Shanghai-based Spring Airlines, China's first low-cost carrier, said yesterday it earned 10 million yuan (US$1.25 million) in the first eight months of this year and is expecting to finish 2006 in the black.

Spring is the first private Chinese carrier to report a profit, a surprising move since surging jet fuel costs are dragging down net income at all the country's airlines.

"We've earned 500 million yuan since our maiden flight in July last year, and we've managed to turn a profit this year as the arrival of a third plane helped us cut costs," said Wang Zhenghua, chairman of Spring Airlines, a subsidiary of Spring International Travel Services Co, a major private travel agency.

"We can earn greater profits if we have five to 10 planes," he said, adding that Spring won't field new aircraft until the beginning of next year as the nation's aviation authority demands that private fliers document safety before expanding their fleet.

Industry analysts said Spring's earnings are helped by its parent, which can ensure that every seat is occupied.

Wang admitted fuel costs are a heavy burden, accounting for 37 percent of Spring's total operating expenses.

To ensure its profitability, Spring plans to boost income by offering more individualized paid services on its planes, Wang said.

Spring, for instance, doesn't provide free food on its planes, so it intends to add more varieties of paid food options, he said.

It's also considering offering entertainment rental services, including video game devices.

Spring is also training its cabin crew in public speaking to provide interesting information to passengers.

"The information could be introductions of tourist sites, interesting knowledge and stories, practical facts and even useful advertisements," said Wang, who hopes advertising can be another source of income.