China's airlines lost about 2.5 billion yuan (US$312.5 million), while airports reaped profits of about 1.5 billion yuan (US$187.5 million) in the first half of the year, the Xinhua-run Shanghai Securities News reported Tuesday.

Li Shurong, an aviation analyst from the Shanghai Shenyin Wanguo Research & Consulting Co., Ltd., attributed the airlines' losses mainly to increases in fuel price. Li refused to provide details on which airline was the biggest loser or which airport made the most money.

None of China's airlines were in the black in the first six months, he was quoted by the paper as saying.

The National Development and Reform Commission, China's top economic planning body, raised the price of aviation fuel twice this year, up from 5,290 yuan to the present 6,020 yuan per ton, about a 12 percent increase.

Operating costs of China's air carriers reached 34.98 billion yuan in the first quarter, rising 23.5 percent from the same period last year, while core business revenues totaled 33.3 billion yuan, up 17.7 percent.

Yang Yuanyuan, head of the General Administration of Civil Aviation of China, said that rising costs have put heavy pressures on Chinese airlines. He urged air companies to take advantage of peak transport seasons and to cut expenditures.

Overshadowing the airlines' losses, China's airports were in the black due to increasing passenger traffic.

China's airlines carried 32.1 million passengers and 563,000 tons of freight, up 21.1 percent and 14.8 percent, respectively. Domestic air traffic totaled 4.51 billion ton-kilometers in the first quarter, up 20.5 percent against the same period last year.

Sun Liping, an aviation analyst from the TX Investment Consulting Co., Ltd., said she expects good earnings for airports but airlines will continue to suffer in the second half of the year.

"If the oil price remains high, airlines will continue to lose in the second half of the year," predicted Sun.

(Xinhua News Agency July 18, 2006)