The three major airlines lost a total of more than 100 billion yuan last year, and it is expected that the domestic market demand will continue to recover this year

The three major airlines lost more than 100 billion yuan last year, and it is expected that the pressure on the aviation market will ease this year.

As of the evening of March 3, Air China Co., Ltd. (Air China, 30.SH), China Eastern Airlines Co., Ltd. (China Eastern, 601111.SH), and China Southern Airlines Co., Ltd. (China Southern Airlines, 600115.SH) have all released their 600029 annual reports. Affected by multiple unfavorable factors that exceeded expectations, such as the continuous downturn in the market, international geopolitical conflicts, the depreciation of the RMB, and high oil prices, the production and operation of the three airlines suffered severe challenges last year, with a total revenue of 2022.1860 billion yuan, a year-on-year decrease of about 68.23%; The total net loss attributable to the parent was 52.1086 billion yuan, an increase of more than 87.1 times over the same period last year.

China Southern Airlines, Air China and China Eastern Airlines are China's three major central aviation enterprises, accounting for half of the domestic business volume. In 2021, the total transport turnover of the three major airlines and their subsidiaries accounted for more than <>% of the total transport turnover of each airline.

Last year, the three major airlines lost hundreds of billions of yuan

The revenue of the three airlines last year totaled 1860.68 billion yuan, a year-on-year decrease of about 23.52%. Specifically, China Southern Airlines had the highest revenue last year, reaching 870.59 billion yuan, Air China's revenue last year was 528.98 billion yuan, and China Eastern Airlines' revenue was 461.11 billion yuan.

The net loss of the three major aircraft carriers exceeded 300 billion yuan, and the total loss last year expanded to 1086.87 billion yuan, an increase of more than 1.65 times year-on-year, equivalent to an average daily loss of 2 million yuan, and the loss reached a new high in the same period in history.

Among them, Air China suffered the highest loss last year, reaching 386.19 billion yuan. It was followed by China Eastern Airlines with a loss of 373.86 billion yuan. The lowest loss was China Southern Airlines, with 326.82 billion yuan. The losses of China Eastern Airlines, China Southern Airlines and Air China increased by 2 times, 1.7 times and 1.3 times respectively year-on-year.

According to the surging news reporter's review of past financial reports, Air China lost the total cumulative profit attributable to the parent in the six years before the epidemic (that is, from 6 to 2014), while China Eastern Airlines and China Southern Airlines lost the total accumulated profit attributable to the parent in the nine years before the epidemic (that is, from 2019 to 9).

Last year, the revenue of the passenger transport business of the three major airlines all showed a year-on-year decline. Among them, China Southern Airlines had the highest passenger revenue, reaching 600.17 billion yuan, a year-on-year decrease of more than 382%. Air China's passenger revenue was 96.350 billion yuan, and China Eastern Airlines had the lowest passenger revenue of 04.<> billion yuan. Air China and China Eastern Airlines both saw their passenger revenue drop by more than <>% year-on-year.

Regarding the decline in passenger revenue, Air China said that revenue decreased by 215.11 billion yuan due to reduced capacity input, 31.65 billion yuan due to lower load factor, and 46.55 billion yuan due to higher revenue levels.

With the further optimization of domestic epidemic prevention and control policies and entry and exit policies since the second half of last year, the civil aviation market has begun to enter the fast lane of rapid recovery.

In February this year, the investment in national shipping capacity increased significantly. Among them, the load factor of the three major central enterprise airlines of Air China, China Eastern Airlines and China Southern Airlines all exceeded 2%, a slight increase year-on-year. In addition, with the resumption of outbound travel from February 70, the capacity supply and market demand of the three airlines' international routes have doubled year-on-year. With the arrival of the new civil aviation season on March 2, the number of international flights is expected to further increase.

The cost of jet fuel is one of the most important costs for airlines. Significant fluctuations in international oil prices will have a greater impact on jet fuel prices and airline fuel surcharge revenues, which in turn will affect the company's operating performance.

Due to the comprehensive impact of rising jet fuel prices and declining fuel consumption last year, the three major aviation fuel costs continued to increase, totaling 776.62 billion yuan, accounting for more than 1/4 of the operating costs of aviation business.

In order to reduce the risk of jet fuel price fluctuations to a certain extent and protect the operation of airlines, since 2009, airlines have independently determined the standard of passenger fuel surcharge collection on domestic routes within the prescribed range.

Since February 2 last year, the fuel surcharge has been raised for six consecutive months, rising to 5 yuan/6 yuan, breaking the historical charging standard, and then lowered twice on August 100 and September 200 last year. This year, following the downward revision on January 8, it will also usher in the second reduction of the year, which will be reduced to 5 yuan/9 yuan from April 5.

Optimistic about the development of the market this year, the industry-wide goal is to achieve profitability

Air China mentioned in its annual report that in 2022, the annual losses of all operators in China's civil aviation industry reached 2160 billion yuan, exceeding the total losses of the previous two years.

On January 1 this year, the 6 National Civil Aviation Work Conference clarified that in 2023, it is expected to complete a total transport turnover of 2023.976 billion tonne-kilometers, 4 million passengers and 6.617 million tons of cargo and mail, and the overall recovery to about 2019% of the level in 75, striving to achieve breakeven.

At the end of January this year, after the three major airlines released their 1 performance forecasts, a number of airline securities representatives expressed their position to The Paper that the development of the aviation market this year is clear, and they expect the company to have relatively good performance. In addition, Tang Bing, member of the Shanghai Municipal Committee of the Chinese People's Political Consultative Conference, director and deputy secretary of the party group of China Eastern Airlines Group Co., Ltd., said in a written interview with The Paper during the Shanghai Two Sessions on January 2022 that China Eastern's work goal this year is to achieve profitability.

Speaking about the pattern and trends of the civil aviation industry, Air China mentioned in this annual report that the competitive pressure in China's aviation market is expected to ease. Domestic market demand is expected to continue to recover. In terms of policy, the reform of the civil aviation flight schedule management system and mechanism supports the tilt of core resources to the main operating companies of hub airports, guides the differentiated operation of various types of airlines in the market, and reduces homogeneous competition.

When talking about its business plan, China Southern Airlines said that it will pay close attention to policy changes, strive to ensure resources and overseas time, and resume international flights in an orderly manner. Build a product management system and develop incremental customers at Daxing Airport; Coordinate the layout of new freighter capacity, strengthen freighter return sales and belly cargo source organization.

China Eastern Airlines mentioned that it will continue to strengthen the construction of its aviation network to enhance the market competitiveness of the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Chengdu-Chongqing Economic Zone. Focus on the recovery of the international market, improve and strengthen strategic coordination with key partners, and provide support for the restart and efficiency improvement of international trunk lines.

As of the close of trading on March 3, Air China reported 30.10 yuan, up 77.3%, with a market value of 46.1542 billion yuan; China Eastern reported 5.21 yuan, up 2.16%, with a market value of 1034.7 billion yuan; China Southern Airlines reported 9.4 yuan, up 5.1297%, with a market value of <>.<> billion yuan.