimberley.kao@wsj.com


(END) Dow Jones Newswires

04-29-24 0129ET