Big three Chinese airlines extend losing streak as rivals rise after COVID
China's big three state-owned airlines are lagging behind as domestic and Asian competitors dramatically improve their bottom lines following the end of COVID-19 travel restrictions. China Southern Airlines, Air China and China Eastern Airlines recently logged total net losses of 13.3b yuan ($1.87b) for 2023, even though aggregate revenue jumped more than twofold on the year to 427.6b yuan as each one beat its pre-pandemic figure. All three have now posted net losses for four straight years. Their struggles to return to the black stand in sharp contrast to smaller domestic rivals as well as regional peers. Three Shanghai-listed second-tier carriers -- Hainan Airlines, Spring Airlines and Juneyao Airlines -- have yet to report their full-year results but issued profit guidance saying that they would post positive net figures between 300m yuan and 2.4b yuan for 2023. That would improve on the smaller trio's 27.4b yuan in aggregate net losses for 2022. And it would put them well above the big three's losses for 2023, which ranged from 1b yuan to over 8b yuan. The carriers' diverging fortunes likely reflect the nature of China's post-COVID travel market, which has been heavily geared to domestic trips rather than the international journeys the big players count on more for profits. While Chinese consumers have stayed closer to home amid a sluggish economy, total entries to China by foreign nationals last year were only about a third of the pre-pandemic level in 2019. "China's ongoing complex adjustments of its flight resources, with shifts between international and domestic flights and between passenger and air cargo ones, during and post-pandemic have posed challenges to earnings projections," Karen Li at J.P. Morgan analyzed in a recent report. As demand for domestic passenger flights rebounded faster, the CAAC prioritized that portion of services. Elsewhere, major Asian carriers that compete with China's big three on international routes have been making turnarounds or big leaps.<br/>
https://portal.staralliance.com/cms/news/hot-topics/2024-04-08/star/big-three-chinese-airlines-extend-losing-streak-as-rivals-rise-after-covid
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Big three Chinese airlines extend losing streak as rivals rise after COVID
China's big three state-owned airlines are lagging behind as domestic and Asian competitors dramatically improve their bottom lines following the end of COVID-19 travel restrictions. China Southern Airlines, Air China and China Eastern Airlines recently logged total net losses of 13.3b yuan ($1.87b) for 2023, even though aggregate revenue jumped more than twofold on the year to 427.6b yuan as each one beat its pre-pandemic figure. All three have now posted net losses for four straight years. Their struggles to return to the black stand in sharp contrast to smaller domestic rivals as well as regional peers. Three Shanghai-listed second-tier carriers -- Hainan Airlines, Spring Airlines and Juneyao Airlines -- have yet to report their full-year results but issued profit guidance saying that they would post positive net figures between 300m yuan and 2.4b yuan for 2023. That would improve on the smaller trio's 27.4b yuan in aggregate net losses for 2022. And it would put them well above the big three's losses for 2023, which ranged from 1b yuan to over 8b yuan. The carriers' diverging fortunes likely reflect the nature of China's post-COVID travel market, which has been heavily geared to domestic trips rather than the international journeys the big players count on more for profits. While Chinese consumers have stayed closer to home amid a sluggish economy, total entries to China by foreign nationals last year were only about a third of the pre-pandemic level in 2019. "China's ongoing complex adjustments of its flight resources, with shifts between international and domestic flights and between passenger and air cargo ones, during and post-pandemic have posed challenges to earnings projections," Karen Li at J.P. Morgan analyzed in a recent report. As demand for domestic passenger flights rebounded faster, the CAAC prioritized that portion of services. Elsewhere, major Asian carriers that compete with China's big three on international routes have been making turnarounds or big leaps.<br/>
