China's flag carrier Air China has reported a profit of 170 million yuan (US$20.48 million) in the first 11 months of the year. Industry insiders say it lays a solid foundation for the company to earn a full-year profit, though its business has been dented in this spring by the outbreak of severe acute respiratory syndrome.

The airline, which operates the most international flights among carriers on the Chinese mainland, is among the latest domestic firms trying for an initial public offering in Hong Kong next year.

Air China earned a profit of 300 million yuan during last month, which used to be a slow month for Air China, it said in a statement Wednesday.

"Our company used to have losses in November. It's the first time we have earned a profit for such a low season," Air China spokesman Wang Yongsheng said. He attributed the result to the boom in air travel.

Air China carried 26.3 percent more passengers in November from the same period last year and had a sales rise of 22 percent year-on-year.

The load factor, or the proportion of seats sold on each flight, was more than 70 percent in the month.

However, a local security analyst surnamed Zhu said that the better-than-usual performance was mainly led by cut of tax and administration fees offered by the central government, which is designed to help Chinese airlines to recover quickly from the damage brought by SARS.

The disease brought a loss of 1.45 billion yuan during the SARS period.

Air China, which has been planning for an overseas initial public offering for several years, has gained profits for two consecutive years since 2001.

(Shanghai Daily December 25, 2003)