First-half profits at Air China fell by 12% as rising fuel costs offset a double-digit rise in revenue.
Profit for the six months to June 30 came in at 4 billion yuan ($625 million), the Beijing-based carrier said.
Revenue was up by 31.6% to 45.6 billion yuan ($7.1 billion) but that was offset by a 53% jump in fuel costs to 16.3 billion yuan ($2.5 billion).
The airline said results were “relatively satisfactory” despite a “more challenging” business environment due to US and European economic turmoil and Japan’s earthquake and tsunami.
It said an improvement in global airline profits this year would depend on fuel prices.
“In the second half of the year, high risks and great uncertainties are expected to continue to be associated with the global economy,” a statement said.
“The progress of the economic recovery in the US and Europe will bring great pressure over the rebound of the demand in the international aviation market.
“The fluctuating fuel price will remain the key factor affecting the improvement of the results of global aviation industry. Furthermore, the operating environment will become more complicated in light of intensifying competition among domestic airlines, the inadequacy of support resources and the impact from high-speed railways in some of our markets.
“Nevertheless, the stable growth of the Chinese economy will create opportunities for the growth of the aviation industry,” the carrier added, saying that close co-operation with partner Cathay Pacific will be strengthened “to achieve a stable and healthy development”.