China’s three largest airlines warned that they were far from being out of the woods, despite narrowing their losses and a pickup in passenger traffic.

The ‘Big Three’ — comprising Air China, China Eastern Airlines and China Southern Airlines — were in the red for the quarter ended 31 March, amid a revenue decline brought about by a resurgence in coronavirus cases at the start of the year, as well as tepid travel demand over the Lunar New Year period.

China Southern China Eastern_wikimedia

Source: Wikimedia Commons

China Southern and China Eastern narrowed their quarterly losses.

China Eastern notes that the “sporadic cases” in parts of China have had an “adverse impact” on air travel demand recovery.

“The global situation of Covid-19 is still severe, and China is still facing great pressure from prevention of imported cases of Covid-19,” the Shanghai-based carrier adds.

China Southern states that while domestic travel “continues to improve”, there is still “uncertainty…in pandemic trends”. It warns that its half-yearly results “will still be adversely affected”.

Of the trio, two airlines — China Eastern and China Southern — narrowed their losses for the quarter, with China Southern reporting a marginal revenue increase year on year.

Air China, meanwhile, saw its operating losses widen year on year to CNY8.7 billion ($1.34 billion). This compares to the CNY6.8 billion operating loss it reported in 2020.

The Beijing-based airline saw revenue decline nearly 16% to CNY14.6 billion, while costs fell a marginal 3% to CNY23.1 billion.

Air China widened its quarterly net loss to nearly CNY7 billion.

As for China Eastern, it reported an operating loss CNY5.6 billion for the quarter, a slight improvement compared to the CNY5.7 billion operating loss in 2020.

Revenue for the quarter fell 13.3% to CNY13.4 billion, while expenses dipped 3.4% year on year to CNY17.8 billion.

The SkyTeam carrier posted a net loss of CNY4.11 billion, a slight improvement from the CNY4.2 billion net loss reported in 2020.

Among the ‘Big Three’, China Southern reported the largest reduction in operating losses year on year. While it fared the worst in 2020, where operating losses came up to CNY7.7 billion, it was CNY5.4 billion in the red this year.

The Guangzhou-based carrier was also the only ‘Big Three’ carrier to see an uptick in revenue, albeit marginally. At CNY21.3 billion, the current quarterly revenue represented a 0.5% increase year on year.

Expenses fell 6.5% year on year to CNY27 billion. China Southern disclosed a net loss of CNY4.11 billion, narrowing the CNY6 billion net loss reported in 2020.


Apart from the ‘Big Three’, other Chinese carriers also saw their operating losses narrow for the quarter, helped by an uptick in revenue.

Hainan Airlines, the troubled Haikou-based carrier which plunged to a record loss in 2020, cut its operating losses significantly.

The airline was CNY3.3 billion in the red, compared to the CNY8.6 billion operating loss last year.

Hainan saw revenue increase 12.3% year on year to CNY7.7 billion, while costs fell nearly 20% to CNY11.2 billion.

The carrier reported a CNY2.9 billion net loss for the quarter. This compares to the CNY6.6 billion net loss it disclosed last year.

Shanghai-based Juneyao Air also narrowed its quarterly operating losses, reporting a CNY345 million loss. Revenue rose 3.2% year on year to CNY2.46 billion, while costs decreased 2.3% to CNY2.9 billion.

Low-cost carrier Spring Airlines, which is also based in Shanghai, disclosed a CNY379 million operating loss for the quarter, widening the CNY300 million loss it made last year.

Revenue fell 6.7% year on year to CNY2.2 billion, while expenses rose 2.2% to CNY2.89 billion.

The Civil Aviation Administration of China had forecast the Chinese airline industry to lose about CNY30 billion ($4.6 billion) for the quarter ended 31 March - an improvement on roughly CNY35 billion loss a year earlier - amid an improvement in “recovery momentum”.