Air China Ltd has reported profits of CNY 981 million (US$143.7 million) in the first quarter of 2009, after incurring a loss of CNY 9.15 billion, including CNY 7.47 billion from fuel hedging losses, inthe full year 2008.

After the third quarter 2008 plunge in the global air market, Air China slashed its capacity on European and US routes by more than 40 per cent, focusing instead on domestic routes.

China National Aviation Holding Company (CNAHC), parent company of Air China, is also considering selling the shares it holds in China Eastern Airlines, according to its chairman.“Whether CNAHC will sell the stake in China Eastern will depend on the market condition”, said Kong Dong, general manager of CNAHC and board chairman of Air China, according to a report in Beijing Business Today.

CNAHC now holds 12.07 per cent shares of China Eastern. The company has upped its stake in China Eastern since 2007 from 4.92 per cent to the current level, in an effort to join in the competition to acquire China Eastern against Singapore Airlines.

After the possible marriage of China Eastern and Singapore Airlines was successfully prevented by CNAHC in 2008, China Eastern rejected the purchase intention of CNAHC. Air China later set up its branch company in Shanghai, where China Eastern is headquartered.

Announcing the 2008 full year and Q1 2009 results this week, the Air China board chairman also said the company would enlarge its market share in Shanghai from 14 to 20 per cent, without specifying how.