China’s Big Three financial data: who has the upper hand?

China’s Big Three airlines, namely Air China, China Southern Airlines (ZNH) and China Eastern Airlines (CIAH) (CEA), expect to report losses for the second year in a row. But which airline has the upper hand in terms of financial data? 

Among China’s three largest airlines, Air China is expected to perform the worst. China’s flag-carrier estimated that it will accumulate a net loss between 14.5 billion to 17 billion yuan ($2.3 billion to $2.7 billion). In comparison, the airline reported a net loss of 14.4 billion yuan ($2.3 billion). 

It is worth noting that full-year 2021 financial figures are preliminary, while 2019 and 2020 financial data are fixed. Companies will update their financial figures in an annual report for 2021.

Meanwhile, Shanghai-based China Eastern Airlines (CIAH) (CEA) anticipates a net loss of between 11 billion to 13.5 billion yuan ($1.7 billion to $2.1 billion). In 2020, the carrier reported a net loss of 11.8 billion yuan ($1.9 billion). 

China Southern Airlines (ZNH), China’s largest airline by fleet size, expects to report a net loss of between 11.3 billion to 12.8 billion yuan ($1.8 billion to $2 billion). This compares to an 11.7 billion yuan net loss ($1.8 billion) in 2020.  

The negative financial estimates are largely attributed to low international travel demand, fluctuating passenger traffic on domestic routes and rising oil prices by all three state-owned airlines.  

Air China announced in a statement: “The capacity input in international routes continued to be limited, and the passenger traffic for domestic routes fluctuated greatly, making it increasingly difficult for the company to improve its operating performance. The rising oil price and exchange rate fluctuations had further intensified operating difficulties of the company.” 

In order to tackle the cost issues and maximize operating performance, China’s Big Three carriers focused on cargo operations and resource planning. 

In a contrast to all three airlines, China’s fourth largest carrier, Hainan Airlines, which recently exited restructuring, expects to report a 2021 net profit estimated between 4.5 billion and 6.2 billion yuan ($708 million to $975 million).