China Southern back in the black for 9M-period

China Southern Airlines is the first of China’s Big Three to have emerged from losses. The airline reported an operating profit for the first nine months while rival China Eastern and Air China narrowed their losses as air travel further recovers. The results confirm the recovery trend in China already seen in the airline's HY1 of 2023, although traffic has dropped again in September. China Southern Airlines: China Southern Airlines' 9M operating profit was RMB 3.644 billion compared to RMB -21.140 billion in the same period of 2022. The net profit attributable to shareholders is RMB 1.320 billion versus RMB -17.587 billion. Expenses were RMB 120 billion, up from RMB 94.6 billion, as the airline grew its schedule. Total revenues grew to RMB 119.5 billion from RMB 70.2 billion. China Southern carried 105.2 million passengers during the period, of which 98.2 million on domestic routes. This represents a 93 percent increase year on year. The 5.9 million passengers on the international is even an 1.036 percent increase year on year, while pax numbers on regional services grew by 1.122 percent to 1.1 million. Cargo carried was up 2.9 percent to 5.8 million In Q3, China Southern produced a net profit of RMB 4.195 billion and revenues of RMB 47.661 billion. Noteworthy is that after carrying more passengers month by month, September has seen a cumulative drop of 14.7 percent in September to 12.1 million passengers. Regional and domestic saw the biggest drop by 17.3 and 15.3 percent to 134K and 10.9 million respectively, while international reported a 6.4 percent drop to just over one million. Capacity (available seat kilometers) were also down in September, by 10.3 percent to 27.7 million. 9M ASKs were up by 85.9 percent to 233.3 million. During Q3, China Southern grew the net fleet by six aircraft to 903, having taken delivery of two aircraft in July, five in August, and two in September. This includes five Airbus A320neo family aircraft, one A350, and three COMAC ARJ21s. Air China: Air China announced an operating loss of RMB -429.9 million for the first nine months, a huge improvement over RMB -33.346 billion in the same period last year. The net profit attributable to shareholders was RMB 791.4 million, up from RMB -28.103 billion. Operating costs totaled RMB 111.9 billion, up from 76.9 billion. For Q3, the net profit was RMB 4.065 billion and total revenues RMB 45.9 billion. Air China carried 95.6 million passengers during the first nine months, up 149.1 percent year on year. Of them, 89.3 million flew on the domestic network (+135.7 percent), 4.1 million on the international network (+1.730 percent), and 2.2 million on regional routes (+677.3 percent). ASKs were up by 71.3 percent to 26.7 million. Cargo was 2.6 percent down to 18.6 million. But Air China saw the same drop in passenger numbers in September as the other carriers. Total passengers carried dropped 17.3 percent versus August to 10.9 million, again on domestic (-17.6 percent to 9.9 million) and regional routes (-29.5 percent to 592K). International was down 6.2 percent to 783K. The fleet stood at 899 aircraft by the end of September, down from 902 on June 30. The A350 fleet grew by two aircraft and the ARJ21 fleet by two, but Air China reduced the number of A330s by two and 737s by four. The number of A320 family is static at 348, but the airline grew the number of self-owned aircraft by seven to 158 as it reduced the number on financial lease by the same number. Air China is expecting 37 new deliveries this year, including twelve MAX 8s, nine A320neo family, nine ARJ21s, and seven A350s. For 2024, the fleet plan sees 63 deliveries, including 29 A320neo family, 24 MAX, and nine ARJ21s. In 2025, the number is 40: 33 A320neo family, five Boeing 787s, and two ARJ21s. In the next three years, 39 aircraft will be phased out. China Eastern Airlines: China Eastern Airlines produced a RMB -3.206 billion operating loss for January-September compared to RMB-30.042 billion in 2022. The net loss was RMB -2.607 billion, down from RMB -28.116 billion. Revenues increased to RMB 85.538 billion from RMB 35.850 billion. Operating expenses totaled RMB 92.563 billion versus RNB 68.218 billion. For Q3, China reports a net profit attributable to shareholders of RMB 3.642 billion and revenues of RMB 36.113 billion, up 118.9 percent. China Eastern carried 86 million passengers during the 9M period, up from 33.8 million last year. 79.2 million flew on the domestic network, 4.0 million international, and 1.7 million regional. ASKs were up by 133.7 percent to 178.5 million. In contrast to its rivals, China Eastern reports no drop for September and has seen a continued recovery of passenger numbers during Q3. The fleet counted 781 aircraft by the end of September, down by one on June. The narrowbody fleet was down by two to 660, the widebody fleet up by one to 104, and the regional fleet static at 17. The 9M results filing doesn’t share the fleet plan for the coming years. China Eastern recently announced an order for 100 COMAC 919s.

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