China’s Big Three not out of the woods yet in Q1 2021
China’s top three airlines, namely Air China, China Southern Airlines (ZNH) and China Eastern Airlines (CIAH) (CEA), reported losses in the first quarter of 2021, blaming the resurgence of COVID-19 cases in China during the course of winter 2021.
Air China’s financial performance in the first quarter of 2021 was the least favorable among China’s “Big Three” airlines. China’s flag carrier posted a net loss of 6.2 billion yuan ($958 million) in Q1 2021. However, during the period, Air China recorded an operating profit of 14.5 million yuan ($2.2 million).
In a statement, the Beijing-based air carrier said it would continue to adhere to the principle of “optimizing operation of the all fleets to strengthen market research, closely follow up the evolving demand, seize the opportunity for market recovery, and timely optimize its input in transportation capacity”.
However, despite negative financial results in the first quarter of 2021, China’s national airline noted that the demand for civil aviation travel would recover continuously, as the vaccination rates across China and other countries begin accelerating.
Meanwhile, Guangzhou-based China Southern Airlines (ZNH) posted a net loss of 4.1 billion yuan ($634 million) in Q1 2021, a notable decrease compared to the 6 billion yuan ($927 million) loss/profit during the same period in 2020.
Additionally, while trying to apply cost-cutting measures and revive the airline from the ongoing crisis, the senior executive of China Southern Airlines (ZNH) raised doubts about certain wide-bodies fate, indicating the airline’s possible retirement of the Airbus A380 aircraft.
“The largest aircraft in our fleet, such as the Airbus A380, are still under our consideration on how we can solve this problem,” senior vice president of China Southern Airlines (ZNH), Guoxiang Wu said during the CAPA Live event on April 14, 2021.
Shanghai-based China Eastern Airlines (CIAH) (CEA) posted the smallest financial loss compared to other China's ”Big Three” air carriers. The country’s second-largest airline by passenger number reported a net loss of 3.8 billion yuan ($587 million) in the period from January to March 2021.
