China’s Big Three Airlines Q1 Profits Amid Passenger Surge and Jet Orders
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China's Big Three Airlines Q1 Profits Amid Passenger Surge and Jet Orders
- China's major airlines collectively returned to profitability in the first quarter, with Air China leading at 1.71 billion ($250 million) versus a 2.04 yuan loss a year earlier.
- Air China announced a massive jet order as passenger demand rebounded strongly, offsetting soaring jet fuel prices.
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‘s three largest airlines—Air China Ltd., China Eastern Airlines Corp., and China Southern Airlines.—reported profits in the first quarter of 2024 marking a sharp turnaround from pandemic-era losses domestic and international travel demand surged.
The recovery reflects China’s aviation sector bouncing back after years of restrictions. Passenger traffic has climbed steadily since borders fully reopened in early 2023, with total trips exceeding 700 million in 2023—approaching pre-COVID levels of 660 million in 2019. Airlines carried about 168 million passengers in Q1 2024 alone, up over 20% year-over-year, driven by holiday travel and economic stimulus measures boosting consumer spending.
High jet fuel costs, which spiked globally due to geopolitical tensions and supply constraints, were a headwind—Brent crude averaged around $85 per barrel in early 2024. However, robust pricing power from high load factors (often above 80%) and government support allowed carriers to offset expenses. Air China, the flag carrier, posted the strongest results at 1.71 billion yuan ($250 million) net profit, while China Eastern and China Southern also swung to gains, though specific figures vary.
Adding to optimism, Air China disclosed plans for a massive aircraft order, likely involving dozens of wide-body jets from Boeing or Airbus, to expand capacity for long-haul routes. This comes as China aims to modernize its fleet—currently averaging 10-12 years old—and support its Belt and Road Initiative flights. Analysts project the sector’s full-year profits could reach 50 billion yuan, fueled by international expansion and lower yields stabilizing.
Challenges persist, including engine supply delays from Pratt & Whitney and lingering debt from the downturn, totaling over 800 billion yuan industry-wide. Still, the Q1 results signal sustained momentum into 2024.
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