Hainan Airlines swung back into the red for its first-quarter results for 2020, joining other Chinese carriers who reported losses amid the coronavirus outbreak. 

However, the carrier, China’s fourth largest, is optimistic its financial results will improve in the second quarter, as it “adjusts its business strategy” and cuts costs further, though it did not go into further detail. 

For the three months ended 31 March, the carrier reported an operating loss of CNY8.59 billion ($1.22 billion), reversing the modest CNY1.62 billion profit it turned the same period last year. 

The carrier witnessed passenger demand collapse for the quarter, leading to a dramatic 63% decrease in revenue, which came in at CNY6.89 billion. 

Expenses fell 21.9% to CNY13.9 billion, on the back of reduced flight operations due to travel restrictions. 

It reported an attributable net loss of CNY6.29 billion for the period, a stark contrast to last year’s net profit of CNY1.14 billion. 

Hainan ended the period with lower cash and cash equivalents — CNY3.6 billion, compared to CNY5.93 billion at the start of the year. 

Hainan is the latest in a growing list of Chinese carriers to see their financial results impacted by the coronavirus outbreak, which originated from the country. 

China’s three largest carriers — Air China, China Eastern Airlines and China Southern Airlines —all posted losses for the quarter, resulting from slumps in travel demand. 

On the same day, Hainan also released its full-year results for 2019, which told a markedly different story. 

The carrier reversed its full-year loss for 2018, posting an operating profit of CNY829 million. 

Revenue for the year rose 6.8% to CNY72.4 billion, while expenses increased 4.6% to CNY76.6 billion. 

Hainan posted a modest net profit of CNY543 million, compared to 2018’s net loss of CNY3.59 billion. 

The carrier disclosed on the stock exchange separately that it will do away with planned profit distribution for its 2019 results. 

Hainan’s parent company HNA Group has been in dire financial shape in recent months, with an increased liquidity risk. It has requested the Hainan provincial government to set up a working group to look into its risk management efforts.