Chinese airlines' losses narrow as travel recovery gathers pace

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 0.6b yuan ($82.32m) for the second quarter, down from the previous quarter’s 2.9b yuan. China Eastern Airlines Corp Ltd cut its Q2 loss to 2.4b yuan, from 3.8b yuan in Q1. China Southern reported on Tuesday a quarterly net loss of 1.0b yuan, compared with a net loss of 1.9b yuan in the first three months, according to Reuters’ calculation. HSBC Global Research forecasts that the three state-owned carriers could log 10.4b yuan in profit over H2 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. 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.<br/>