Air China and China Southern reported unprecedented losses for the first three quarters of 2022, and the difficulties are industry-wide.
Several listed Chinese airlines released their third-quarter financial numbers this week. The numbers show the airline industry is still not out of the water, as repeated COVID-19 outbreaks and lockdowns throughout the country curb the willingness to travel demands of the country's citizens, and the weakening Chinese currency and surging fuel prices inflated the airlines' costs.
Air China reported an astonishing 8.668 billion yuan ($1.2 billion) loss in the third quarter only on the night of October 28th, which made up an unprecedented 33.36 billion yuan ($4.6 billion) loss for the first three quarters of 2022.
Air China's huge loss is because it owns the most widebody fleet and the most international routes in China, and Beijing, as the capital, has the strictest COVID prevention policy.
Below are the numbers released by Air China for the first third quarters:
Air China has reported a total profit loss of 73.67 billion yuan ($10.16 billion) since 2020. By September 2022, Air China's total assets and debt are reported as 296.9 billion yuan (US $40.94 billion) and 261.6 billion yuan ($36.07 billion), respectively. The debt is 70 billion yuan ($9.65 billion) higher than the number by the end of 2019. And the current debt-to-assets ratio (88.1%) is 23% higher than before the outbreak.
Additionally, both Shandong Airlines and Shenzhen Airlines, owned by Air China, are already in insolvency. Despite the difficult situation mentioned, Air China announced in June that it plans to take control of Shandong Airlines Group.
Air China has started a 15 billion yuan ($2.07 billion) private placement plan recently; however, compared with the debt, the money is just a drop in the ocean for the current Air China.
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Guangzhou-based China Southern Airlines, with the largest aircraft fleet in China, reported a net profit loss (attributable to the parent company) of -17.587 billion yuan (-$2.42 billion) for the first three quarters, a -187% decrease from the same number in 2021.
Below are the major Chinese airlines that have published their third-quarter financial numbers:
Another civil aviation sector, like airports, suffers consistent losses. Shanghai Airport Group, which owns both Shanghai Hongqiao and Pudong Airports, reported a net loss of 2.103 billion yuan ($290 million) for the first three quarters, including a loss of 580 million yuan ($80 million) in the third quarter only.
The third giant, China Eastern Airlines, is scheduled to release numbers on Sunday.
According to the Civil Aviation Administration of China (CAAC), the scheduled international flights during the coming winter-spring season (beginning on October 30th) would double compared with the prior year to 840 one-way flights per week.
No signs suggest that the Chinese government will further loosen the current 7+3 days quarantine policy for personnel entering China.
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