Hainan makes leap back to profitability in 2021

Hainan Airlines swung back to profitability in 2021, but began the new year posting a steep operating loss as China’s pandemic-related curbs impacted travel demand. For the year to 31 December 2021, the carrier posted an operating profit of CNY3.5b ($530m) - a significant improvement from the record CNY71.6b operating loss in 2020. Hainan, which in January completed business restructuring, reported a 16% year-on-year increase in revenues to CNY34b, while costs fell 9% to CNY46b. The carrier posted a full-year net profit of CNY4.7b, reversing the CNY64b net loss in 2020. Hainan’s full-year earnings contrast with that of China’s three largest carriers, which were all loss-making in 2021. The carrier, previously part of the debt-laden HNA Group, was placed under new management under strategic investor Liaoning Fangda Group Industrial in early December 2021. Liaoning Fangda was selected last September as the embattled HNA Group’s strategic investor, paving for it to be the controlling shareholder of the group’s aviation businesses. Despite improved financial performance in 2021, Hainan warns that it was far from being out of the woods. It notes that global aviation recovery remains slow with “much uncertainty”. <br/>