Spring Airlines 2018 net profit up 19.1% on cost controls

Chinese LCC Spring Airlines overcame higher fuel costs and a weakened currency to post a 2018 net profit of CNY1.5 billion ($218.1 million), up 19.1% from CNY1.26 billion in 2017.

Total operating income increased 19.4% year-over-year (YOY) to CNY13.1 billion, while operating costs climbed 22.9% to CNY11.8 billion, with fuel accounting for 33.8% of the total. Excluding fuel, however, costs decreased 1.3% as the result of “improvements in major cost items,” the carrier said.

Marketing and sales costs decreased 25.4%, thanks to controlled and targeted marketing on digital platforms, the airline said.

Spring said it remains competitive by following a “two high, two low” strategy: high aircraft utilization and density, and low management and marketing costs.

The airline said it would also continue to focus on ancillary revenue, which totaled CNY610 million in 2018.

In 2018 Spring carried 19.5 million passengers, increasing 13.7% YOY. Capacity (ASK) rose 16.7%, outpacing traffic (RPK), which was up 14.7%, resulting in an average load factor of 89%, down 1.6 points. Yields also increased 7% YOY.