China's top two airlines report profit after years of losses
By Sophie Yu and Brenda Goh
BEIJING (Reuters) -China Southern Airlines reported on Friday its first quarterly profit in more than three years, as a pickup in international flights complemented a recovery in its home market.
The result, coupled with similarly encouraging figures from Air China (OTC:AIRYY), is helping to fan industry hopes for the big three state carriers to finally return to profit in the second half of 2023, after years of losses brought by the COVID-19 pandemic.
China Southern, based in the southern city of Guangzhou, reported third-quarter profit of 4.2 billion yuan ($573.89 million), versus a loss of 1.0 billion yuan in the prior quarter, and a loss of 6.1 billion in the year-earlier quarter.
Meanwhile, the Hong Kong-listed shares of flagship Air China rose almost 6% in their biggest jump in four months, but gave back some gains to close up 4.7%, after the airline reported its first quarterly profit in nearly four years.
Air China booked third-quarter net profit of 4.24 billion yuan on Thursday, versus a loss of 600 million yuan in the previous quarter and 8.67 billion yuan in the year-ago period.
The third of the carriers, Shanghai-based China Eastern Airlines (OTC:CEAYY), with a smaller fleet, is set to report earnings on Monday.
Another welcome bit of news on Friday came from the aviation regulator, which said air passenger numbers in the third quarter reached 180 million, or 2.6% higher than the level in 2019 before the pandemic, and a record for any quarter ever.
However, the number of international flights, especially to developed countries, is still markedly smaller than in 2019, said Li Hanming, an independent expert on Chinese aviation.
«Those routes are the most lucrative,» Li said.
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