Air China, the biggest international carrier in the Mainland, is expected to post a Q3 profit of 2.9 billion yuan (362.5 million US dollars), boosted by strong growth in passenger traffic and rising fuel surcharges on domestic and overseas routes, The Standard reported. Citigroup, which rates the carrier a "fundamental buy" on the basis of its growth potential and strengthening profile, forecasts Air China will post a net profit of 2.9 billion yuan (362.5 million US dollars) in the third quarter. "We are confident Air China will sustain its superior profitability on its dominant share in Beijing, strong alignment with Cathay [Pacific], high yields and load factors, and effective cost management," said the paper, quoted Citigroup as saying. Guotai Junan Securities analyst Alan Lam said given that Air China recorded a passenger load factor of 81 percent in July to August, the strongest in 10 years, the carrier is on course for 15 percent passenger volume growth in the third quarter. Positive news will continue to boost the carrier's fourth-quarter performance as well. Cathay Pacific will start to contribute profits to Air China from this month. Citigroup forecasts Cathay will contribute 132 million yuan in 2006 and 862 million yuan in 2007. Cathay is expected to contribute 1.05 billion yuan in 2008. Under a deal involving Dragonair, Cathay doubled its shareholding in Air China to 20 percent. Guotai Junan Securities' Lam said that through code- sharing, the airlines will work out a smooth transfer of passengers from the mainland network to international routes.