Although China's three most prominent airlines were in the red during the second quarter, industry analytics believe profitability for the trio is the horizon, with Beijing having recently eased more travel curbs.
China’s three largest airlines remained in the red in the second quarter, although losses narrowed significantly from the previous three months as a recovery in the domestic aviation market gathered pace.
The ending of three years of COVID curbs has delivered a jolt to China’s tourism industry, with analysts predicting that the big three state carriers could return to profit in the second half of this year, halting a run of deep losses.
Air China, the flag carrier of the country, posted a loss of 0.6 billion yuan ($82.32 million) for the second quarter, down from the previous quarter’s 2.9 billion yuan.
China Eastern Airlines Corp Ltd cut its second quarter loss to 2.4 billion yuan, from 3.8 billion yuan in the first quarter.
China Southern Airlines Co Ltd reported on Tuesday a quarterly net loss of 1.0 billion yuan, compared with a net loss of 1.9 billion yuan in the first three months, according to Reuters’ calculation.
HSBC Global Research forecasts that the three state-owned carriers could log 10.4 billion yuan in profit over the second half of 2023, boosted by news China’s lifting of pandemic-era restrictions on group tours for more countries, as the recovery in international travel has been far more sluggish than domestic travel.
That is in large part due to staffing issues for many global airlines that have limited the flying of more routes, slow visa issuance for Chinese travellers amid backlogs in many Western countries, and a sputtering domestic economy that is discouraging many holidaying Chinese from spending big.
In comparison, domestic flight volumes have rebounded quickly in the first half, exceeding pre-COVID levels in 2019.
The Shanghai-based China Eastern took delivery of its second C919, China’s home-grown narrow-body passenger jet, and put it into commercial operation in early August. Another three jets are expected to be delivered to the carrier later this year, building up a fleet of five C919.
($1 = 7.2882 Chinese yuan renminbi)
(Reporting by Sophie Yu, Brenda Goh; Editing by Jason Neely and Mike Harrison)
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Photo credit: China Southern Airlines was one of the major Chinese airlines that posted a quarterly loss. Runway21rr / Wikimedia Commons