Chinese carriers cut losses in 2023, aim for return to profit this year
The Chinese aviation industry's performance improved in 2023, with losses falling amid rising demand, and the sector aims to get back into the black this year.
The industry's total losses fell by 187.2 billion yuan ($26.31 billion) last year, Song Zhiyong, head of the Civil Aviation Administration of China (CAAC), told a recent industry meeting.
Industry data showed that from 2020 to 2023, Chinese carriers lost more than 420 billion yuan. The industry-wide losses totaled 216 billion yuan in 2022 and 28.8 billion yuan in 2023, respectively.
The CAAC has set a goal of a return to the black for 2024, news outlet yicai.com reported on Tuesday.
China's huge domestic market with a population of 1.4 billion is the biggest source of potential for the industry to stop the bleeding, Qi Qi, an industry market analyst, told the Global Times on Tuesday.
Airlines could gain by increasing revenue, reducing expenditures and costs and increasing efficiency, Qi added.
Demand for the aviation sector is rising amid expanding consumption, new urbanization and rural revitalization, and domestic passenger traffic will continue to grow steadily, according to Song.
The CAAC predicted that domestic passenger traffic this year will reach 630 million trips, 7.7 percentage points higher than that in 2019, and a strong performance is likely during peak seasons such as the Spring Festival holidays, the summer travel peak and National Day holidays.
The CAAC said that in 2024, total transportation turnover, passenger volume and cargo volume are all expected to exceed the pre-epidemic levels. Year-on-year passenger growth is expected to grow by a double-digit rate.
Industry insiders said a return to profitability depends on how quickly international services resume.
The CAAC predicts that the international passenger transport market will accelerate its recovery, reaching about 6,000 flights per week by the end of 2024 - about 80 percent of the pre-epidemic level.
According to Flight Master, as of last week, international flight volumes had recovered to 64.9 percent of 2019 levels.
To increase demand, CAAC has asked carriers to increase international routes, especially for neighboring countries.
