China's top airlines post fourth straight year of losses in 2023

Sats

28/03/2024 14:11

BEIJING, March 28 (Reuters) - China's top airlines have
reported losses for a fourth consecutive year as weak domestic
demand in the fourth quarter and a slow post-pandemic recovery
in overseas travel weighed on earnings, but analysts said the
outlook was improving this year.
    Their performance, while better than in 2022, reflects how
slowly the Chinese aviation industry is emerging from the
COVID-19 pandemic, as international travel struggles to match a
recovery in domestic travel and consumers remain price-sensitive
amid the country's slowing economy.
    China lifted all pandemic-related international travel
restrictions at the start of 2023, one of the last countries to
do so. Data from flight tracking app Flight Master showed in
March the number of international flights to and from China was
at about 70% of pre-pandemic levels. 
    Shanghai-based China Eastern Airlines  600115.SS  on
Thursday posted an annual loss of 8.2 billion yuan ($1.13
billion), compared with a record loss of 37.4 billion yuan in
2022.
    The country's flagship carrier Air China  601111.SS  on
Thursday reported a loss of 1.04 billion yuan in 2023,
significantly narrower than its 2022 loss of 38.6 billion yuan.
    In the fourth quarter, it posted a loss of 1.8 billion yuan,
Reuters calculated, better than the 10.5 billion yuan loss in
the same period of 2022.
    Another major state-owned carrier, Guangzhou-based China
Southern Airlines  600029.SS , reported an annual loss of 4.1
billion yuan on Wednesday, far smaller than the loss of 32.7
billion yuan in 2022. Its fourth-quarter loss of 5.4 billion
yuan compared to its 15.1 billion yuan loss for the period a
year earlier, Reuters calculated.
    China Southern attributed its annual loss to weak consumer
spending power, jet fuel costs, supply chain problems and the
depreciation of the yuan. 
    Hopes are high the Chinese airline industry can turn a
corner this year. Brokerage Guotai Junan Securities said on
Monday that in January and February the percentage of seats
filled by small airlines had surpassed 2019 levels while that of
large carriers was also approaching pre-COVID levels.
    China's aviation regulator said in January it expected the
number of international flights to and from the country to reach
6,000 per week by the end of this year, or about 80% of
pre-COVID levels. 
    In 2023, the global airline industry returned to profit on
strong performances from carriers in North America, Europe and
the Middle East. Airline industry group IATA expects the
Asia-Pacific region to return to profit in 2024.
($1 = 7.2285 Chinese yuan renminbi)

 (Reporting by Sophie Yu in Beijing and Brenda Goh in Shanghai;
Editing by Jamie Freed)
 ((Sophie.Yu@thomsonreuters.com; 861056692136;))