China’s three largest carriers have warned of deeper financial impact from the coronavirus outbreak, as they each swung to significant first-quarter losses.
Air China, China Southern Airlines and China Eastern Airlines all warned of “adverse” and “severe” impact on their first-half financial results, pointing towards “uncertainty” in the development of the pandemic.
China Southern notes that while demand for domestic air travel has “recovered to a certain extent” as a result of the Chinese government’s measures to control the outbreak, international passenger traffic is still in the doldrums, given the growing list of travel restrictions.
Echoing these sentiments, compatriot China Eastern states: “[There] is still great uncertainty in the time span and severity of the epidemic around the world, which may magnify the impact on or result in a delay in the recovery of travel demand.”
Their grave warnings come as each reported their financial results for the quarter ended 31 March. China was where the coronavirus outbreak originated in late December 2019, and from January was the subject of a growing list of global travel bans.
For the period, each carrier saw revenue nearly halved on the back of falling travel demand.
Of the three carriers, China Southern fared the worst, posting an operating loss of CNY7.73 billion ($1.09 billion). This contrasts with the CNY3.55 billion profit it reported for the same period in 2019.
Revenue fell 43.8% to CNY21.1 billion, while expenses dropped 16.6% to CNY28.9 billion.
The carrier reported an attributable net loss of CNY5.3 billion for the period.
China Eastern, meanwhile, posted an operating loss of CNY5.69 billion, reversing its operating profit of CNY2.8 billion for the year-ago period.
Revenue shrank 48.6% year-on-year to CNY15.5 billion, while expenses decreased 28.2% to CNY18.5 billion.
The Shanghai-based carrier’s attributable net loss for the period came in at CNY3.93 billion, compared to a net profit of CNY2 billion in 2019.
Air China reported an operating loss of CNY6.79 billion. For the same period in 2019, it posted an operating profit of CNY3.98 billion.
The carrier saw revenues plummet 47% year-on-year to CNY17.3 billion, while expenses fell nearly 20% to CNY23.8 billion.
It reported an attributable net loss of CNY4.8 billion for the period.
Earlier this year, the three Chinese carriers had already warned of “substantial losses” for their first-quarter results, as a result of the impact of the coronavirus outbreak.