‘Arduous challenges’: Chinese carriers eye massive losses in 2022

China’s three largest airlines are expected to continue their loss-making streak, an anticipate record losses for 2022. In separate stock exchange filings, the ‘Big Three’ – comprising state-owned carriers Air China, China Eastern Airlines and China Southern Airlines – blamed “multiple shocks” for a steeper net loss, amid a collapse in passenger traffic, with capacity still below half of pre-pandemic levels. The three carriers also attributed their losses to the “impact” of the Covid-19 pandemic. They stopped short of blaming Beijing’s now-scuppered ‘Zero-Covid’ campaign, the signature policy of Chinese leader Xi Jinping that crushed domestic travel demand and all but entirely closed the country’s international borders. China Eastern says it was “confronted with arduous challenges” in the year, including high fuel prices, as well as the depreciation of the Chinese Yuan against the US Dollar. The airline, whose Shanghai hub was subjected to a long-drawn lockdown through mid-2022, is forecasting a net loss of between CNY36 and 39b ($5.3 to 5.8b), far steeper than 2021’s net loss of CNY13.5b. China Eastern says its passenger numbers for 2022 – at 250 million system-wide – represents only 38% of pre-pandemic volumes. Traffic, meanwhile, stood at 46% of 2019 levels. Air China was more sombre in its forecast, noting that its hubs across China “suffered repeated impacts of the pandemic”. “In particular, the capacity and total traffic in Beijing…have fallen to the lowest level since the start of the pandemic. Meanwhile, due to multiple adverse factors such as high oil prices and exchange rate fluctuations, it is more difficult for the company to improve its operation, and the invested enterprises related to the main business were also seriously affected,” it adds. The carrier expects a full-year net loss of between CNY37 and 39.5b – the worst performing among the ‘Big Three’. This compares to the CNY16.6b net loss incurred in 2021.<br/>