According to Chinese media outlet Yicai, Song Zhiyong, Chairman at China National Aviation said at the national aviation mid-year performance teleconference held on July 8, that the national civil aviation industry’s overall loss has reached more than 16 billion dollars in the first half of 2022, and 12 airlines are bankrupt as the liability-asset ratio have exceeded 100%.
Before the COVID-19 pandemic started in 2020, China’s civil aviation industry made profits for 11 consecutive years. The total profit in 2019 was $8.2 billion. However, since the outbreak, the cumulative loss has reached about $45 billion.
The report also noted that the industry’s operating income in the first half of the year was only $45.8 billion, a decrease of 48% from the same period before the pandemic. In 2018 and 2019, the operating income of the industry exceeded $150 billion.
In addition, the number of daily flights have dropped to its lowest point, with only 2,967 flights per day, equivalent to 17.8% of the same period in 2019.
Radio Free Asia, citing official data, reported that due to the limited number of international routes and air passenger market downturn, the ratio of domestic to international passenger traffic has changed from 8:1 before the pandemic to 202:1 as of now.
Under the strict implementation of international flight circuit breaker measures, 990 international flights have been canceled in the first half of 2022.
Apart from falling revenue, China’s civil aviation industry has also faced pressure from increasing costs. As international oil prices increase sharply, fuel costs in the first half of this year have surged by $3.3 billion from the same period last year. The annual increases are projected to reach as high as $12.8 billion.
Moreover, the devaluation of yuan against U.S. dollars has further increased the exchange losses by $2.5 billion year on year.
As a result, Song Zhiyong said that policy adjustments will be made in the second half of 2022.