China's Airlines Struggle Amid Slow International Travel Rebound

China's leading state-owned airlines have reported significant net losses for the first half of the year. Factors such as slow international travel recovery, domestic oversupply, and intense global competition have contributed to the financial strain, despite some improvement in comparison to last year.

China's foremost state-owned airlines have faced significant financial setbacks in the first half of the year, primarily due to slower-than-expected international travel recovery, domestic oversupply, and increasing global competition as aviation capacity bounces back worldwide.

Air China, the nation's flagship carrier, posted a net loss of 2.78 billion yuan ($392 million) for the first half of the year, an improvement over last year's 3.45 billion yuan loss during the same period. Meanwhile, China Southern Airlines reported first-half net losses of 1.23 billion yuan, a notable reduction from the 2.9 billion yuan loss in the previous year. The airline had managed to turn a profit of 760 million yuan in the first quarter.

Despite a resurgence in international traffic, with passenger numbers reaching over 80% of pre-pandemic levels, Air China revealed that North American routes remain sluggish, hindered by political issues and diminished demand. This trend is substantiated by flight schedule data, which indicates a substantial reduction in flights between China and the United States compared to 2019 levels. The recovery in outbound travel is hampered by a faltering economy and strong domestic travel preferences, although there are signs of increased market share for Chinese airlines in the international arena.

(With inputs from agencies.)