May 22, 2020 06:47 PM

Charts of the Day: China’s Airlines Bank on Travel Revival After First Quarter Carnage

China’s aviation industry is starting to recover as travel controls loosen around the country, but major airlines are nursing battered balance sheets showing their worst first quarter results from the impact of Covid-19.

The three biggest state-owned airlines — Air China Ltd., China Eastern Airlines Co. Ltd. and China Southern Airlines Co. Ltd. — all suffered revenue slumps of 300% in the first quarter compared with the same period last year.

The number of travelers being serviced by the aviation sector has gradually recovered to half pre-virus levels, with around 800,000 passengers traveling daily since May 5. The figure had plummeted in mid-February to less than 200,000, data from flight status tracking website indicates.


Gong Yiting, marketing manager at Veriflight, told Caixin that airports in developed cities were performing better than those at tourist hotspots, suggesting business trips were the main driver of the rise in air traffic.

There was a noticeable surge of passengers after all provincial-level regions downgraded their public health emergency response from the highest level during the five-day holiday starting May 1, Veriflight data showed.

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This unleashed waves of visitors around China wanting to enjoy fresh air after months of lockdown travel bans.

Travelers booked around 60% of aircraft capacity in May, confirming Civil Aviation Administration of China predictions earlier in the month that patronage would be below 70% for the Labor Day holiday.


With fewer passengers per plane, airlines’ first-quarter financial reports were not as healthy as before the outbreak. They suffered net losses ranging from 4 billion yuan ($561 million) to 5 billion yuan, according to the latest company quarterly reports.

A Covid-19 lockdown travel market plus the need to pay ticket refunds bled airline cash flows beyond the limits during the period.


There were more cash outflows than inflows on the airlines’ balance sheets, pushing them to take short-term loans and to issue super short-term commercial paper — a term used for debt with maturity of 270 days or less — to ease the cash crunch.

Air China raised 24.3 billion yuan in April through these facilities while China Eastern Airlines brought in 27.4 billion yuan.

Hainan Airlines, the biggest privately owned, listed airline in China, fared much worse with a net loss of 6.6 billion yuan for the first quarter, further weighing on its debt-ridden parent company HNA Group Co. Ltd.

Contact reporter Lu Yutong (

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