China’s top airlines post record annual losses

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Air China Thursday reported record annual losses of 38.6 billion yuan ($5.61 billion) due to falling demand, more than doubling its 2021 loss of 16.6 billion yuan.

In the past three years, Air China has reported combined losses of nearly 70 billion yuan, according to a Reuters calculation.

Shanghai-based China Eastern Airlines on Thursday said it had lost a record 37.4 billion yuan in 2022, wider than its 2021 loss of 12.2 billion yuan.

China Southern Airlines on Tuesday reported a record annual loss of 32.7 billion yuan, wider than the 12.1 billion yuan loss in 2021.

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But the Guangzhou-based airline’s management team afterwards told analysts it expected passenger demand to fully recover to pre-pandemic levels in the domestic market by May and international capacity to reach 40% of 2019 levels by the peak summer season, Daiwa analyst Kelvin Lau said in a note to clients.

Domestic flight numbers have exceeded 2019 levels since the middle of this month, according to data firm Flight Master, while international flight numbers to and from China were at about 30% of pre-pandemic levels this week, up from around 10% at the start of the year.

Data from the Ministry of Transport showed that in 2022 China’s passenger traffic fell 42.9% to 252 million people.