China Eastern reports steep full-year net loss

SHANGHAI: City-based carrier China Eastern yesterday reported a net loss of 13.93 billion yuan for 2008, a steep drop over 2007, when it had made a net profit of 604 million.

The company has attributed the huge loss to several factors, including falling passenger demand due to the financial crisis, wrong bets on fuel hedging contracts, soaring operating costs associated with dropping seat kilometer utilization, and provisioning for the declining value of corporate assets.

"The airliner will soon be capped with an 'ST' (special treatment) tag on the bourse because of its losses in 2008, and its daily trading limit will narrow to 5 percent," said Zhang Xun, an analyst with TX Investment Consulting.