Higher fuel costs drag China Southern profits down

China Southern Airlines Co., the country's largest carrier in terms of passenger numbers, said Friday that its profits fell 12.58 percent in 2011 as fuel prices rose.

The company's net income dropped to 5.08 billion yuan (806.35 million U.S. dollars), or 0.52 yuan per share, from 5.8 billion yuan, or 0.7 yuan per share, in 2010, the Guangzhou-based company said in a statement filed to the Shanghai Stock Exchange.

China Southern flew 80.68 million passengers last year, up 5.5 percent year-on-year, and carried 1.14 million tonnes of goods, up 1.6 percent from the previous year, the company said.

Fuel costs jumped 39.1 percent in 2011 because of higher prices and an increase in services, driving the company's operation costs up and weighing down on its profitability.

The company said it expects a slowdown in passenger growth this year as the slowing domestic economy and sluggish global economic recovery will likely dampen demand for its flights.

The carrier is targeting an 8.9-percent rise in passenger numbers and an 8.1-percent increase in freight volume this year, according to the statement.

China Southern's shares climbed 0.89 percent to 4.51 yuan as of 1:45 p.m. Friday.