China’s three largest operators have indicated that losses continued last year, blaming supply chain pressures, increased domestic competition, and a slower international recovery.
The ‘Big Three’ – Air China, China Eastern Airlines and China Southern Airlines – note in earnings guidance that while the overall recovery “gained momentum” in 2024, “operating pressures” remained.
Air China is forecasting a net loss of CNY160-240 million ($22-33 million), an improvement from its CNY1 billion net loss in 2023.
The Star Alliance carrier says it “made every effort to enhance efficiency” and “strengthened” yield management, which resulted in improved earnings.
But it flags “an increasingly complex and volatile” operating environment, and “intensified” competition in its domestic operations.
It is a sentiment echoed by China Eastern, which also saw “insufficient demand” for business trips on top of stiff competition. The Shanghai-based operator is forecasting a net loss of CNY3.3-4.3 billion, up against 2023’s CNY8.2 billion net loss.
“[The airline] enhanced its transit capacity of the hub, actively adjusted its route structure, strengthened its whole-process service control, deepened the institutional reform of its marketing services, intensified its business and finance integration as well as cost control,” China Eastern says.
China Southern was the only carrier of the three to flag supply chain “disruptions” as a challenge. The airline expects a net loss of CNY1.25-1.87 billion, compared with a net loss of CNY4.2 billion in 2023.
It notes that the cost of aircraft materials has seen “a sharp increase” in 2024. This, coupled with a “relatively slow recovery” of the international market, has led to “great operating pressures” during the year.
