Air China, China Eastern, and China Southern predict they will collectively lose more than 30 billion yuan (US$4.65 billion) in 2020.
The state-owned carriers, known as China’s ‘big three’, blamed the loss on low market demand and a significant fall in willingness to travel, according to the Global Times.
The announcement comes in spite of strong domestic demand across the world’s second largest economy in the second half of 2020.
Although slightly hampered by outbreaks towards the end of the year, Chinese domestic travel has for the most part recorded levels not seen since pre-pandemic days. On the other hand, international traffic to China has fallen more than 80 per cent due to strict government controls, reported the Global Times.
Flag carrier Air China expects a net loss of 13.5-15.5 billion yuan for 2020, compared to a net profit of 6.41 billion yuan the year before. China Eastern predicts a net loss of 9.8-12.5 billion yuan, compared to a 3.19 billion yuan profit in 2019.
Meanwhile, China Southern, the country’s largest carrier, estimates a net loss of 7.91-10.86 billion yuan, compared to 2.65 billion yuan profit in 2019.
The three carriers’ fortunes are unlikely to turn anytime soon as local governments impose further domestic restrictions ahead of the Lunar New Year holidays. The period is typically the country’s peak travel season.