On May 31, the latest data released by the Civil Aviation Administration of China showed that the entire industry suffered losses of 21.07 billion yuan (RMB) in 2023, bringing the total accumulated losses of China’s civil aviation industry to 420 billion over the past four years.
The Civil Aviation Administration of China released the “2023 Civil Aviation Industry Development Statistics Bulletin” on the 31st, which revealed that the industry’s operating income for 2023 was 1.02373 trillion yuan, a year-on-year increase of 68.3%, with losses amounting to 21.07 billion yuan. Among these, airline companies generated revenues of 676.10 billion yuan but suffered losses of 5.88 billion yuan. Airport units had operating revenue of 101.98 billion yuan, with losses of 19.89 billion yuan, while support enterprises had operating revenue of 245.65 billion yuan and profits of 4.70 billion yuan.
According to data previously released by the Civil Aviation Administration, in 2020, the entire civil aviation industry incurred losses of 97.4 billion yuan, with airline companies accounting for 79.4 billion yuan of those losses. In 2021, the industry saw losses of 84.2 billion yuan, of which airline companies bore 67.1 billion yuan. By 2022, the losses jumped to 217.4 billion yuan for the industry as a whole, with airline companies reporting losses of 177.1 billion yuan. Cumulatively from 2020 to 2023, the industry has accumulated staggering losses of 420.1 billion yuan, and airline companies alone have suffered losses totaling 329.6 billion yuan.
The mainland’s well-known financial author “Wings of Civil Aviation” commented on June 1 that compared to other industries, civil aviation is relatively small with an annual industry income of just over a trillion yuan. Some industry giants can surpass the total income of the entire civil aviation industry with just one company. The unprecedented loss of 420 billion yuan over four years for an industry of this scale is indeed remarkable.
“Wings of Civil Aviation” believes that the Chinese civil aviation industry is still facing a significant crisis. Firstly, over the past four years, no Chinese airline company has gone bankrupt, meaning there has been no industry reshuffle or consolidation, which is extremely detrimental to the healthy development of the civil aviation industry.
Secondly, the massive losses have accumulated huge debts for airline companies, with many reaching insolvency. In the short term, achieving significant performance improvements for these companies will prove to be very challenging.
Furthermore, the civil aviation industry is greatly affected by external factors: fluctuating oil prices, persistent high exchange rates, ongoing regional conflicts, and continuous trade disputes, all of which pose significant challenges to the industry’s recovery and growth.
As of the end of 2023, China had a total of 66 transport airline companies, an increase of four from the end of 2019. By the end of 2023, the entire industry had 4,270 transport aircraft, an increase of 452 from the end of 2019.
Meanwhile, the market share of the three major state-owned airlines in the industry continues to decline. In terms of total turnover, China Southern Airlines Group accounted for 25.1%, down by 0.1% from 2019; Air China Group stood at 21.5%, down by 3.1% from 2019; and China Eastern Airlines Group held 19.2%, a decrease of 0.3% from 2019.