COVID lockdowns in China hit top-three airlines hard – all post major Q2 losses

China’s three largest carriers, Eastern Airlines, Air China and China Southern Airlines have posted a combined Q2 2022 loss of 28,4 billion yuan, which was even greater than the substantial loss posted for the first quarter. The primary reason for such losses has been the ultra-strict lockdowns imposed as the COVID-19 pandemic lingers on in the country where it first originated. China has a low tolerance policy towards COVID-19 cases and despite small case number when compared to global figures, the brakes have been slammed on where domestic travel is concerned, the principal source of revenue for these three carriers, while international travel has also virtually ground to a halt as a
consequence of tight border control policies.

China Eastern Airlines, based in Shanghai has been hardest hit, posting a loss of 10.9 billion yuan for the quarter. In late March the city’s 25 million residents were told to stay at home, which resulted in the cancellation of virtually all domestic flights from Shanghai’s two airports. Based in Beijing, flag-carrying airline Air China Ltd. Posted a second-
quarter loss of 10.5 billion yuan, following on from a first-quarter loss of 8.9 billion yuan. China Southern Airlines posted a second-quarter loss of 7.0 billion yuan, up from 4.5 billion yuan in the first quarter. The second-quarter figures were based on Reuters news agency calculations given the airlines report first quarter and half-year results but do not break out the second quarter.

Total losses of the three leading airlines in the country amounted to nearly 50 billion yuan in the first half of 2022, far exceeding a total half-year loss of 16.7 billion yuan in the same period in 2021. The U.S. government said on Thursday it intends to suspend 26 China-bound flights in response to the Chinese government’s decision to suspend some flights by U.S. carriers over COVID-19 cases. It is currently estimated that international flight numbers are at less than 1% of 2019 pre-COVID levels. (£1.00 =8.08 Chinese yuan at time of publication).

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