Latest News

Top Chinese airline companies' profits fall as flagging economy pressures fares

China's leading three stateowned airline companies reported profit decreases in the third quarter regardless of record summer season passenger numbers and fuller planes than in 2015, as a downturn in domestic economic growth presses flyers to look for less expensive fares.

Beijing-headquartered Air China on Wednesday reported a net profit of 4.14 billion yuan ($ 581.34 million) in the quarter, below 4.24 billion yuan a year previously.

China Eastern Airlines on the very same day published a. net revenue of 2.63 billion yuan, down 28.2% year on year.

The country's largest airline company China Southern. said on Monday there was strong demand in the aviation market. however reported a 23.9% year-on-year drop in third-quarter web. revenue to 3.19 billion yuan.

China Southern added 11% more capability to its operations. over the quarter compared to the year before and planes were on. average fuller than last summer season, airline company information shows. However,. operating profits for the quarter increased simply 4.6%, indicating a. decrease in ticket prices.

Airlines internationally have actually been seeing steady demand but. overcapacity and sluggish yields as a post-pandemic travel boom. eases off and most planes are back in the skies.

China has actually been slower than the rest of the world to return. capacity to the marketplace due to a later lifting of pandemic travel. constraints in early 2023. Domestic capacity is greater than in. 2019, however international flights have been particularly slow to. ramp back up.

The substantial lag between increased capacity and. bottom-line growth indicates that conditions are more austere. ( in China) than the slowdown experienced somewhere else, said a. current note from Ishka, an air travel data and advisory business.

Chinese consumers are suppressing costs as a property crisis. drags on and youth joblessness stays high, regardless of Beijing's. efforts to increase development through economic stimulus bundles.

China's financial downturn does not extra airlines, even if. they have leveraged the continuing return of post Covid capability. to at least draw back from the unsustainable losses sustained. throughout Covid affected years, Ishka wrote.

In July and August, the typical domestic airfare in China. was 17% lower than last year and 1% below 2019 levels,. China-based aviation information firm FlightMaster said.

International fares were 25% lower than last summer season and 12%. lower than in 2019, FlightMaster said.

Another air travel information firm, ForwardKeys, said outbound. airlines tickets from China between January and September were 39% lower. year-on-year.

The huge three airlines saw their very first quarterly revenues. because 2019 in the busy summer months of last year's third. quarter but fell back into losses in the subsequent winter season low. season that begins this week in regards to flight schedules.

China's air travel regulator stated in September that during. July and August traveler numbers were 12% higher than the very same. period in 2015, and 18% greater than pre-COVID levels.

China's largest low-cost provider, independently owned Spring. Airlines, returned to benefit earlier than. full-service competitors China Southern, China Eastern and Air China. after the pandemic.

On Wednesday, Spring reported a 32.4% year-on-year decline. in net earnings to 1.2 billion yuan.

(source: Reuters)