China’s commercial aviation industry posted losses of CNY108.9 billion (US$16.2 billion) in the first six months of the year, according to the latest data from the Civil Aviation Administration of China (CAAC). The losses were more than the full-year losses in both 2020 and 2021 as China continues to maintain a harsh zero-COVID national policy that has decimated air travel.
The CAAC said at one point there were only 2,967 flights a day, just 17.8 percent of the same period in 2019. In the six months ended 30 June, revenue plunged 41.8 percent from the same period last year to CNY307.2 billion (US$45.7 billion), less than a third of what the industry was earning in 2018 and 2019. Accumulated losses since the start of the pandemic in early 2020 are now approaching CNY300 billion (US$44.7 billion), CAAC officials said.
There are 12 airlines that are technically bankrupt with a debt-to-asset ratio of 100 percent, officials said and the overall gearing ratio of Chinese carriers has reached 82.2 percent, up 11.9 percentage points from pre-pandemic times, according to published reports. The sharp rise in international oil prices and the depreciation of the Chinese yuan against the US dollar is also hurting the industry and airlines spent an extra CNY22.2 billion (US$3.3 billion) on fuel in the first six months compared with the same period last year. Passenger numbers sank 36.7 percent from the same period in 2019 to 118 million. Cargo and mail transport plunged 87.5 percent to 3 million tonnes. Transport turnover plummeted 46.7 percent to 29.3 billion tonne-kilometres and the number of daily flights halved to around 8,000 flights.
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