China's aviation industry posted a 23 percent decline in first-half profit on rising fuel prices, and slower travel demand in the world's second-biggest air-travel market.

Airlines, airports and related companies' total profit slipped to 3.7 billion yuan ($542 million), the Civil Aviation Administration of China said in a statement on its Web site today. Sales rose 15 percent to 140.3 billion yuan.

China Southern Airlines Co., Air China Ltd. and China Eastern Airlines Corp., the nation's big three carriers, have all reported slower demand this year, as inflation near a 12- year high crimps travel. The carriers, like airlines worldwide, are also paying more for fuel after oil prices almost doubled in the year ended June 30.

"The decline was mainly because of the rising costs caused by the fuel prices,'' said Li Jun, an analyst at Everbright Securities Co. in Shanghai. "If an oil price correction doesn't come, the decline will become more serious in the second half.''

Air China, the nation's largest international carrier, paid an average of 44 percent more for fuel in June than a year earlier, according to its July newsletter. China raised the price of jet fuel for domestic flights from June 20 to reflect higher oil prices and as part of wider efforts to cool its economy.

Cuts, Surcharges

Carriers are cutting flights, raising surcharges and taking other steps to cut costs. China Southern Chairman Liu Shaoyoung and other executives are taking 10 percent pay cuts to help offset higher fuel prices, the carrier said last week.

Chinese carriers buy fuel at subsidized prices for domestic services. They pay international market prices for overseas flights.

China's big three carriers have all plunged more than 60 percent this year in Hong Kong trading on concerns that rising fuel prices and slower growth may damp profits. China Southern, the nation's biggest airline, rose 2.5 percent to HK$3.26 at the close today.

Chinese airlines also had to cancel regular flights to aid relief efforts following the May 12 Sichuan earthquake, which likely killed about 87,652 people, according to the U.S. Geological Survey's Web site. China Eastern's passenger numbers fell 8.1 percent in May. Air China, the country's largest international carrier, reported an 11 percent decline.

Chinese airlines' combined passenger numbers fell 3.8 percent last month, as economic concerns cool demand. First-half numbers rose 5.4 percent to 91.8 million.

Other Asian carriers are also suffering from the rising fuel prices. Cathay Pacific Airways Ltd., Hong Kong' biggest carrier said July 2 that earnings this year will be "disappointing.'' Qantas Airways Ltd., Australia's largest carrier, said on July 18 that it would cut 1,500 jobs worldwide because of rising fuel cost.