Air China, China Eastern June passenger volume down

SHANGHAI, July 16 (Reuters) - Air China (601111.SS) (0753.HK) and China Eastern Airlines (600115.SS) (0670.HK) carried fewer passengers in June than a year earlier as heightened airport security checks ahead of the Olympic Games and a devastating earthquake discouraged air travel.

The decline in traffic at two of China's three major airlines extended a drop in May linked to a devastating earthquake in southwest China, which curbed tourist travel to scenic Sichuan province and led to the cancellation of conferences and other events.

Air China, the country's flag carrier, flew 2.67 million passengers in June, down 7.5 percent year-on-year, with volume on international routes down 15.5 percent while domestic traffic fell 5.3 percent.

China Eastern's passenger volume fell 11.6 percent to 2.75 million in June, with international service down 24.6 percent and domestic service shrinking 9.7 percent.

The declining volume has compounded headaches from higher fuel prices, which boosted operating costs, and marks a rare reversal for an industry that has been buoyed in recent years by China's strong economic growth.

For the first half of the year, Air China carried 16.56 million passengers, down 0.8 percent year-on-year, while China Eastern's passenger volume slipped 1.23 percent to 18.11 million, the airlines said in separate statements.

Air China reported a 4.9 percent slip in cargo volume in June to 74,509 tonnes, while China Eastern's freight volume fell 5.9 percent to 69,400 tonnes.

Air cargo demand has boomed in China, fuelled in part by flourishing overseas trade, although export growth slowed substantially in June due to global economic weakness and the appreciation of China's yuan.

A dull global economy was also blamed by several airline executives for slowing international air traffic.