Losses mount at China’s big three state-owned airlines as zero-Covid policy deters travel
- Since the start of the pandemic, combined losses at Air China, China Southern and China Eastern have reached US$18.5 billion
- The three carriers placed a US$37 billion order for Airbus aircraft in July
China’s big three state-owned airlines saw total losses during the Covid-19 pandemic balloon to 127.6 billion yuan (US$18.5 billion) by the end of June, as the country stuck with its zero-tolerance strategy of border restrictions and snap lockdowns.
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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.
That was the country’s first fatal commercial aviation accident in more than a decade. Investigations are ongoing.
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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 warned 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 US$37 billion order for Airbus aircraft in July, their first major purchase since Covid struck.
