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in the first half of the year, the four major airlines significantly reduced their losses, and the three private airlines developed rapidly.

as of the evening of august 30, seven listed airlines, including air china (601111.sh), china eastern airlines (600115.sh), china southern airlines (600029.sh), hna holdings (600221.sh), spring airlines (601021.sh), juneyao airlines (603885.sh), and china express airlines (002928.sz), have successively disclosed their performance announcements for the first half of 2024.

in the first half of this year, the seven major airlines achieved a total revenue of 284.294 billion yuan and a total net loss of 5.538 billion yuan. among them, the three major central aviation enterprises, air china, china eastern airlines and china southern airlines, have not yet turned losses around, but have achieved a significant reduction in losses year-on-year, with a total loss of 6.778 billion yuan.

the total revenue of the four major private airlines exceeded 50 billion yuan in the first half of the year, and the net profit totaled 1.24 billion yuan. among them, hna did not turn losses into profits, while the other three airlines all achieved profits in the first half of the year.

the four major airlines significantly reduced losses in the first half of the year, spring airlines was the most profitable, china express airlines turned losses around, and international routes recovered rapidly

specifically, the three major aviation central enterprises had revenues of 228.509 billion yuan in the first half of the year, of which china southern airlines continued to lead with revenues of 84.79 billion yuan, up nearly 20% year-on-year, and had the smallest losses among the three major airlines, with losses narrowing by 57.29% year-on-year to 1.228 billion yuan. air china and china eastern airlines had revenues of 79.52 billion yuan and 64.199 billion yuan in the first half of the year, respectively, with revenues up more than 30% and nearly 30% year-on-year. net losses were 2.782 billion yuan and 2.768 billion yuan, respectively, narrowing by nearly 20% and more than 50% year-on-year.

according to wind data, air china, china southern airlines and china eastern airlines all achieved record revenue in the first half of this year.

among them, among air china's major subsidiaries and holding companies, only shandong airlines and cathay pacific airways continued to make profits, with net profits attributable to their parent companies of rmb 26 million and rmb 3.067 billion respectively, but net profits declined year-on-year. in the analysis of china eastern airlines' subsidiaries and holding companies related to its main aviation business, only china united airlines achieved profitability, with a net profit of rmb 94 million. among china southern airlines' major holding companies, xiamen airlines achieved a net profit of rmb 318 million in the first half of the year, a year-on-year increase of 34.7%. shantou airlines achieved a net profit of rmb 6 million, compared with a net loss of rmb 44 million in the same period last year, turning losses into profits.

as for the reason why the company has not turned losses into profits in the first half of the year, china eastern airlines mentioned in its financial report that in the first half of 2024, the company's operating efficiency has steadily improved, and its operating performance has achieved a significant year-on-year reduction in losses. affected by factors such as intensified competition in the domestic passenger transport market, lower-than-expected recovery in some international markets, and competition from high-speed rail, the domestic market ticket price level in the first half of the year has decreased year-on-year, and the international market ticket prices have gradually returned to normal levels. the daily utilization rate of aircraft has not yet recovered to the same period in 2019.

air china previously mentioned in its earnings forecast that the company was still operating at a loss in the first half of the year due to the overall recovery of international routes being slower than expected, intensified domestic market competition, and price fluctuations of factors such as oil prices and exchange rates. china southern airlines mentioned in its previous semi-annual report forecast that the current external environment for civil aviation development is complex and changeable, with oversupply in the domestic market, challenges in international market recovery, frequent extreme weather, and high oil prices. the company's operating pressure is still huge, and its net profit showed a loss in the first half of this year.

as for private airlines, hna's net loss in the first half of this year was 636 million yuan, a year-on-year reduction of more than 60%. the other three airlines all achieved profits in the first half of the year.

based on the unique advantage of private airlines, namely, "a small ship is easy to turn around", spring airlines had the highest net profit in the first half of the year, reaching 1.361 billion yuan, an increase of more than 60% year-on-year; juneyao airlines had the highest increase in net profit, achieving a net profit of 489 million yuan, more than five times the same period last year; china express airlines, as the only large-scale independent regional airline in china, successfully turned losses into profits in the first half of this year.

in vertical comparison, according to wind data, spring airlines' revenue and net profit hit a record high for the same period. juneyao airlines and china express airlines' revenue data hit a record high, but their profits did not return to the same period in 2019.

hna holdings' past performance, from wind

spring airlines past performance, from wind

juneyao airlines past performance, from wind

china express airlines past performance, from wind

regarding the performance changes in the first half of the year, china united airlines pointed out in its financial report that on the one hand, benefiting from the continued growth in domestic demand for private travel, the company seized the opportunities brought about by changes in market demand such as branch tourism and off-season travel; on the other hand, by opening new branch routes, promoting an increase in flight volume and optimizing accessibility to branch cities, the company's capacity deployment has steadily increased.

it is worth noting that although china southern airlines and hna turned losses into profits in the first quarter of this year, they failed to maintain their profitability momentum throughout the first half of the year.

among them, hna pointed out in its semi-annual report that the loss in the first half of the year was mainly due to the impact of exchange rate fluctuations in the first half of the year, and the company recognized a foreign exchange loss of 672 million yuan. in the previous semi-annual performance forecast announcement, it was mentioned that if the exchange loss was excluded, hna's net profit attributable to the parent company in the first half of the year was expected to be positive. the loss in the first half of the year was still due to the impact of the international routes not yet fully restored, the continued high oil prices and exchange rate fluctuations.

the international air passenger market continued to recover rapidly in the first half of the year. according to the civil aviation administration of china, the recovery level has exceeded 80% of the same period in 2019 for five consecutive months since february this year, and the overall international route passenger traffic has recovered to 81.7% of the same period in 2019.

all airlines have also continued to exert their strength on international routes, and the international route traffic has increased at a double speed. the international route traffic of "southeast china" increased by more than 3 times, nearly 4 times and nearly 2 times year-on-year respectively; the data of hna and spring airlines increased by more than 1 times year-on-year, juneyao airlines increased by more than 2 times year-on-year, and china express airlines increased by nearly 3 times year-on-year.

"with international recovery as the starting point, we will vigorously increase the recovery rate of international flights." regarding the progress of the recovery of international routes, china eastern airlines pointed out in its financial report that in the first half of this year, china eastern airlines' seat-kilometers and passenger revenue in the international market have recovered to more than 90% of 2019. the number of flights in some international markets such as europe, southeast asia, and australia has exceeded the same period in 2019. the overall recovery rate of international routes is significantly ahead of the industry average.

on august 30, han wensheng, vice chairman and general manager of china southern airlines, said at the china southern airlines' semi-annual performance meeting held in the form of online interaction that china southern airlines' international and hong kong, macao and taiwan flights have generally recovered to about 80% of the same period in 2019. in the second half of the year, china southern airlines will strive to fully restore routes from guangzhou to australia, new zealand, southeast asia, etc., and expand its route network in countries along the "belt and road" such as europe, the middle east, central and west asia.

spring airlines pointed out in its financial report that in the first half of the year, the capacity of international routes has recovered to more than 70% of 2019. the company has worked hard to overcome the many obstacles that have previously restricted the growth of northeast asian routes. the number of flights on the korean route has exceeded the same period in 2019, and the recovery rate of the japanese route is close to 100%. the company currently has 8 flight destinations in japan, which has exceeded the peak in 2019; in southeast asia, the capacity of the thailand route has recovered rapidly and is still the company's largest international route. juneyao airlines' semi-annual report shows that the number of international routes in the first half of the year increased to 19, and the number of flights also increased significantly compared with the same period last year, achieving an increase of more than 20% compared with the same period in 2019, continuing to expand its influence in the southeast asian and european markets, and intercontinental routes have begun to take shape.

china eastern airlines plans to repurchase shares through centralized bidding, cancel 123 airlines and inject capital into shanghai airlines

it is worth noting that on the evening of august 30, china eastern airlines issued several announcements related to its wholly-owned subsidiaries.

among them, in order to further optimize the company's management structure, shorten the management chain, improve management efficiency, reduce management costs, incorporate the arj21 fleet into the company's large fleet for unified operation, and coordinate production organization, china eastern airlines decided to absorb and merge its wholly-owned subsidiary 123 airlines, and will inherit all assets, businesses, debts and all other rights and obligations of 123 airlines, and continue to operate; 123 airlines, as the absorbed and merged party, will be deregistered in accordance with the law.

the announcement stated that 123 airlines is a wholly-owned subsidiary of china eastern airlines, and its financial statements are included in the company's consolidated financial statements. this absorption merger will not have a significant impact on the company's financial status and operating results, and will not harm the interests of the company and its shareholders.

according to the semi-annual report, 123 airlines is headquartered in shanghai, with shanghai pudong international airport as its main operating base. by opening up third- and fourth-tier cities with abundant traffic around the base to build a "branch network" and integrating the company's route network, it provides passengers with high-density transportation services. in the first half of this year, it achieved revenue of 275 million yuan, a year-on-year increase of 21.68%; net profit of -273 million yuan, compared with -207 million yuan in the same period last year; and carried 520,300 passengers, a year-on-year increase of 49.60%. as of june 30, 2024, 123 airlines operates a total of 24 arj21 aircraft.

in addition, china eastern airlines also announced that in order to enhance the capital strength of its wholly-owned subsidiary shanghai airlines and reduce its asset-liability ratio, the company plans to increase its capital to shanghai airlines by rmb 4.5 billion in cash. after the capital increase is completed, the registered capital of shanghai airlines will be rmb 10 billion. the announcement stated that after the completion of this capital increase, the company's shareholding ratio in shanghai airlines will remain unchanged, and the scope of the company's consolidated financial statements will not change.

china eastern airlines also announced that evening that based on its confidence in the company's future development prospects and its recognition of the company's long-term value, it plans to repurchase shares through centralized bidding transactions. the repurchase amount is not less than 250 million yuan (inclusive) and not more than 500 million yuan (exclusive) for a shares; not less than 250 million yuan (inclusive) and not more than 500 million yuan (exclusive) for h shares (finally converted to hong kong dollars based on the exchange rate). the source of the repurchase funds is the company's own funds, and the purpose of the repurchase of shares is to reduce the company's registered capital. the upper limit of the repurchase price is 4.39 yuan per share for a shares and 3.04 hong kong dollars per share for h shares (equivalent to approximately 2.76 yuan per share). the repurchase period is within 12 months from the date on which the company's shareholders' meeting deliberates and approves the share repurchase plan.

the summer travel season ends with “increased volume and falling prices”. how can airlines achieve their full-year profit targets?

the two-month summer travel season is an important peak season for airlines to increase revenue.

according to the 2024 summer transport summary report released by air travel on august 31, during this year's summer transport period, the total number of passengers transported by civil aviation exceeded 140 million, with an average of 2.28 million passengers per day, a year-on-year increase of 12% and an increase of 18% over 2019. among them, the number of passengers on domestic routes increased by 7.9% year-on-year and 20.8% over 2019. in terms of air ticket prices, the ticket prices in the first half of this year showed a trend of "increasing volume and falling prices". according to the above report, during the summer transport period, civil aviation travel fares showed a more "economical" feature, and the overall average ticket price of domestic routes (excluding tax) fell by about 10.7% year-on-year, and showed a trend of "from low to high and then to low".

airlines are also actively planning their full-year business plans. previously, many airlines mentioned in their annual reports that they would promote the resumption of international flights in 2024. among them, air china also mentioned that it would focus on improving efficiency and quality and significantly increase profitability in 2024.

in this semi-annual report, among the three major aviation central enterprises, air china stated that it will optimize the structure of international capacity investment and accelerate the recovery of profitability; china eastern airlines said that it will continue to expand the international market, open up "belt and road" routes, and strengthen revenue control and promote branded freight sales. china southern airlines mentioned that it will improve the accuracy of market forecasts, balance the relationship between ticket prices and the market, promote the recovery and development of potential markets, strengthen cooperation with external airlines, and enhance overseas business capabilities; seize the opportunities of cross-border e-commerce with electric goods, and strengthen cooperation with e-commerce platform customers.

it is worth noting that on august 28, air china and china southern airlines simultaneously received their first c919 aircraft, marking the start of a new phase of multi-user operations for c919. previously, china eastern airlines, china southern airlines and the three major aviation central enterprises had ordered 100 large aircraft from comac. by 2031, the three major airlines will each introduce a total of 100 large aircraft. in addition, supeng airlines, a subsidiary of hna airlines, will receive its first c919 passenger aircraft in the fourth quarter of 2024, becoming the world's first private airline to operate c919, and plans to introduce 30 c919 aircraft.

according to the semi-annual report, air china plans to introduce three c919s this year, and 10 in 2025 and 2026; china eastern airlines plans to introduce four c919s in the second half of this year, and 10 in 2025 and 2026. china southern airlines did not disclose its aircraft introduction plan in its semi-annual report, but at the performance briefing on august 30, china southern airlines executives said that china southern airlines' first c919 is expected to be put into commercial operation on september 19 this year, and the first commercial operation will be on the guangzhou-shanghai hongqiao route.

earlier, according to exclusive information from the paper, comac is expected to roll off 30 c919s this year, and the final assembly capacity is expected to reach 50 this year. in addition, it is expected that by 2027, the production capacity of c919 will reach 150, and the number of roll-offs may exceed 100.

as for the four major private airlines, hna stated that it will continue to accelerate the recovery of international routes in the second half of the year, and strive to restore the weekly flight volume of international routes to 100% of the average weekly flight volume of international routes in 2019; spring airlines stated that it will always adhere to the positioning of low-cost airlines, use differentiated business models, and continuously enrich innovative auxiliary products and service projects with higher profit margins; juneyao airlines previously stated at the performance briefing that the company remains optimistic about the market prospects and firmly believes that aviation consumption will continue to grow in the future, and will strive to seek new growth points in steady development; china express airlines will deepen its regional routes, seize opportunities in the process of market demand recovery, and improve operational efficiency.

at the regular press conference held by the civil aviation administration of china in july, the civil aviation administration of china predicted that the civil aviation transport market will maintain a steady growth trend in the second half of the year. the domestic passenger market will continue to grow naturally, and there will still be fluctuations between the off-season and peak seasons. the international passenger market will further recover, and the demand for air cargo and mail transportation will be generally stable. the industry's efficiency and benefit indicators will continue to rise slightly. the main indicators of civil aviation transport production for the whole year will exceed the level of the whole year of 2019, reaching an annual historical high.