China Eastern, China Southern, and Air China all reported Q3 losses, the effect of China’s continued strict Covid policy that reduced air travel while at the same time expenses were rising. The carriers already reported losses for the first half year. China’s Big Three see deeper red in Q3.
Air China ended Q3 with an RMB -8.668 billion net loss attributable to shareholders or RMB -28.103 billion for January to September (2021: RMB -103.2 billion). Q3 revenues were RMB 18.1 billion, 8.4 percent down on the same period of last year. Nine-month revenues were RMB 42.1 billion, which is 27 percent down year on year. Net cash flow from operating activities was RMB -4.9 billion.
Air China Group including Shenzhen Airlines flew 17.6 percent fewer revenue passenger kilometers (RPK) in Q3 at 209.2 million, while it is 43 percent down on the first nine months of 2021 at 476.8 million. The load factor was 66 percent in Q3.
The Group’s fleet consisted of 752 aircraft in late September, with 46 deliveries and 22 phasing outs this year, 19/18 next year, and 40/16 in 2024. The number of Airbus A320neo family aircraft will grow by 27 this year, by five in 2023, and by 31 in 2024, while nine A350s are scheduled for this year and five next year. COMAC is contracted to deliver ten ARJ21 this year and nine each in the coming two years.
China Southern Airlines
China Southern Airlines reported the best Q3 result, with a net loss attributable to shareholders of RMB -6.099 billion and a January-September loss of RMB -17.587 billion. The airline group attributes the lower results to “the epidemics, high oil price, RMB devaluation and other unfavorable factors.”
Quarterly revenues were up by nine percent to RMB 29.3 billion, but 10.6 percent down for the 9M periods to RMB 70.2 billion. Yet, China Southern produced positive free cash flow from operations at RMB 7.3 billion.
The group’s revenue passenger kilometers (RPK) were down by 31.8 percent for January-September compared to the same period in 2021. International RPKs were up by 3.1 percent, but regional and domestic numbers were down by 28.4 and 32.7 percent. The combined load factor was 66.3 percent, down by 6.3 percent.
China Eastern Airlines Group, including Juneyao Airlines, was RMB -9.380 billion in the red and has accumulated a 9M net loss attributable to shareholders of RMB -28.116 billion. Revenues were down by 7.28 percent to RMB 16.5 billion for Q3 and totaled RMB 35.9 billion for the year to date, in which the net cash flow from operating activities was RMB -360 million.
The overall picture is that air travel in China starts to increase again. According to data from the Civil Aviation Authority last week, the number of international passengers increased by 73.3 percent to 537.000 from Q2 to Q3 by 36.3 percent year on year.
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
In 2022, he has gone full-time freelance. Richard has been contributing to AirInsight since December 2018. He is also writing for Airliner World and Aviation News. From January 2023, he will add a part-time role with Dutch website and magazine Luchtvaartnieuws. Twitter: @rschuur_aero.