China's top airlines post heavy Q1 losses on COVID curbs

China’s three biggest airlines have reported heavy Q1 losses as prolonged COVID curbs weighed on travel demand and a weakening Chinese currency and rising fuel prices inflated costs, trends which persist in the current quarter. Analysts expect another year in the red for Chinese airlines as Beijing sticks with its zero-COVID policy to stop the spread of the virus. China Eastern Airlines on Friday reported a Q1 net loss of 7.8b yuan ($1.18b) versus 3.8b a year earlier. The Shanghai-based carrier lost 4.05b yuan in Q4 last year. Shanghai in late March started ordering its 25 million residents to stay at home as authorities raced to contain record COVID-19 case numbers, leading to the cancellations of almost all domestic flights from the city’s two airports throughout April. Beijing-based Air China, the country’s flag carrier, late on Thursday reported a quarterly net loss of 8.9b yuan, its largest since records began in 2008. A year earlier it reported a loss of 6.2b yuan. The capital city, which had put in place a strict entry policy ahead of the Olympic Games in February, is also grappling with fresh coronavirus outbreaks. Flight cancellation rates at Beijing’s two airports have reached around 80%, according to data from Flight Master. China Southern Airlines posted a Q1 net loss of 4.5b yuan, up from 4.0b a year earlier. The outlook for China’s domestic summer travel season is looking bleak at a time when international travel remains effectively closed. Air passenger traffic over the upcoming five-day Labour Day holiday, typically a high travel period, is set to fall 77% from a year earlier, China’s aviation regulator has forecast.<br/>