Tourism

Increased Losses for Air Transport Industry in China


China’s three major airlines recorded losses of more than 14 billion euros last year, penalized in their huge domestic market by the zero Covid policy and restrictions on travel abroad.

For nearly three years, China has applied a very strict sanitary policy against Covid-19 with almost mandatory PCR tests, confinements, and travel restrictions. The country also virtually closed its borders between 2020 and 2023, while Chinese citizens could only travel abroad for compelling reasons. Air travel between China and other countries has been drastically reduced which affected the air transport industry.

China Eastern Airlines tripled its losses last year to 37.4 billion yuan (4.9 billion euros), China’s second-largest airline. In the spring of 2022, a two-month lockdown in Shanghai brought the two airports of the Chinese economic capital, where China Eastern is headquartered, to a virtual standstill. Last March, the company also experienced the worst air disaster in China since 1994, which dealt a blow to the company’s image.

One of its Boeing 737-800s nosedived before disintegrating against a mountainside in southern China, killing all 132 people on board. The cause of this accident is still unknown.

On its side, Air China, the emblematic airline of China, has announced losses twice as high as in 2021. They amount to 38.6 billion yuan (5.1 billion euros) for the whole of 2022 – compared to 16.6 billion yuan a year earlier.

For its part, China Southern Airlines, the largest airline in Asia by fleet size, reported 32.6 billion yuan (4.3 billion euros) of losses. They reached 12.1 billion yuan a year earlier.

After three years of restrictions, China finally resumed issuing tourist visas for foreigners in mid-March, while Chinese nationals have been able to leave their country again for tourism since January. The number of international connections however remains low for the moment and the fares are very high. Experts predict that it will take a long time until the Chinese air transport industry recovers from the acquired losses.



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