Chinese airlines' losses narrow as travel recovery gathers pace

Published Wed, Aug 30, 2023 · 09:49 PM

A group of Chinese tourists arrive at Haneda Airport in Tokyo. The ending of three years of Covid curbs has 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. PHOTO: BLOOMBERG

DeeperDive is a beta AI feature. Refer to full articles for the facts.

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 (S$111 million) for the second quarter, down from the previous quarter’s 2.9 billion yuan.

China Eastern Airlines Corp cut its second quarter loss to 2.4 billion yuan, from 3.8 billion yuan in the first quarter.

China Southern Airlines Co 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.

China’s domestic tourism to hit 90% of pre-Covid levels in 2023

Optimism for the revival of package tours conflicting with challenges in Japan: a sluggish Chinese economy and contentious intentions to discharge treated Fukushima nuclear plant water into the ocean.

China group tours return to Japan but ‘explosive spending’ unlikely

Visa hassles, a lack of flights, idiosyncratic payment systems and the language barrier also limit China’s appeal to tourists from places such as North America and Europe.

China’s open for travel but few tourists are coming, or going

In particular, China – Apac’s main growth driver – and Hong Kong have the biggest recovery potential as the rebound for tourism activities there has not come into full force yet.

Travel sector dividends to reach US$8.5 billion in FY2024 on sustained recovery, demand growth: report

Visitor numbers at Hangzhou Zoo have gone up by 30 per cent to around 20,000 a day since a video of the Malayan Sun bear, named Angela, becomes a trending topic on Chinese social media over the weekend.

Tourists flock to Chinese zoo to see ‘human-like’ bear

DECODING ASIA

Navigate Asia in
a new global order

Get the insights delivered to your inbox.

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 early this month. Another three jets are expected to be delivered to the carrier later this year, building up a fleet of five C919. REUTERS

Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.

Aviation China Airlines china eastern airlines

Share with us your feedback on BT's products and services

Feedback