Shares of Chinese airlines slid as three largest state-owned carriers posted record loss in Q3

 

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Shares of Chinese airport operators and airlines mostly slid on Monday after major carriers posted record losses in the third quarter.

Air China, the country’s flagship carrier tumbled 5.9%, Meilan Airport down 6.2%, China Eastern Airlines down 4.4%, China Southern Airlines down 4.3%, Beijing Airport sliding nearly 3%.

In the third quarters of the year, China’s three largest state-owned airlines – Air China, China Southern Airlines and China Eastern Airlines – made a combined 24.1 billion yuan of net loss, equivalent to a net loss of 260 million yuan per day, hitting a record high and expanding by 204.85% from a year earlier. Revenue fell 0.82% to nearly 64 billion yuan.

In particular, China Eastern Airlines reported its third-quarter net loss widened more than two times year-on-year to 9.38 billion yuan, making its net loss for the first nine months 28.12 billion yuan, the worst among the three airlines.

The poor performance was mainly due to lower demand for air travel and reduced overall capacity amid the pandemic and high jet fuel prices, which led to a sharp increase in costs, as well as foreign exchange losses for buying planes due to the weak yuan, it said.

The operating revenue of the airlines in Q3 declined 7.3% on year to 16.5 billion yuan and it recorded 35.85 billion yuan revenue in the first three quarters, only 40.79% of the same period in 2019 before the outbreak of the pandemic.

Air China made a net loss of 8.67 billion yuan in the quarter, more than doubling the level a year earlier and China Southern Airlines made a loss of 6.1 billion yuan, expanding by more than three times from a year ago.

For the first three quarters of the year, the three carriers made a combined 73.8 billion yuan of net loss.