According to statistics provided by an industry official, airline services in China are feeling the blow from Beijing’s uncompromising loyalty to the zero-COVID policy this year.
Song Zhiyong, director of the Civil Aviation Administration said at a National Civil Aviation meeting that the performance of passenger flights has met a low point in the first half of this year. His speech was quoted and reported by Chinese media First Financial on July 9.
Attributing the dreary situation to repeated COVID-19 resurgences in the country, Song said the daily flight number dipped to minimum levels during the timeline. There were only 2,967 flights, 17.8% fewer than in the same period in 2019.
Song added that the industry suffered a total loss of 108.9 billion yuan. In U.S. dollars, the amount equates to more than 16 billion. Since the beginning of coronavirus, the civil aviation sector has lost a total of around 300 billion yuan or 44.8 billion dollars.
The pandemic has upended the industry’s profit making trajectory. Worst, Song 宋 noted that the loss in the first half of this year has exceeded the loss in 2020 and 2021. Civil aviation only earned 307.2 billion yuan (46 billion dollars) throughout the first six months of 2022, which indicated a 41.8% drop from the pre-pandemic period.
Song was also frank about the current asset-liability ratio of Chinese airlines, which has reached 82.2%, up 11.9% from before COVID-19. At least 12 airlines have asset-liability ratios exceeding 100%, which means they have become insolvent.
Despite the sharp decline in revenue, pressure on the expense side has intensified.
Due to soaring oil prices, fuel costs rose by 22.2 billion yuan, or approximately 3.3 billion dollars, and are projected to soar by 86 billion yuan, about 12.8 billion dollars, for the entire year.
In comparison to the same period last year, the loss brought on by the yuan’s depreciation versus the dollar grew by 16.7 billion yuan, nearly 2.5 billion dollars.
Businesses are also further burdened by expenses for anti-pandemic equipment and protocols.
With more than 100 billion yuan of loss, Song expected financial, fiscal, tax, and other rescue policies this year may help companies reduce losses by about 10 billion yuan, almost 1.49 billion dollars.