China’s ‘Big Three’ predict total loss of nearly $4.6 billion
China’s “Big Three” airlines, namely Air China, China Southern Airlines (ZNH) and China Eastern Airlines (CIAH) (CEA), reported their estimated annual losses in 2020, collectively reaching a total of CNY30 billion ($4.6 billion) net loss.
Among China’s three largest airlines Air China is expected to perform the worst, as it forecasted a net loss of between CNY13.5 and 15.5 billion ($2.1 and2.4 billion), while the net profit in 2019 was CNY6.4 billion ($992 million).
In the first half of 2020, Air China’s net loss was up to CNY9.4 billion ($1.4 billion). In the second half of 2020, the airline’s losses gradually narrowed, as the company continued to manage cost controls.
Meanwhile, Shanghai-based China Eastern Airlines (CIAH) (CEA) forecasted a net loss between CNY9.8 and 12.5 billion ($1.5 and 1.9 billion), while in 2019, it managed to reach a net profit of up to CNY3.2 billion($496 million).
Among China’s “Big Three”, China Southern Airlines (ZNH) forecasted the smallest financial loss. The country’s largest airline by passenger numbers predicted a net loss of between CNY7.9 to 10.8 billion ($1.2 to1.6 billion). In comparison, it posted a net profit of CNY2.7 billion ($418 million) in 2019.
The Guangzhou-based airline said in a statement that its operational capacity for international routes fell by 80.6% in 2020, compared to a year prior.
All three state-owned airlines said that operating results were adversely affected due to the severe impact of the COVID-19 pandemic, which continues to negatively influence passenger demand and has led to net losses.
According to the statistics of the Civil Aviation Administration of China (CAAC) reported in November 2020, international air traffic levels were down by 86.1% and domestic air traffic fell by 32.1%.
“Affected by the COVID-19 pandemic, the traveling willingness of passengers dropped sharply, which had a significant impact on the global aviation industry,” indicated a China Southern Airlines (ZNH) statement.
Currently, with the new surge of COVID-19 cases in China, the government started a new round of protective measures. Chinese authorities are encouraging people to stay put during the Chinese New Year holiday period, which used to be the peak season for Chinese airlines.
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