Air China, the country's flag carrier, flew to a net profit of 93 million yuan (US$11.27 million) last year, becoming the first airline among the three largest carriers on the Chinese mainland to report its annual financial results.

The carrier, which is planning to list shares on the Hong Kong stock market, targets to earn 1 billion yuan in profit this year, said company spokesman Wang Yongsheng.

Wang said in an e-mail yesterday that Air China lost 1.92 billion yuan during the first half of 2003 due to the outbreak of severe acute respiratory syndrome, or SARS, which deter passengers from flying for months.

It made up the loss by earning 2.01 billion yuan during the second half of last year, taking advantage of strong rebound in the domestic air travel market.

Last year, Air China carried 18.05 million passengers and 564,000 tons of air freight, but the company didn't provide a comparison with the previous year. Turnover from its core business totaled 22.26 billion yuan.

Anticipating air traffic to grow this year, the Beijing-based carrier will introduce 21 new planes to its fleet, which comprises more than 130 aircraft.

"Most analysts believe that airlines will fare much better in 2004 if there was no major upset of any kind as international tourists, who kept away from China out of SARS fears, will return and air traffic within China is always growing," said Zhu Anping, an analyst with Shenyin & Wanguo Research and Consulting Co Ltd.

Air China expects to have a turnover of 24 billion yuan from carrying 23 million passengers and 4.73 billion yuan from the 696,000 tons of freight this year.

Shanghai-based China Eastern Airlines Co Ltd and Guangzhou-based China Southern Airlines Co Ltd, the two major rivals of Air China, haven't disclosed financial results yet, but analysts said the two are likely to post slight losses.

(Xinhua News Agency January 15, 2004)