During the second quarter of 2019, China’s Big Three state-owned airlines—Air China, China Eastern, and China Southern—all earned profits at the operating level. So did Hainan Airlines, Juneyao Airlines, and Spring Airlines. But three of these six publicly-traded carriers—China Eastern, China Southern, and Hainan—simultaneously reported red ink at the net level, which includes interest costs, income taxes, and in some cases foreign exchange-related losses. All six meanwhile, faced a new set of realities in the Chinese airline market, including big changes in Beijing and Hong Kong, a major downturn in cargo demand, and perhaps most importantly: slowing passenger demand.
