China’s three largest state-owned carriers have reiterated warnings that their first-half financial results will take a hit from the coronavirus outbreak, even as its June passenger traffic continued to improve month on month.
In similarly-worded impact statements released together with its monthly traffic results, Air China, China Eastern Airlines and China Southern Airlines flagged the uncertainty still surrounding the global air transport industry.
China Eastern and China Southern warned that their first-half results will be “materially and adversely” affected, while Air China says its results will be “significantly” impacted.
The three carriers posted significant operating losses for the quarter ended 31 March, as the pandemic grew in magnitude. China is where the coronavirus outbreak originated in 2019, and from January was the subject of a growing list of global travel bans.
To this end, all three carriers say they are taking measures — including redeploying capacity, increasing passenger and freight revenue, and reducing costs — to mitigate the financial impact.
JUNE TRAFFIC IMPROVES FROM MAY
Across the three carriers, June proved to be another month of improved traffic results, with each carrying more passengers compared to May, and recording capacity increases. As with May, domestic traffic accounted for the lion’s share of the overall figures.
Air China flew 4.46 million passengers for the month, a 9.5% increase compared to May, but a 51.5% year-on-year decline. While domestic passengers accounted for the bulk of passengers carried, it was international passengers that saw the highest percentage increase month on month — a 40.9% uptick.
RPKs rose 10.5% compared to May, led by increases in international traffic, but offset but a drop in regional traffic. Year on year, overall RPKs dipped nearly 65%.
Capacity, measured in ASKs, saw a 11.1% increase month on month, but was still about 58% lower than June 2019.
Passenger load factor for the month fell a marginal 0.4 percentage points month on month, to 67.1%. Year on year, this was 13.5 percentage points lower.
Meanwhile, China Southern carried about 7.14 million passengers in June. This was an increase of 21.6% compared to May, but a year-on-year decline of about 41%.
RPKs rose nearly 21% month on month, but was a 53.3% decrease compared to June 2019.
ASKs for the month increased 17.2% compared to May, with international ASKs registering a dip of nearly 5% month on month. Year on year, overall ASKs shrank 44%.
June’s passenger load factor saw a month-on-month increase of 2.16 percentage points to about 69%. Still, this was nearly 14 percentage points lower year on year.
As for China Eastern, it carried 5.2 million passengers in June, a significant 25% upswing compared to May. Year on year, this was about 51% lower.
RPKs for the month increased 25% compared to May, but dropped about 62% year on year. ASKs, meanwhile, saw a 21.7% rise month on month, but a 52% decline compared to June 2019.
Passenger load factor for the month was about 66.4%. This represented a 1.8 percentage point rise compared to May, but a 16.4 percentage point year-on-year drop.
