UPDATE 1-China Eastern Air expects profitable first half

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SHANGHAI, June 30 (Reuters) - China Eastern Airlines Corp (600115.SS: Quote, Profile, Research) (0670.HK: Quote, Profile, Research) expects to post a profit for the first half of the year despite a drop in passenger volume since May, while a rebound in traffic is likely after the Olympics, its chairman said on Monday.

"We did well in the first quarter. I see no major problems in being profitable in the first half," Li Fenghua told reporters on the sidelines of a shareholders' meeting.

He added it would be difficult to estimate the full-year result at this time, after a fall in traffic volume in May that extended into June.

The Shanghai-based carrier carried roughly 3 million passengers in May, down 8.11 percent from a year earlier.

Other major Chinese airlines, including China Southern Airlines Co (1055.HK: Quote, Profile, Research) (600029.SS: Quote, Profile, Research) and Air China (0753.HK: Quote, Profile, Research) (601111.SS: Quote, Profile, Research), also saw a slip in passenger volume in May after a devastating earthquake hit southwest China.

In addition, several airline executives have said that a slowdown in the global economy and strict airport security checks nationwide in the run-up to the Beijing Olympics were hurting international travel both into and out of China.

Li said he expected a rebound in passenger volume after the Olympics, when airport safety checks return to normal.

China Eastern reported a net profit of 210.8 million yuan ($30.7 million) for the first quarter, under Chinese accounting standards, compared with a 490.9 million yuan loss in the year-earlier period.

For 2007, net profit came to 586.46 million yuan, turning around a net loss of 2.99 billion yuan in 2006.

Chinese airlines, also hurting from high oil prices, have requested up to a doubling of the domestic jet fuel surcharge from the Civil Aviation Administration of China (CAAC), Zhou Chi, chairman of Shanghai Airlines (600591.SS: Quote, Profile, Research), told Reuters last week.

The airlines are seeking a rise in the surcharge to 120 yuan from 60 yuan for flights of 800 kilometres or less and to 140 yuan from 100 yuan for longer distances.

CAAC is expected to make a decision in July, Zhou said. ($1=6.861 Yuan) (Reporting by Fang Yan; Editing by Edmund Klamann)