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China's Aviation Sector Posts USD5.6 Billion First Quarter Loss; Upturn to Take Time
Chen Shanshan
DATE:  Apr 15 2020
/ SOURCE:  Yicai
China's Aviation Sector Posts USD5.6 Billion First Quarter Loss; Upturn to Take Time China's Aviation Sector Posts USD5.6 Billion First Quarter Loss; Upturn to Take Time

(Yicai Global) April 15 -- China’s civil aviation sector lost CNY39.8 billion (USD5.6 billion) in the first quarter due to disruption caused by the coronavirus outbreak, according to official figures released today, with experts saying a return to normal will take time.

Airlines accounted for CNY33.6 billion of the total loss, Xiong Jie, a spokesperson for the Civil Aviation Administration said at a press conference today.

Passenger traffic fell almost 54 percent to 74.1 million from a year earlier, while freight dropped 46.6 percent to 16.5 billion ton-kilometers, or the number of kilometers per metric ton of cargo transported.

Two airlines that released preliminary first-quarter earnings today anticipate a steep drop in income. Jinan-based Shandong Airlines expects a loss of between CNY500 million and CNY700 million (USD70.8 million and USD99 million), while Chongqing-based China Express Airlines expects to lose from CNY91 million to CNY116 million. More loss-making announcements will follow, the experts said.

February had just 20 percent of the number of passengers who travelled over the same period last year. This figure crawled up to 30 percent in March year on year and should reach 40 percent in April. However, flight bookings remain low and airlines still cannot turn a profit, Lin Zhijie, an industry insider, told Yicai Global.

In March, passenger numbers plummeted 71.7 percent year on year and cargo dropped 23.4 percent. However, freight volumes of all-cargo aircraft bucked the trend and jumped 28.4 percent, according to the CAAC.

The international spread of Covid-19 is still not under control, so it will be difficult for airlines to recover quickly, Lin said. Carriers are still only allowed a single flight to any country, and only one flight a week on each route.

The domestic market is expected to start to pick up in May and June, a staff member at China Southern Airlines said. The global market is less certain, but things should start to improve around July and August, he added.

The Chinese market should start to recover around the Labor Day holiday in May, said a marketing representative at China Eastern Airlines. For the rest of the world, an optimistic estimate would be summer.

Editors: Dou Shicong, Kim Taylor

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Keywords:   Civil Aviation,Covid-19