China’s Major Airlines Report Fifth Consecutive Year of Losses
The three largest state-owned airlines in Asia’s giant, China Southern Airlines, Air China, and China Eastern, recorded their fifth consecutive year of losses in 2024. Despite the global recovery of the sector in 2023, the industry in China faces multiple challenges that have prevented a return to profitability. Key factors include fierce domestic market competition, weak demand for international and business travel, supply chain issues, and the depreciation of the yuan.
Reduced Losses, But Still No Profitability
While annual losses have been significantly reduced since the peak of the pandemic, the numbers are still negative. In 2022, each airline recorded an average loss of $5 billion. By 2024, the figure dropped to $286 million per airline, reflecting a considerable improvement but insufficient to break even.
Although domestic capacity has surpassed 2019 levels, the international market has been slower to recover. As of March, international flight capacity remained 20% below the levels recorded in the same month of 2019, according to data from Flight Master and Cirium. Travel restrictions imposed during the pandemic were not lifted until early 2023, explaining the delayed recovery.
→ Three Years Without Answers: What Happened in China Eastern Airlines Flight 5735 Crash?
Financial Results of Major Airlines
Air China, with a fleet of approximately 930 aircraft, reported a net loss attributable to shareholders of 230 million yuan ($31.66 million) in 2024. This marks a 99% improvement compared to its loss of 39 billion yuan in 2022.
China Southern Airlines, the country’s largest airline by capacity, recorded a loss of 1.77 billion yuan in 2024, significantly reducing its deficit from 4.14 billion yuan in 2023. The airline cited the slow recovery of the international market, rising prices of aircraft spare parts, and the depreciation of the yuan as key detractors.
China Eastern Airlines, headquartered in Shanghai, reported a loss of 4.2 billion yuan in 2024, an improvement from 8.17 billion yuan in 2023. However, the company acknowledged that China’s civil aviation sector continues to face intense operational pressure.
An Airline Market with Declining Fares
Despite strong travel demand in Asia, airfares have fallen from the historic highs seen during the pandemic. In 2024, passenger yield, a key indicator of fares, dropped by 12.7% for China Southern and 12.4% for Air China.
According to Flight Master data, the average price of an economy-class ticket on domestic flights in China decreased by 12.1% in 2024 compared to the previous year, settling at 767 yuan (approximately $105). This price decline has squeezed airlines’ profit margins.
In the international market, tickets were 32% cheaper in 2024 than in 2023, contrasting with the 12% reduction observed across Asia, as reported by ForwardKeys.
Uncertain Outlook
While total passenger revenue increased for all three airlines, the most significant growth was seen in the international segment as seat capacity was restored.
However, HSBC warned in January that any attempt to raise ticket prices could hinder the sector’s recovery, given the weak economic outlook for Chinese consumers. Meanwhile, DBS Bank tempered its expectations for the profitability of Chinese airlines, noting that pressure on passenger yields persists due to consumers’ price sensitivity and widespread macroeconomic uncertainty.
China’s aviation industry faces a complex scenario where fierce domestic competition, the slow rebound of international flights, and macroeconomic challenges will continue to impact airline profitability in the short and medium term.
Related Topics
Avianca Begins Direct Flights Between Bogotá and Córdoba, Argentina
Dominican Republic Clarifies It Is Still Evaluating Resumption of Commercial Flights to and from Venezuela
Copa Airlines Operates Over 1,290 Weekly Flights in June: Destinations and Frequencies
Venezuela Announces Resumption of Flights with Dominican Republic After Over 10 Months of Suspension
Plataforma Informativa de Aviación Comercial con 13 años de trayectoria.