Chinese airlines suffer billions in losses during Covid-19 pandemic

Bloomberg

China’s big three state-owned airlines saw total losses during the Covid pandemic balloon to 127.6 billion yuan ($18.5 billion) by the end of June, as the country stuck with its zero-tolerance strategy of border restrictions and snap lockdowns.
Air China Ltd. said on Tuesday its net loss in the first six months of 2022 widened 186% to 19.4 billion yuan from the same period last year, while China Southern Airlines Co. reported a deficit of 11.5 billion yuan. China Eastern Airlines Corp. lost 18.7 billion yuan.
China Southern cited a fall in passenger revenue from domestic travel, while Air China blamed its loss on reduced capacity. A weaker yuan and high oil prices also played a part.
While the rest of the world has moved on to living with Covid and treating it as endemic, China is persisting with trying to stamp out the virus. Its borders have been largely sealed throughout the pandemic, leading to a collapse in international flights.
Domestic air services have propped up carriers, but not enough to stem losses, and lockdowns in places such as Shanghai and tourist hotspot like Sanya are major deterrents to even internal travel.
China Eastern was particularly badly hit by lockdowns in Shanghai, where it is based. The airline also had to deal with a disaster — one of its planes crashed in southwestern China in March, killing all 132 people on board. That was the country’s first fatal commercial aviation accident in more than a decade. Investigations are ongoing.
China Eastern had warned losses could reach 19.5 billion yuan in the first half. Beijing-based Air China had forecast a deficit of between 18.5 billion yuan and 21 billion yuan, while China Southern warmed it may lose 12.1 billion yuan. All three results were in-line with previous guidance.
Despite the challenges, China remains one of the world’s biggest and most important aviation markets, and the three main carriers were behind a $37 billion order for Airbus SE aircraft in July, their first major purchase since Covid-19 struck.