(Yicai) July 15 -- It will be difficult for China’s civil aviation industry to turn a profit this year, mainly because the country’s major airlines expect to have stayed in the red in the first half of the year, according to insiders.

The Chinese aviation industry’s earnings improved in the first quarter of the year from a year earlier but will likely miss expectations in the third quarter, Zou Jianjun, professor at the Civil Aviation Management Institute of China, told Yicai.

Air China, China Eastern Airlines, and China Southern Airlines, the country’s three largest state-owned carriers, expect losses of up to CNY3 billion (USD413.9 million), CNY2.9 billion, and CNY1.6 billion, respectively, in the six months ended June 30. Hainan Airlines, another major Chinese carrier, will likely log a net loss of CNY600 million to CNY670 million (USD82.8 million to USD92.4 million).

The number of planes in the Chinese civil aviation industry is continuously increasing, but the demand for air transportation has not yet fully recovered, according to another market insider.

China’s civil aviation industry boasted 4,013 aircraft at the end of last year, up 10 percent from the end of 2019, according to data from the Civil Aviation Administration of China. Some 620 million passengers traveled by plane last year, up 146 percent from the year before but down 6 percent from 2019, CAAC data also showed.

The passenger volume on international routes recovered to only 80 percent of the pre-pandemic level in 2019. This means that many international wide-body passenger planes operate domestic routes, leading to increased airfares and lower utilization rates and passenger load factors.

Air China, China Eastern, China Southern, and Hainan Airlines are the Chinese carriers operating the most international flights, so they have more wide-body jets. Therefore, the slow recovery of international flights will likely have a bigger impact on them, resulting in bigger losses.

Meanwhile, some private regional airlines expect to have achieved a profit in the first half of the year.

Spring Airlines’ net profit likely rose 54 percent to 60 percent to between CNY1.29 billion and CNY1.34 billion in the first half from a year earlier. Juneyao Airlines expects a net profit of CNY450 million to CNY550 million, up 621 percent to 781 percent in the period. China Express Airlines probably turned a net loss into a net profit of between CNY22 million and CNY32 million (USD3 million and USD4.4 million).

Editor: Futura Costaglione