Major Chinese Carriers Reveal 1st Half 2022 Financials

China’s major airlines on Friday night reported estimated huge losses in the first half of 2022, as repeated COVID outbreaks throughout the country curb the willingness of the country’s citizens to travel, and the surging fuel prices inflate the airlines’ costs.

Shanghai-based China Eastern Airlines said the estimated loss in the first half of 2022 would be 17 billion to 19.5 billion yuan ($ 2.5 billion to $ 2.9 billion). This is more than the 12.2 billion yuan ($ 1.8 billion) in the whole of 2021 and 11.8 billion yuan ($ 1.75 billion) in 2020.


China Eastern Airlines reported an estimated loss of 17 billion to 19.5 billion yuan in the first half of 2022, which is more than for the whole of 2021. Photo: Simple Flying

Industry-wide impact

The city of Shanghai was under strict lockdown for more than two months in the second quarter of the year. The impact of the lockdown is industry-wide.

The Shanghai airport authority, the state-owned enterprise that controls both Shanghai Hongqiao International Airport (SHA) and Shanghai Pudong International Airport (PVG), also reported that the estimated loss in the first half of 2022 would be more than 1.2 billion yuan ($ 177 million).

The numbers of passengers transported reported by the Shanghai airport authority are more alarming, with the totals in April, May, and June being 42,600; 57,300; and 161,300; respectively, a decrease of 98.53%, 98.58%, and 95.46% compared to the corresponding months in 2021.

With the full-scale lockdown in Shanghai lifted in early June, and the coming summer season, these figures are expected to get better in the next quarter. Still, the hopes for a recovery to the 2019 level remain distant while the country strictly maintains its zero-COVID policy.

Fellow sufferers

Beijing-based Air China, the country’s flag carrier, reported the highest estimated loss of 18.5 billion to 21 billion yuan ($ 2.74 billion to $ 3.1 billion) among three major state-owned airlines.

Air China stated its views in its report that:

“The whole global aviation industry remained in the red in the first half of 2022 due to the ongoing COVID-19 pandemic impact. In particular, since the beginning of this year, the spread of COVID-19 in China has led to a significant reduction in domestic airline investment. Investment in international routes continues to be limited. Rising oil prices and exchange rate fluctuations further aggravate the difficulty of improving the company’s benefits, and the operating performance of the main investment-related enterprises is also affected. “

The loss for the whole 2021 reported by Air China was 16.6 billion yuan ($ 2.46 billion).

Air China reported the biggest estimated loss among the big three. Photo: Getty Images

Guangzhou-based China Southern Airlines, with the largest number of aircraft among the three major airlines, reported an estimated loss of 10.2 billion to 12.1 billion yuan ($ 1.5 billion to $ 1.8 billion). The 2021 loss was 12.1 billion yuan ($ 1.8 billion).

China Southern further revealed in its report that,

“In the first half of 2022, the company’s capacity offered and (RPK) revenue passenger kilometers decreased by 34.3% and 42.6% compared to the same period last year, and 54.8% and 64.8% respectively compared with 2019.”

Second-half numbers are expected to be boosted due to the relaxation of the quarantine policy for entering China, travel demands during summer seasons, and a possible drop in fuel price.

CAAC announced on the 12th that it will provide funding of 3 billion Yuan (444 million US dollars) each to Air China, China Eastern, and China Southern.

Despite the financial troubles, the big three announced a historical order of 292 Airbus A320neos (the listed price of 37.2 billion US dollars) on the same day two weeks earlier.

Other Shanghai-based airlines, such as Spring Airlines and Juneyao Airlines, also reported a loss of 1.62 billion to 1.92 billion yuan and 1.2 billion to 1.3 billion yuan, respectively. Both airlines are privately owned and reported a profit in 2021.

Privately owned Spring Airlines reported a loss of 1.62 billion to 1.92 billion yuan for the first half of 2022, compared with a profit in 2021. Photo: Getty Images

Hainan Airlines (HNA), a former giant just completed its bankruptcy restructuring, reported a loss of 11.95 billion to 12.96 billion yuan for the first half of 2022. HNA also disclosed that the company’s net assets will be -3.25 billion to -4.26 billion yuan , meaning the company is still in insolvency status.

How do you think that Chinese airlines will perform in the second half of 2022? Please share your thoughts with us.

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