Airline Industry in China Struggles Against the Pandemic
January 31, 2023 marked a crucial point in the recovery process of the airline industry in China, as the restrictions imposed by the ‘zero covid’ policy in the Asian country continue to affect the sector. Air China suffered losses of 38 billion yuan (5.63 billion dollars, 5.18 billion euros) in 2021 and China Eastern Airlines lost 37,000 million yuan (5,500 million dollars, 5,000 million euros) in 2022.
The official Beijing Daily newspaper revealed that the airline losses may also be attributed to the increase in oil prices, exchange rate fluctuations and the limited mobility due to the pandemic.
The Civil Aviation Administration of China estimated that the airline industry will regain 75% of its activity from before the pandemic in 2023. In addition, the airports of Shanghai, Guangzhou, and Shenzhen took extreme losses totaling 50 billion yuan ($7.4 billion, 6.8 billion yuan).
On January 8, 2021, the ‘zero covid’ policy was dismantled and the mandatory quarantines for passengers arriving to China were also lifted. However, the airline industry still remains far from becoming a profit-making sector in China.
The lifeblood of the industry still relies on the continued lifting of restrictions and increased government aid. Therefore, the airlines still will have to wait until these measures are implemented to begin to see profits once again.
