Issue Overview
With fuel cheap, demand still strong and seat supply constrained by airport infrastructure, government policies and consolidation, Chinese airlines—at least for the time being—are winners. But China Southern seems a loser among winners. It was indeed profitable in Q2, but its operating margin was just 5% compared to 9% for China Eastern and 14% for Air China. It was alone among China’s Big Three to see margins drop y/y. And China’s Pearl River Delta region, the airline’s most important market, is among the country’s most competitive.
