Shanghai Airlines said its losses for 2008 could exceed 870 million yuan (US$127.19 million), more than double that in the previous year.

The Shanghai-based carrier took a real cash loss of 8.5 million yuan on fuel hedging contracts as at December 31, 2008, it said in a filing with the Shanghai Stock Exchange on Tuesday.

The airline said its book losses in the fair value of fuel hedging contracts during the period totaled 170 million yuan.

The airline attributed the poor performance to rising fuel costs and falling market demand due to snowstorm at the beginning of last year, the devastating earthquake in Sichuan Province, stringent security inspection during the Beijing Olympic Games and the global economic slowdown.

(China Daily January 20, 2009)