The carrier lowered its full-year passenger-numbers forecast to 39.7 million.
Air China, the world's biggest carrier by market value, saw its first-half profit more than doubled year-on-year as fuel-hedging gains offset plunging international travel.
Net income surged to 2.88 billion yuan ($422 million) from 1.23 billion yuan a year earlier, the carrier said in a Hong Kong stock exchange statement late on Tuesday. Sales fell 9.6 percent to 23.1 billion yuan.
A 1.5 billion yuan paper profit from fuel hedging helped Air China weather a 10 percent drop in international passenger numbers amid the global recession and concerns over the A(H1N1) flu.
The carrier, which last week agreed to raise its stake in Cathay Pacific Airways Ltd, also said that rising domestic competition would damp yields for the rest of the year.
"Chinese airlines have had to turn to the domestic market for growth," said Li Lei, an analyst at China Securities Co in Beijing. "That's helped offset the traffic fall on overseas routes, but added to competition on internal routes."
Air China, the nation's largest international carrier, rose as much as 5 percent in Hong Kong trading to close at HK$4.64. In Shanghai, the airline gained the 10 percent daily limit to 7.92 yuan.
The carrier posted a first-half operating profit of 2.8 billion yuan, compared with an 837 million yuan loss a year earlier. Fuel costs fell to 6.1 billion yuan from 10.6 billion yuan.
