Airline Weekly

Daily Airline News

Chinese Airlines Warn of $7 Billion in Losses After Roller Coaster 2021

Edward Russell
January 28th, 2022 at 11:17 AM EST

Photo credit: A China Southern Airbus A321 at Macau. Flickr / Kevin Chung

The Covid-19 pandemic took a financial toll on Air China, China Eastern Airlines, and China Southern Airlines in 2021 despite early optimism that the Chinese domestic market could fully recover during the year.

In separate notices to the Hong Kong stock exchange Friday, Air China warned of a 14.5-17 billion yuan ($2.3-2.7 billion) loss in 2021. China Eastern forecast an 11-13 billion yuan loss, and China Southern an 11.3-12.8 billion yuan loss.

All three carriers pointed fingers at the pandemic for their poor financial performance during the year. Air China cited repeated “fluctuations” in domestic traffic amid changing Covid-19 restrictions that made it “increasingly difficult for [Air China] to improve its operating performance.” While China Southern cited a “sluggish” domestic travel recovery, and China Eastern the continued near-total closure of China’s borders.

Data from IATA show monthly domestic Chinese passenger traffic measured in revenue passenger kilometers (RPKs) gyrating in a way that, when graphed, looks something akin to a roller coaster. After ending 2020 near 2019 traffic levels, the market fell off to down around 50 percent in February before surpassing levels last seen two years earlier from March through May. Traffic numbers remained below 2019 levels for the balance of the year but with additional peaks and valleys. Overall, Chinese domestic traffic was down on average 24.4 percent year-over-two-years in all of 2021.

Each carrier’s individual data prove that out. China Southern — the largest domestic carrier of the three — carried 24 percent fewer RPKs last year than in 2019, China Eastern 25 percent less, and Air China 27 percent less, data from each carrier show.

And, as China Eastern noted, all three airlines have been hobbled by China’s border closures. The country’s flag carrier Air China carried just 3 percent of its 2019 international passenger traffic last year. Rising oil prices and exchange rate fluctuations also hit the carrier’s 2021 results.

China is not expected to reopen to international travelers in a significant way until at least 2023. This leaves its airlines focused on the domestic market for another year. But internal travel restrictions to keep Covid-19 at bay could produce the same demand fluctuations seen in 2021.


Already a member?

Already a member?

Up Next

Latin America

Mexico’s Viva Aerobus Announces Major U.S. Expansion

Viva Aerobus, a low-cost airline in Mexico, has announced six new routes to the U.S. from Monterrey, its busiest airport. The move follows the long-anticipated U.S. government decision to upgrade…

North America

Breeze Sees Softer Bookings as Airline Growth Outpaces Fall Travel Demand

U.S. airlines have scheduled too many flights this fall for the number of travelers, Breeze Airways founder and CEO David Neeleman said. This is pushing down airfares just as fuel…


Hawaiian Airlines Defends Tokyo Haneda Flight Rights as United Seeks to Expand

Hawaiian Airlines plans to resume all of its flights to Tokyo Haneda this winter that were suspended during the pandemic, CEO Peter Ingram said. The move comes as United Airlines…


U.S. Airlines Expect Further Easing of China Flight Limits this Winter

U.S. and Chinese airlines are eager to resume nonstop flights between the two countries following a diplomatic accord in August doubling the number allowed. They have proposed 63 weekly flights…


KLM CEO Rebukes Dutch Proposal to Tax Transit Passengers at Schiphol

KLM CEO Marjan Rintel offered a firm rebuke of a proposal in the Netherlands' legislature to tax transfer passengers at the airline's hub, Amsterdam's Schiphol airport.

Exit mobile version