(Yicai) March 31 -- China’s three biggest airlines slashed their losses last year, yet none managed to return to profit, as fierce competition and weak demand for business and leisure travel continued to weigh on a complete financial recovery.

Air China’s net loss shrank 77 percent to CNY237.3 million (USD32.7 million) in the 12 months ended Dec. 31, the national flag carrier announced on March 27. Revenue climbed 29 percent to CNY166.7 billion (USD23 billion).

China Eastern Airlines and China Southern Airlines reported net losses of CNY4.2 billion and CNY1.7 billion (USD579 million and USD234.4 million), down 48 percent and 60 percent, respectively. Revenues rose 16 percent and 8.9 percent to CNY132.1 billion and CNY174.2 billion.

Chinese airlines have been under financial pressure as a result of the Covid-19 pandemic. The big three have now endured five consecutive years of losses.

Even though China Southern’s load factor rose to 84.4 percent in 2024 from 78.1 percent from the year before, revenue per passenger-kilometer fell to 48 Chinese cents (7 US cents) from 55 Chinese cents. The RPK of Air China and China Eastern dropped 12 percent and 14 percent to 53 Chinese cents and 51 Chinese cents.

The financial results of the big three reflect broader challenges faced by Chinese airlines. While passenger numbers soared to a record high in the year, the average economy-class fare and RPK plunged 10 percent and 13 percent, per data from the Civil Aviation Administration of China.

Passenger demographics changed a lot last year, according to a report by travel agency Qunar’s big data research institute. The surge in air travel was largely driven by leisure tourists and those visiting family, groups that are particularly price-sensitive, while the share of high-value passengers such as business and premium travelers sank.

The trend is ongoing. Flight Master data shows that during the Chinese New Year holiday, the average airfare dropped 11 percent to CNY875 (USD120) from a year earlier despite the number of passengers increasing.

Though Air China, China Eastern, and China Southern failed to return to the black last year, many smaller airlines reported profits. Regional carrier China Express Airlines, for example, said it expects to have made a net profit of between CNY200 million and CNY280 million, compared with a net loss of CNY965 million in 2023.

The big three airlines’ freight units also reported strong earnings for last year, mainly thanks to the explosive growth of cross-border e-commerce, which buoyed air freight rates.

Air China Cargo expects to post a profit of CNY1.8 billion to CNY2 billion, up 56 percent to 73 percent. China Eastern Air Logistics’ profit likely rose 0.5 percent to 17 percent to between CNY2.5 billion and CNY2.9 billion, and China Southern Cargo forecast profit to have widened 72 percent to CNY4.2 billion.

Global air cargo demand jumped by more than 8 percent last November from a year ago, climbing for the 16th straight month, according to data from the International Air Transport Association.

Editors: Tang Shihua, Futura Costaglione