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Shanghai Airlines lost 1.25b yuan in 2008

By Lu Haoting (chinadaily.com.cn)
Updated: 2009-03-25 11:19

Shanghai Airlines encountered a mounting loss of 1.25 billion yuan ($183 million) last year, more than double the loss in the previous year, the airline said on March 25.

Related readings:  Shanghai Airlines gets cash injection of 1b yuan  Shanghai Airlines forecasts heavy loss for 2008  Airline denies merger report

Due to two consecutive years of losses, the Shanghai-listed company's stocks will be capped "special treatment" starting from tomorrow, Shanghai Securties Journal reported on March 25.

The company attributed the losses to dropping air traffic demand and previously surging oil prices.

The airline realized 13.37 billion yuan in sales in 2008, up 8.63 percent year-on-year. But its operating costs surged 21.61 percent year-on-year to 10.03 billion yuan. The 263 million yuan losses at its cargo subsidiary, Shanghai Airlines Cargo International Co Ltd, also had a big impact on the airline's annual report, the company said.

Shanghai Airlines said at the end of last month that it will raise 1 billion yuan by issuing non-public shares to Jin Jiang International Holdings co Ltd, its third largest shareholder, to lower its high debt-to-equity ratio.