The big Chinese airlines are beginning to climb out of the financial hole left by the country's strict Covid restrictions.
China’s three largest airlines reported narrower losses in the first quarter, with domestic and international travel picking up after the country dropped its strict Covid restrictions at the end of last year and reopened its borders.
Shanghai-based China Eastern Airlines, China’s number three carrier by revenue, cut its first quarter loss to 3.8 billion yuan ($549.3 million) from 9.3 billion yuan in the last three months of 2022.
China Southern Airlines, which posted a staggering 15.1 billion yuan loss in the last quarter of 2022, reported a 1.9 billion yuan net loss, while flagship carrier Air China cut its quarterly loss to 2.9 billion yuan from 10.5 billion yuan.
The three major airlines increased flights significantly in March, with the number of domestic and international trips offered by Air China topping that of the same month in 2019, before the pandemic.
Although domestic travel in the world’s second-biggest economy has rebounded, international flights are still only at a third of pre-Covid levels, according to Flight Master data, holding back a broader recovery for the sector.
Investment bank CICC said this month that it expects the recovery of international routes to accelerate in the second quarter, adding the pace “might be faster than market expectations.”
CICC expects international and regional flights — including routes to Macau and Hong Kong — for the summer season to reach 60 percent of 2019 levels.
China’s aviation authority has set a goal for a recovery to about 75 percent of pre-pandemic levels overall this year, and also to break even with a total of 460 million passenger trips.
That compares with 252 million passenger trips in 2022, according to data from the transport ministry.
China Eastern and China Southern said in March they would resume taking deliveries of Boeing 737 Max jets this year, after the aircraft was grounded in 2019 following two fatal crashes.
Reuters last week reported that China issued an update of its 737 evaluation report on April 14, allowing carriers to take deliveries of the jet.
Hainan Airlines said earlier this month it planned to take delivery of 14 Max planes from lessors between 2023 and 2026, the first Chinese carrier to announce new plans to add the airline to its fleet since it was grounded.
($1 = 6.9180 Chinese yuan renminbi) (Reporting by Sophie Yu and Brenda Goh; Editing by Kirsten Donovan)
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Photo credit: A rebound in international travel helped shrink the losses at China's big three airlines. Tomás Del Coro / Flickr