China’s three major domestic airlines, Air China, China Southern Airlines and China Eastern Airlines, released their fiscal reports last week showing a steep decline on revenue above 40 percent, according to media reports from Beijing. The total loss for the three giants was 31.7 billion yuan (US$4.84 billion). The carriers said that the COVID-19 pandemic has had a huge impact on the global and domestic aviation industry with severe challenges resulting in a sharp decline on passengers.
The companies have kept afloat by reducing expenses, resuming charter flights, developing freight operations and pushing free flying packages. Now, the domestic aviation market has taken the lead in recovering although ticket prices are still at a low level.
Data showed that Air China registered the largest loss with 14.41 billion yuan in 2020, followed by China Eastern Airlines with 11.8 billion yuan and China Southern Airlines with 10.8 billion yuan. In comparison, China Southern Airlines, which has the largest fleet among the three major carriers, had the smallest year-over-year decline in revenue and the smallest loss, while Air China, the most profitable in previous years, had the highest loss in 2020.
Financial report data shows that the three major airlines have strictly controlled costs in 2020. China Eastern Airlines’ operating costs in 2020 was 70.8 billion yuan, a year-over-year decrease of 33.95 percent, followed by 33.22 percent for Air China and 30.05 percent for China Southern Airlines. Such decline in costs covers the drop of jet fuel prices, lower airport take-off and landing fees, and reduced meal and supplies which are in line with the contraction of travel demand during the epidemic.