China’s Air Transport Declines and is Heavily Indebted

On August 15, China Eastern Airlines released its financial data for July 2022. In July, compared to the same period last year, the Company’s passenger capacity input decreased by 32.8%, passenger turnover decreased by 39.85%, and the passenger load factor was 66.98%, a decrease of 7.85 percentage points.

Air China expects a net loss of about 18.5 billion yuan to 21 billion yuan for the first half of 2022. For the same period, China Southern expects a net loss to its listed shareholders of RMB10.2 billion to RMB12.1 billion, and Spring Airlines expects its net loss to be 1.2 billion yuan to 1.3 billion yuan.

According to statistics, civil aviation transport in China hit a low point in the first half of 2022. The industry-wide daily flight volume was only 2,967 at its lowest, only 17.8% of the same period in 2019, with an overall loss of 108.9 billion yuan.

The civil aviation industry in China had been profitable for 11 consecutive years before the pandemic, with profits totaling 54.9 billion yuan in 2019. After the Chinese Communist Party (CCP) virus outbreak, however, the cumulative loss of the airline industry has been nearly 300 billion yuan. The loss for the first half of 2022 exceeds the total loss for the two years 2020 and 2021. The gearing ratio of airlines reached 82.2%, up 11.9 percentage points from the pre-pandemic period, and 12 airlines had gearing ratios over 100%.

The Chinese Communist Party dictator regime has implemented the Zero-tolerance of CCP virus policy, which locked down half of the country for a long time and led to the withering people’s livelihood. The airline industry is only one part of the economic performance. All data are on a downward trend, which is a sign of the collapse of China’s economy.