China Eastern Airlines has warned that the world’s geopolitical and macro-economic situation could have a “relatively significant impact” on the aviation sector, in turn affecting its operating results. 

The frank assessment came as China’s three largest carriers – which also includes Air China and China Southern Airlines – released their full-year results. China Eastern was the only operator among the ‘Big Three’ to remain loss-making, despite China’s pandemic restrictions having been loosened for a full year.


Source: Wikimedia Commons

China Eastern was only one of country’s Big Three carriers to be loss-making in 2023.

In its results, Shanghai-based China Eastern was alone among the trio to flag the potential impact of geopolitical conflict – a pointed reference to ongoing tensions between China and the West – on its operations. 

“[International] economic and trade relations, geopolitical conflict or war will have a relatively significant impact on the demand for aviation market…In addition, above-mentioned risks may drive large fluctuations in the prices of energy and other large commodities, thereby affecting the global economic activities and causing greater impacts on the Group’s operating results and financial condition,” the SkyTeam carrier writes. 

Neither Air China nor China Southern referenced geopolitical risks in their results. 

In its filing, China Southern only states: “Facing the complex and severe domestic and international situation, the group will be prepared to respond to various risks and challenges, comprehensively advance high-quality development to ensure sustainable and high-quality safety.” 

For the year ended 31 December 2023, China Eastern reported an operating loss of CNY1.9 billion ($263 million), a significant reduction from 2022’s record CNY31.6 billion loss. 

The airline more than doubled revenues year on year, to CNY114 billion, with passenger revenue sharply improving following the reopening of borders. According to China Eastern, international passenger revenue showed the highest increase: more than three times higher compared with 2022’s lower base. 

China Eastern and its subsidiaries carried close to 120 million passengers in 2023, more than twice the number in 2022. Domestic capacity exceeded pre-pandemic levels, but international ASKs remained significantly below that of 2019, at just 44%. 

China Eastern recorded full-year operating expenses of CNY121 billion, up 49% year on year. It attributes the rise in costs to an increase in passenger operations, but flags fuel prices as “one of the most substantial parts” of its full-year expenses. 

Fuel-related expenses rose almost 85% year on year, making up about a third of total expenses. 

The airline reported a net loss of CNY8.2 billion for the year, narrowing from the CNY37.3 billion loss in the year-ago period. 

Meanwhile, compatriots Air China and China Southern eked out operating profits in 2023, as revenue growth far outpaced cost rises. However, they still posted net losses for the year, after  taking into account hefty finance costs and exchange losses. 

Beijing-based Air China reported a full-year operating profit of around CNY2.9 billion, a significant swing from 2022’s CNY35.4 billion loss. 


Source: Wikimedia Commons

Operating revenue more than doubled to CNY149 billion, led by an increase in passenger revenue. Operating expenses rose about 59% year on year to CNY145 billion, with the sharpest increases seen in jet fuel costs and take-off and landing charges. 

The Star Alliance carrier posted a net loss of CNY1 billion, significantly reducing 2022’s CNY38.6 billion net loss. 

As for China Southern, it recorded a full-year operating profit of CNY5.6 billion, compared to 2022’s CNY33.7 billion operating loss. 

Full-year revenue rose 83.7% to CNY160 billion, as passenger travel revenue doubled year on year. The airline notes that the improvement in domestic revenues outpaced international travel revenue, despite borders being reopened in 2023. 

Expenses rose about 38% year on year to CNY159 billion. Like its compatriots, flight operation expenses, which included fuel costs, made up almost half of full-year expenses. 

China Southern reported a net loss of CNY4.1 billion, improving on the CNY32.7 billion loss in the year-ago period.