(Yicai) Jan. 9 -- China’s aviation regulator said it expects the nation’s airlines to return to profit this year after posting a combined loss of nearly CNY30 billion (USD4.2 billion) last year.

The industry shrank its loss by CNY187.2 billion (USD26.2 billion) in 2023, Song Zhiyong, director general of the Civil Aviation Administration of China, said at the annual National Civil Aviation Conference held yesterday. 

Chinese carriers lost CNY216 billion in 2022, with the asset-liability ratio at eight exceeding 100 percent, Song noted at last year's event, when the CAAC set a break-even goal for 2023.

For the years 2020 to 2022, the total loss at Chinese airlines is thought to run to about CNY400 billion (USD60 billion). Before the arrival of the Covid-19 pandemic, the industry had been profitable for 11 consecutive years.

Passenger traffic on domestic air routes rose 1.5 percent last year from 2019, but international flights only returned to 38 percent, according to CAAC data. The inability to fully restore international routes led to many wide-body aircraft for long-haul flights being used in the domestic market, impacting fares, aircraft usage, and load factors.

The market should improve a little on last year because of the pandemic's impact on the first two months of 2023, industry insider Lin Zhijie told Yicai. After the gradual recovery of international routes, there is relatively less excess capacity, Lin added.

Whether the industry can turn the corner this year depends on the recovery of overseas routes, industry insiders also pointed out.

The CAAC expects the international passenger market to gather momentum this year, reaching about 6,000 flights a week by Dec. 31 and recovering to about 80 percent of the pre-pandemic level. 

The CAAC has called on airlines to increase capacity investment in international routes, especially those from neighboring countries, noted Sun Wensheng, deputy director of its general department. This must be done according to market demand, and by ensuring operational safety to accelerate the resumption of international flights, Sun said.

Editor: Martin Kadiev