Top Chinese airlines' profits fall as flagging economy pressures fares
China's top three state-owned airlines reported profit declines in the third quarter despite record summer passenger numbers and fuller planes than last year, as a slowdown in domestic economic growth pushes flyers to seek cheaper fares.
Beijing-headquartered Air China on Wednesday reported a net profit of 4.14 billion yuan ($581.34 million) in the quarter, down from 4.24 billion yuan a year earlier.
China Eastern Airlines on the same day posted a net profit of 2.63 billion yuan, down 28.2% year on year.
The country's largest airline China Southern said on Monday there was "strong demand in the aviation market" but reported a 23.9% year-on-year drop in third-quarter net profit to 3.19 billion yuan.
China Southern added 11% more capacity to its operations over the quarter compared to the year before and planes were on average fuller than last summer, airline data shows. However, operating revenues for the quarter rose just 4.6%, indicating a decline in ticket prices.
Airlines globally have been seeing stable demand but overcapacity and sluggish yields as a post-pandemic travel boom abates and most planes are back in the skies.
China has been slower than the rest of the world to return capacity to the market due to a later lifting of pandemic travel restrictions in early 2023. Domestic capacity is higher than in 2019, but international flights have been particularly slow to ramp back up.
"The significant lag between increased capacity and bottom-line growth indicates that conditions are more austere (in China) than the slowdown experienced elsewhere," said a recent note from Ishka, an aviation data and advisory business.
Chinese customers are curbing spending as a property crisis drags on and youth unemployment stays high, despite