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Air China Ltd., the country's flagship carrier, reported a nearly 15-fold jump in 2004 net profit, thanks to stronger passenger numbers fueled by the mainland's soaring economy.
Analysts see mixed fortunes for China's airline industry this year, with higher jet fuel prices and increasing competition likely to offset strong domestic travel demand.

Air China, the last of the country's three large airline groups to list, is expected to benefit from improved efficiencies after it absorbed two smaller rivals under a broad consolidation of China's state-controlled airline industry.

"We expect the Chinese economy to continue to grow at a rapid pace, and demand for traffic will increase rapidly over the next three years with an annual growth rate of about 13-15 percent," said Air China president Ma Xulun.

The country's largest passenger and cargo carrier posted a net profit of 2.39 billion yuan (US$288.6 million) for the year ending in December, compared with 160 million yuan in 2003 when the Severe Acute Respiratory Syndrome (SARS) outbreak devastated the travel industry.

The result beat market expectations that it would post net profit of 2.3 billion yuan, based on the average forecast from six analysts. It also topped the firm's own forecast of 2.29 billion yuan cited in its IPO prospectus.

The company moved 24.5 million passengers last year, nearly 36 percent more than the previous year, and handled 17 percent more cargo.

Turnover rose about 32 percent to 30.83 billion yuan. Air China, which did not declare a dividend last year, plans to pay 15-30 percent of its profits back to shareholders this year.

Before Tuesday's results, six analysts expected the airline to post an average net profit of 2.4 billion yuan in 2005.