China Eastern Airlines recently released its financial report, showing that despite achieving a record high revenue of 132.1 billion Chinese yuan in 2024, a year-on-year increase of 16.11%, the company is still deeply in the red. Its net profit attributable to shareholders was a loss of 4.226 billion yuan, making it the most severely loss-making among the three state-owned airlines in China. This marks the fifth consecutive year of financial losses for China Eastern Airlines.
As the peak summer travel season approaches, major airlines are expanding their routes, and China Eastern Airlines is no exception. It has announced plans to open multiple new routes. Last year, its international flight volume even surpassed the levels of 2019, showing superior performance compared to the industry as a whole. However, despite the expansion in capacity, China Eastern Airlines’ profitability continues to be under pressure.
Since achieving a net profit of 3.195 billion yuan in 2019, China Eastern Airlines has seen a continuous decline in performance. From 2020 to 2024, the company has accumulated net losses of over 70 billion yuan. The situation remained severe in the first quarter of this year, with a net loss of 995 million yuan.
China Eastern Airlines stated that the financial losses are mainly due to intensified industry competition, insufficient demand for corporate and business travel, fluctuation in oil prices and exchange rates. The company’s comprehensive gross profit margin is significantly low, standing at only 4.26% in 2024, far below the 11.3% recorded in 2019.
Passenger services, as the core business of China Eastern Airlines, account for a high proportion of total revenue at 93.95%. In 2024, the number of passengers transported reached 141 million, a year-on-year increase of 21.58%, but the growth rate in revenue from passenger services was only 16.17%. The key profitability indicator of passenger revenue per kilometer has declined for two consecutive years, reaching 0.512 yuan in 2024, a decrease of 13.66% year-on-year.
China Eastern Airlines has particularly weak performance in the domestic market in China, with revenue of 90.68 billion yuan, a modest year-on-year growth of only 0.54%, representing a decrease in its share of total revenue from 79.25% to 68.63%. While international operations are the main growth engine, their profitability is lower than that of domestic operations, with passenger revenue per kilometer at only 0.49 yuan, a decrease of 22.1% year-on-year.
As of the end of the first quarter of this year, China Eastern Airlines’ total debt reached 244.9 billion yuan, with a debt-to-asset ratio as high as 85.84%. The company’s monetary funds amounted to only 6.646 billion yuan, while short-term borrowings and non-current liabilities due within a year totaled 73.11 billion yuan. The shortfall in liquid assets exceeded 63.3 billion yuan, posing a severe liquidity crisis.
As one of China’s three major state-owned airlines, China Eastern Airlines faces a heavy debt burden that further squeezes its profit margin. In 2024, interest expenses amounted to as much as 5.148 billion yuan, equivalent to 91.6% of gross profit during the same period. According to existing agreements, the company will still need approximately 64.445 billion yuan in capital expenditures for aircraft and engines in the next three years, further exacerbating its financial pressure.