China’s top airlines post record annual losses, outlook brighter
8:36 am Thursday, March 30th, 2023
BEIJING (Reuters) – China’s flagship carrier Air China Ltd posted record annual losses of 38.6 billion yuan ($5.61 billion)on Thursday as the country’s now-abandoned zero-COVID policy led to a plunge in demand.
Shanghai-based China Eastern Airlines Corp Ltd on Thursday said it had lost a record 37.4 billion yuan in 2022, wider than its 2021 loss of 12.2 billion yuan.
Analysts forecast a return to profit for China’s leading airlines this year now that restrictions have eased.
Domestic flight numbers have exceeded 2019 levels since the middle of this month, according to data firm Flight Master, while international flight numbers to and from China were at about 30% of pre-pandemic levels this week, up from around 10% at the start of the year.
China Southern Airlines Co Ltd on Tuesday reported a record annual loss of 32.7 billion yuan, wider than the 12.1 billion yuan loss in 2021.
But the Guangzhou-based airline’s management team afterwards told analysts it expected passenger demand to fully recover to pre-pandemic levels in the domestic market by May and international capacity to reach 40% of 2019 levels by the peak summer season, Daiwa analyst Kelvin Lau said in a note to clients.
The record 38.6 billion yuan loss for 2022 of Beijing-based Air China more than doubled from the loss of 16.6 billion yuan in 2021, when there were fewer COVID-related lockdowns.
In the past three years, Air China has reported combined losses of nearly 70 billion yuan, according to a Reuters calculation.
Data from the Ministry of Transport showed that in 2022 China’s passenger traffic fell 42.9% to 252 million people.
($1 = 6.8810 Chinese yuan renminbi)
(Reporting by Sophie Yu and Brenda Goh; Editing by Jamie Freed and Mark Potter)
