Despite steep fuel price hikes, the fast-expanding Shenzhen Airlines will record a 120 million yuan (US$15 million) profit for the first four months of this year, General Manager Li Kun forecasted.

The Shenzhen-based airline became the country's largest private carrier after its State-owned shareholder auctioned off its 65 percent stakes last May.

"Our company has entered a new development era last year the net profit stood at 120 million yuan, but we can surely meet this by the end of April," Li told reporters at a ceremony to unveil the company's new logo yesterday morning.

He took the helm of Shenzhen Airlines last December after working for the State-owned China Southern Airlines, one of the mainland's three biggest carriers, for 27 years.

According to company figures, it earned 1.3 billion yuan (US$162.5 million) from its core business in the first quarter of this year, up 45.3 percent from the corresponding period last year. The profit surged nearly 129 percent year-on-year to about 64.5 million yuan (US$8.1 million).

Li said the profit for April alone would surpass 50 million yuan (US$6.3 million).

Its growth came shortly after China's three biggest carriers announced their annual results for 2005, two of which recorded big losses. They haven't released the results for the first quarter yet but insiders say the situation remains negative.

Except Air China's mild growth of 0.9 percent in net profit, both Shanghai-based Eastern Airlines and Guangzhou-based Southern Airlines posted big net losses, 467.3 million yuan (US$58.4 million) and nearly 1.8 billion yuan (US$225 million), respectively.

Li said the company's profit surge is attributed to its consistent efforts in cutting operational costs and improving efficiency.

"We are trying to turn our company into a low cost carrier with Chinese characteristics. We won't lower our service quality but will adopt new management systems and improve our efficiency," Li noted.

Currently, the company has carried out reforms in management, flight route planning, human resources and maintenance to minimize costs.

It has set up a task team to study a low-cost mode that could be applied to other airlines, which has received funds and support from the Civil Aviation Administration of China, Li said.

Shenzhen Airlines, which aims to be a world famous brand by 2015, is studying the feasibility of listing but it's not in a hurry, Li said.

"We will pay more attention to multiple financing channels in 2007 and 2008 but we believe it's better to list the company when it grows," Li told reporters.

Evolving from the Chinese ancient character that means roc, the new golden logo is on a red background.

The previous logo will be gradually phased out in the next two to three years.

It will take about 300,000 yuan (US$37,500) to implement the change in logo.

(China Daily April 26, 2006)