Despite strong revenue growth, the three giants Air China, China Eastern and China Southern Airlines still lost more than $1.7 billion last year.
According to its recently released business results, China's national airline Air China recorded a total revenue increase of nearly 167% in 2023 to 141 billion yuan, equivalent to 19.5 billion USD. Of which, revenue from international air transport increased by 346%. However, Air China's expenses also increased by nearly 60%, to 146 billion yuan.
That left China’s largest airline still with a loss of 1 billion yuan, or about $141 million, last year, though that was down sharply from a loss of $5.4 billion in 2022.
Similarly, China Eastern’s revenue also increased by more than 145% to about $16 billion. But high costs still left the company with a negative profit of 8.8 billion yuan, equivalent to $1.38 billion.
China Southern Airlines lost 1.56 billion yuan, nearly 200 million USD. The previous year, the airline lost 6.37 billion USD. Thus, China's three largest airlines lost a total of more than 1.7 billion USD last year.
According to Nikkei , these three airlines are falling behind in the context of smaller domestic rivals and airlines in the Asian region have significantly improved their profits after the pandemic.
Hainan Airlines, Spring Airlines and Juneyao Airlines have not yet announced their business results, but have forecast that they could make a profit of 300 million to 2.3 billion yuan in 2023. This partly reflects the reality of China's post-Covid-19 tourism aviation market. The three major airlines of this country have previously focused mainly on the domestic market rather than the international market.
While Chinese consumers are now traveling domestically more due to the sluggish economy , the total number of visitors to China last year was only a third of 2019.
In Asia, airlines competing with the three Chinese giants on international routes also had more positive results. Japan Airlines is expected to make a net profit of $530 million, All Nippon Airways about $860 million. Cathay Pacific is expected to make a profit of more than $1.1 billion.
But analysts say the worst is over for Chinese airlines. Profits for China’s three major airlines are expected to return to positive territory in 2024, ranging from 6.1 billion to 9 billion yuan, according to QUICK-FactSet. In January, HSBC said Chinese airlines were on track to post record profits of around 20.4 billion yuan, or nearly $2.9 billion.
Tu Anh (according to Aviation Week/Nikkei)
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