Eight Chinese airlines posted combined losses of $10 billion in the first half of 2022 as the coronavirus continues to bite
A stranded tourist checks in at Haikou Meilan International Airport in Haikou, south China’s Hainan Province, Aug 14, 2022. Photo: Xinhua
Eight listed Chinese airlines posted combined losses of nearly 70 billion yuan ($10.16 billion) in the first half of 2022, according to the latest company reports, as Covid-19-related pressures kept prices down. carriers in negative territory.
Air China recorded the biggest loss of 19.44 billion yuan, nearly double the loss in the same period last year. China Eastern Airlines, Hainan Airlines and China Southern Airlines each announced respective losses of more than 10 billion yuan.
The combined losses of the country’s three major carriers, Air China, China Eastern and China Southern, hit a record -49.7 billion yuan, eclipsing last year’s figures.
According to each airline’s financial report, the total combined net loss attributable to shareholders of the three major airlines last year was 40.959 billion yuan.
Passenger revenue fell sharply for all major carriers, with China Eastern registering the weakest passenger revenue. The Shanghai-based carrier said restrictions put in place from mid-March to the end of May had had a significant impact on commercial traffic, with the number of flights departing and arriving at Shanghai’s two airports suffering. a sharp decline.
China’s three aviation giants all saw an increase in corporate debt as of June 30, with total liabilities held by China Eastern amounting to 254.992 billion yuan, an increase of 10.08 percent from at the end of the previous year.
Fuel costs for the three airlines amounted to 33.703 billion yuan, accounting for more than a quarter of operating costs. Among them, China Southern recorded the highest jet fuel cost, reaching 14.395 billion yuan, a year-on-year increase of 16.69 percent.
Data from the Civil Aviation Administration of China confirmed the difficult market conditions by announcing that the total revenue of Chinese civil air transport was 29.34 billion ton-kilometres in the first half of 2022, this which represents only 46.7% of the same period in 2019, with passenger traffic amounting to 118 million, falling to 36.7% of the same period in 2019.
Although the number of domestic flights has rebounded from its lowest point in April 2022, indicating some recovery momentum, operational efficiency indicators such as passenger turnover and passenger load factor are not not yet returned to pre-pandemic levels.
However, market watchers said the gradual resumption of international flights will provide much-needed market confidence, with international routes seen as an important pillar for airlines to stem losses.
The first half of this year was a low point for China’s civil aviation industry, with a half-year loss of more than 90 billion yuan, more than the loss for the whole of the past year, said said Lin Zhijie, an independent market watcher. Global Times on Wednesday, but predicted second-half performance could pick up.