Low profits likely due to rise in oil prices China Eastern Airlines

Due to the drastic increase in the oil prices, China Eastern Airlines is expecting a low profit this year as compared to 2010.

Li Jun, Deputy General Manager, China Eastern Airlines said, “This year is not going to be better than last year. The impact of volatile oil prices will be large. 2010 was the best year in China Eastern's history. China's economy recovered very quickly and we had the World Expo."

The Shanghai Trade Expo drew only a total of 72 million tourists, which was quite less when compared to the previous years’ passenger traffic.

According to Li, the total fuel consumption accounts for 40 percent of China’s Eastern Airlines. The airline will see a sharp drop in the cargo and passenger traffic from 20 percent in 2010 to 12 percent in 2011.

Along with this the Chinese government will be opening a high-speed rail link that will connect Beijing to Shanghai. The USD 33 billion project, which is expected to start from June 2011, will prove to be a boom for the airline business. The airline hopes to get tremendous growth potential with the train link.