Major state-owned Chinese carriers Air China, China Eastern Airlines, and China Southern Airlines all posted losses during the third quarter ended on 30 September, with the impact of COVID-19 taking a toll for the period when the summer travel season is traditionally at its peak. But for reasons that will remain unexplained, all three carriers did not provide a detailed breakdown of their performance for the quarter as compared to previous years. China’s Big Three all post third-quarter losses

Beijing-based Air China posted an attributable net loss of RMB 3.54 billion for the third quarter, far higher than the RMB 508.4 million net loss for the same quarter in 2020. Revenue was up 5.2 percent year-on-year to RMB 19.8 billion. 

At Shanghai-based China Eastern Airlines, attributable net loss came in at RMB 2.95 billion, more than triple the RMB 563 million net loss for the same quarter in the previous year. Revenue for the three months grew 3.6 percent to nearly RMB 17.8 billion. 

The Guangzhou-based China Southern Airlines reported an attributable net loss of RMB 1.43 billion in the third quarter of 2021, reversing the RMB 711 million attributable net profit for the same quarter last year. Revenue was up 2 percent year-on-year to RMB 26.9 billion. 

All three carriers blamed the COVID-19 pandemic, the rising cost of fuel, and fluctuations of the Chinese renminbi for their poor results. 

However, China Southern was most explicit on the impact of COVID-19 on the demand for air travel: “the COVID-19 pandemic burst out in multiple places, which had a sustainable impact on summer travel peak”. All three disclosed more details in their half-year results last August.

Mixed performance for the nine-month period

In comparison to the third-quarter results, all three carriers provided more information on their results for the nine-month period to 30 September. Both China Eastern and China Southern saw improvements in their losses, whereas Air China had a slight increase in its loss.

Air China posted an operating loss of RMB 14.6 billion, up 2 percent year-on-year, from the RMB 13.6 billion loss from the previous year. Revenue for the nine months grew 5.2 percent to nearly RMB 57.5 billion. Attributable net loss climbed 2 percent to RMB 10.3 billion.  Its cash and cash equivalents saw a slight dip to RMB 8.77 billion on 30 September 2021, down from the RMB 9 billion figure on the same date in 2020.

China Eastern’s operating loss narrowed 11.2 percent to RMB 11.6 billion, as compared to the RMB 13 billion figure for last year. Revenue jumped 24.1 percent to RMB 52.5 billion. The attributable net loss saw a 10.4 percent year-on-year improvement to nearly RMB 8.16 billion.  The carrier’s and cash equivalents amounted to RMB 10.8 billion as of 30 September 2021, up from the RMB 9.06 billion figure in September 2020.

As for China Southern, operating loss for the nine-month period came in at RMB 7 billion, which was an improvement from the RMB 11.2 billion loss for the same period last year. Revenue grew 20.1 percent to RMB 78.5 billion. Attributable net loss came in at RMB 6.12 billion, an 18 percent year-on-year improvement. Meanwhile, cash and cash equivalents as of 30 September 2021 amount to nearly RMB 22 billion, an increase from last year’s RMB 16.4 billion figure.

While both China Eastern and China Southern did not provide any comment for their nine-month results, Air China says it will work towards mitigating the impact of COVID-19.

The Group will continuously strengthen market research and judgement, keep abreast of the changes in demand, dynamically adjust the deployment of transport capacity and implement strict cost control, all in an effort to reduce the impact of the pandemic on the operation,” says Air China.

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