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Saturday 20 December 2008
14b Yuan in Aviation Oil Bills Unpaid
China Aviation Oil, a supplier of jet fuel, said unpaid bills by mainland airlines have risen to 14 billion yuan (HK$15.8 billion) as the industry grapples with falling demand, according to a mainland newspaper.
China Aviation Oil, a supplier of jet fuel, said unpaid bills by mainland airlines have risen to 14 billion yuan (HK$15.8 billion) as the industry grapples with falling demand, according to a mainland newspaper.
Wang Yi, the company’s deputy general manager, told a financial forum that the risk of bad debts had been rising because of the global financial crisis, the Beijing Times reported yesterday.
The suspension of service at Okay Airways, a small private airline, might cost China Aviation “millions of yuan” in unpaid bills, Mr. Wang was quoted as saying.
“The company has taken measures to maintain healthy financials after Okay Airways halted its services,” he said.
Analysts said it was more common for small and medium-sized airlines to owe fuel bills, but many airlines, regardless of size, were delaying payments of landing and maintenance fees to airports.
“Overdue fee payments involve big and small airlines,” said Huatai Securities analyst Yu Jianjun. “The airlines lack cash.”
The China Civil Airports Association said last month 17 major airports had accumulated account receivables from mainland carriers of 4.2 billion yuan. At the end of October, most bills were more than three months overdue.
China Aviation Oil could not be reached for comment.
None of the Big Three airlines - Air China, China Eastern Airlines and China Southern Airlines - would comment yesterday.
High fuel costs and natural disasters hit mainland airlines early this year.
Although fuel prices have been falling in recent months, business has been affected by slumping demand, tightened security during the Olympics and hedging losses.
All of the Big Three carriers reported a loss in the third quarter: 1.9 billion yuan at Air China, 2.3 billion yuan at China Eastern and almost 900 million yuan at China Southern.
China Eastern and China Southern announced this month they would each get 3 billion yuan from its respective state-owned parent company.
But analysts said that capital injections and the measures announced by the Civil Aviation Administration of China were essential but insufficient to cover the losses.
1 comment:
14b Yuan in Aviation Oil Bills Unpaid
Kandy Wong
20 December 2008
China Aviation Oil, a supplier of jet fuel, said unpaid bills by mainland airlines have risen to 14 billion yuan (HK$15.8 billion) as the industry grapples with falling demand, according to a mainland newspaper.
Wang Yi, the company’s deputy general manager, told a financial forum that the risk of bad debts had been rising because of the global financial crisis, the Beijing Times reported yesterday.
The suspension of service at Okay Airways, a small private airline, might cost China Aviation “millions of yuan” in unpaid bills, Mr. Wang was quoted as saying.
“The company has taken measures to maintain healthy financials after Okay Airways halted its services,” he said.
Analysts said it was more common for small and medium-sized airlines to owe fuel bills, but many airlines, regardless of size, were delaying payments of landing and maintenance fees to airports.
“Overdue fee payments involve big and small airlines,” said Huatai Securities analyst Yu Jianjun. “The airlines lack cash.”
The China Civil Airports Association said last month 17 major airports had accumulated account receivables from mainland carriers of 4.2 billion yuan. At the end of October, most bills were more than three months overdue.
China Aviation Oil could not be reached for comment.
None of the Big Three airlines - Air China, China Eastern Airlines and China Southern Airlines - would comment yesterday.
High fuel costs and natural disasters hit mainland airlines early this year.
Although fuel prices have been falling in recent months, business has been affected by slumping demand, tightened security during the Olympics and hedging losses.
All of the Big Three carriers reported a loss in the third quarter: 1.9 billion yuan at Air China, 2.3 billion yuan at China Eastern and almost 900 million yuan at China Southern.
China Eastern and China Southern announced this month they would each get 3 billion yuan from its respective state-owned parent company.
But analysts said that capital injections and the measures announced by the Civil Aviation Administration of China were essential but insufficient to cover the losses.
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