(Yicai Global) Oct. 31 -- China’s eight listed airlines lost a total of CNY106 billion (USD14.6 billion) in the first three quarters of the year, or CNY388 million (USD53.4 million) a day, because of sporadic Covid-19 outbreaks and higher fuel prices.

The four major carriers -- Air China, China Eastern Airlines, Hainan Airlines, and China Southern Airlines -- widened their losses to CNY28.1 billion (USD3.9 billion), CNY28.1 billion, CNY20.8 billion, and CNY17.6 billion, respectively, in the nine months ended Sept. 30 from a year ago. Spring Airlines, the only profitable listed airline in the same period last year, lost CNY1.7 billion (USD234 million).

This year’s industry-wide loss is the biggest ever, mainly due to the ‘double kill’ effect of a struggling market and higher costs, civil aviation insider Lin Zhijie told Yicai Global.

Because of Covid-19 outbreaks, the market has recovered by only about 50 percent compared with 2019, versus 70 percent last year, he said, while fuel prices have surged about 75 percent from a year earlier, raising total industry costs by over CNY40 billion. The number of flights also shrank and a weaker Chinese yuan brought foreign exchange losses, Lin added.

Last year, Shandong Airlines, Shanghai Airlines, Chongqing Airlines, Urumqi Air, and Fuzhou Airlines filed for insolvency. In the first half of 2022, Hainan Airlines, Shenzhen Airlines, China Southern Airlines’ Shantou Airlines, and China Eastern Airlines’ Jiangsu province-based unit followed suit. The number of tapped out carriers is not expected to decline with the disclosure of poorer financial results in the third quarter.

To maintain daily operations, insolvent airlines have to rely on capital injections by major shareholders or shares sales, industry insiders told Yicai Global.

The Civil Aviation Administration of China said that in the first half it injected CNY3 billion into each of Air China, China Eastern, and China Southern, as well as CNY2 billion into Capital Airports Holdings, the nation’s largest airports operator. The CAAC also issued CNY150 billion worth of emergency loans to carriers in addition to CNY65.6 billion of existing emergency loans to airline and airport companies.

By contrast, China’s air cargo industry continues to report positive results, despite the market cooling down on the back of booming demand in the first two years of the pandemic.

Eastern Air Logistics, the cargo business of China Eastern, had revenue of CNY6.1 billion in the third quarter, up 22 percent from a year ago, its latest earnings report showed. Net profit was CNY820 million, down 9.2 percent. In the first three quarters, revenue was CNY17.7 billion, an increase of 17 percent, while net profit jumped 21 percent to CNY2.9 billion.

The air cargo industry, which turned big profits on earlier supply constraints, has weakened since July because of Covid outbreaks and a faltering global economy, according to industry insiders. Export freight rates are a little higher than before the pandemic, after sinking 60 percent to 70 percent from a peak.

Editor: Futura Costaglione