Big three Chinese airlines lost $2 billion as virus kills travel

The big three state-run Chinese airlines reported a slump in earnings in the first quarter as the coronavirus upended travel demand, but there are signs the worst of the crisis is over for them.

China Southern Airlines Co. and China Eastern Airlines Corp. lost 5.3 billion yuan ($750 million) and 3.9 billion yuan, respectively, in the three Months ended March 31. Air China Ltd. posted a loss of 4.8 billion yuan for the period.

Chinese airlines are operating at about half the seat capacity they had before the virus began to impact travel in late January. While the country’s aviation market is off its lows thanks to a pickup in domestic flights as people returned to work, the recovery has a long way to go as there’s little demand for leisure trips and international traffic has screeched to a halt.

As the virus upset the pecking order of Chinese airlines, Shanghai-listed budget carrier Spring Airlines Co. at one point emerged as the nation’s biggest carrier by international capacity after the “Big Three” scaled back their operations, data from OAG Aviation Worldwide showed. Spring Airlines said it lost 227.3 million yuan in the first quarter.

Hainan Airlines Holding Co. also announced quarterly results on Wednesday. The indebted carrier, whose parent HNA Group Co. was effectively taken over by the Hainan provincial government in late February, said it lost 6.3 billion yuan in the first quarter.

Chinese carriers are adding capacity ahead of the national holidays that start Friday and run through May 5. In the past two months, more than 30% of domestic capacity has returned in China, according to Cirium.

“As many countries in Asia have passed what is hoped to be the peak of the pandemic, Cirium’s data shows trends of increased air travel capacity for the region, with intra-Asia capacity improving by 10% between April 14 and April 22,” the aviation analytics company said in a statement. “The ‘green shoots’ of recovery in China’s domestic market are a beacon of hope for the aviation industry.”