China Southern Airlines reports its first quarterly earnings since the start of the pandemic

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Published on 03/11/20 - Updated on 17/03/22

Southern China Airlines

The airline, one of the country's major public carriers, saw its profits increase due to strong demand for domestic travel during the summer.

Net profits amounted to RMB 711 million (USD 106.3 million) after a loss of RMB 2.9 billion in the second quarter. Its nine-month net loss amounted to RMB 7.5 billion. Its rivals China Eastern Airlines and Air China both recorded smaller losses in the third quarter than in the second despite the suspension of international flights.

At the same time, private airlines such as Juneyao Airlines and Spring Airlines became more profitable as they do not serve the international market.

 Chinese airlines benefited from the rise of the yuan against the U.S. dollar and low oil prices.

The fourth quarter is looking good, with domestic traffic reaching its highest level before the winter pandemic. Airlines are even forecasting a 19.8% increase over the previous year, operating 84,634 domestic passenger flights per week from late October to March next year.
Widebody jets on international routes are being redirected to the most popular domestic routes, resulting in downward pressure on fares.

Conversely, foreign rivals are being forced to reduce schedules with the increase in COVID-19 cases in Europe and the United States.

On the other hand, the number of weekly international flights serving mainland China from late October to March next year is expected to decrease by 96.8%, according to official data.

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