On the evening of October 30, China Eastern Airlines (600115) and HNA Holdings (600221) disclosed their third quarterly reports. So far, the A-share listed airlines have published their third quarterly reports in 2022.
Up to now, China Eastern Airlines, Air China, HNA Holding and China Southern Airlines have occupied the top four net losses in the third quarterly reports of A-shares. Including Juneyao Airlines, Spring Airlines and China Airlines, the seven A-share listed passenger airlines lost a total of more than 100.8 billion yuan.
It is worth mentioning that starting from today (October 30), China Civil Aviation will start the season of winter and spring flights. With major airlines gradually recovering and encrypting multiple international routes, brokerages predict that the demand recovery will move forward with twists and turns, and the new flight season may be worth looking forward to.
China Eastern Airlines loses the most
The latest financial report shows that China Eastern Airlines has a net loss of 9.38 billion yuan in the third quarter of this year, and a net loss of 28.116 billion yuan in the first three quarters.
The performance has slightly exceeded Air China’s loss level. Earlier (on the evening of October 28), Air China released its third quarterly report. The company reported a net loss of 8.668 billion yuan in the third quarter and a total net loss of 28.103 billion yuan in the first three quarters.
HNA Holdings disclosed its first financial report after taking off its hat in September. The company had a net loss of 8.002 billion yuan in the third quarter and a total net loss of 20.839 billion yuan in the first three quarters.
China Southern recorded a net loss of 6.099 billion yuan in the third quarter, and accumulated losses of 17.587 billion yuan in the first three quarters.
In addition, the low-cost airline Spring Airlines had a net loss of 490 million yuan in the third quarter and a loss of 1.737 billion yuan in the first three quarters; the regional airline Juneyao Airlines had a net loss of 1.083 billion yuan in the third quarter and a net loss of 2.973 billion yuan in the first three quarters; Regional airline China Airlines posted a net loss of 558 million yuan in the third quarter, and a loss of 1.509 billion yuan in the first three quarters.
In addition, the B-share listed airline company *ST Shandong Airlines B disclosed that in the first three quarters of this year, the company’s net loss was 5.317 billion yuan.
Multiple factors put pressure on performance
“Mainly due to the impact of the new crown pneumonia epidemic, the passenger market demand has declined, and the overall capacity has decreased. At the same time, the price of jet fuel is at a high level, the cost of jet fuel has increased significantly compared with the same period last year, and the depreciation of the renminbi has caused exchange losses. The operating performance declined.” China China Eastern explained in the third quarterly report.
HNA Holdings also stated that the decline in performance was mainly due to the decline in the company’s production and operation business, the increase in operating losses, and the increase in exchange losses caused by exchange rate fluctuations affected by the epidemic from January to September 2022.
Combined with other listed airlines, declining demand, high oil prices and the depreciation of the Chinese yuan are the consistent reasons for the continued loss of the airlines in the third quarter.
On the cost side, the cost of jet fuel is the most important cost item for airlines. Affected by geopolitical conflicts, oil prices rose by 76% compared with the same period last year, which brought greater cost pressure to airlines.
In terms of exchange rates, the RMB has depreciated against the U.S. dollar this year, causing the exchange gains and losses of major airlines to change from net gains in the same period last year to net losses.
For example, HNA Holdings has been largely dragged down by exchange rate fluctuations. The reporter learned from HNA Holdings that the foreign exchange losses of HNA Holdings accounted for nearly 40% of its losses. The company also stated that the loss was caused by fluctuations in the exchange rate of the RMB against the U.S. dollar, which would not lead to the current outflow of cash flow of the company, and the loss would be reduced with the appreciation of the RMB in the future.
The performance of the new sailing season may be worth looking forward to
Today, China’s civil aviation ushered in the winter and spring flight season. At the previous press conference held by the Civil Aviation Administration on October 26, Xu Qing, deputy director of the Transportation Department of the Civil Aviation Administration, introduced that China Civil Aviation will implement the 2022/23 winter and spring from October 30, 2022 to March 25, 2023. Season flight schedule. In the winter and spring air season this year, a total of 127 domestic and foreign airlines plan to arrange 104,573 passenger and cargo flights per week (one take-off and landing counts as one, the same below).
Recently, a number of airlines have successively released flight plans for the winter and spring seasons, announcing the resumption and encryption of a number of international routes.
According to the Civil Aviation Resources Network, the flight plans announced by the three major state-owned airlines show that Air China, China Southern Airlines and China Eastern Airlines respectively plan to implement 52, 42 and 42 international routes in the new season, with a total of 136 international routes.
Hainan Airlines will fly 10 international routes in the new season. After the season change, HNA Holdings will continue to operate Beijing-Brussels, Beijing-Moscow, Beijing-Belgrade, Beijing-Berlin, Beijing-Manchester, Chongqing-Rome, Chongqing-Madrid, Shenzhen-Vancouver, Dalian-Tokyo, and Dalian-Seoul. Round-trip international passenger routes, and at the same time increase the frequency of Chongqing-Rome international flights to twice a week.
In addition, Air China, China Eastern Airlines, China Southern Airlines, Hainan Airlines and other major airlines saw significant growth in passenger capacity investment and passenger turnover in the international segment in September, which also shows that international routes are gradually picking up.
With the arrival of the new flight season, many brokerages reminded to pay attention to the demand release brought about by the restoration of international routes.
For example, Zhongtai Securities released a research report on October 29, saying that demand recovery is moving forward with twists and turns, and the new flight season may be worth looking forward to. On October 30, the winter and spring flight seasons of civil aviation are about to start, and many airlines will usher in new and encrypted routes, which is expected to stimulate the release of demand. On the whole, the marginal improvement of weak aviation demand is more certain, and the bottom of demand has been seen in the second quarter. The research report is optimistic about the recovery of demand, and recommends active deployment. In the medium and long term, the growth rate of supply will slow down, the recovery of demand will accelerate, and the elasticity of ticket prices may become more prominent, and the long-term investment value of the sector will be more certain.Return to Sohu, see more
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