(Yicai Global) July 11 -- China's civil aviation industry, which includes airlines and airports, accumulated losses of CNY108.9 billion (USD16.2 billion) in the first six months, more than the full year losses in both 2020 and 2021, as the Covid-19 pandemic continues to strangle air travel, according to the latest data.

Following a resurgence of the novel coronavirus in the country, air travel hit a low point in the first half, Song Zhiyong, director of the Civil Aviation Administration of China, said on July 9. At one point, there were only 2,967 flights a day, just 17.8 percent of the same period in 2019.

The huge losses are directly related to diving revenue and surging costs, Song said at a mid-year national civil aviation teleconference. In the six months ended June 30, revenue plunged 41.8 percent from the same period last year to CNY307.2 billion (USD45.7 billion), less than a third of what the industry was earning in 2018 and 2019.

Accumulated losses since the start of the pandemic in early 2020 are now approaching CNY300 billion (USD44.7 billion), Song said. Before then the country’s civil aviation sector was profitable for 11 consecutive years. In 2019, it raked in profit of CNY54.9 billion (USD8.1 billion).

There are 12 airlines that are technically bankrupt with a debt-to-asset ratio of 100 percent, he said. And the overall gearing ratio of Chinese carriers has reached 82.2 percent, up 11.9 percentage points from pre-pandemic times.

The sharp rise in international oil prices and the depreciation of the Chinese yuan against the US dollar hasn’t helped, Song said. Airlines spent an extra CNY22.2 billion (USD3.3 billion) on fuel in the first six months compared with the same period last year, and this may reach CNY86 billion by the end of the year. Another CNY16.7 billion was squandered due to the falling exchange rate.

There are also much higher costs, with carriers needing to spend a lot of money on epidemic prevention and control measures, he added.

"The CAAC is coordinating with other government departments to introduce relief policies which should help companies save CNY10 billion this year," Song said.

Since April, once the outbreaks of Covid-19 were under control, business has been picking up, Song said. There were 10,000 flights on June 24 and one million passengers on June 29. But it will still be extremely difficult to achieve this year's targets, he added.

Overall, the statistics so far this year paint a gloomy picture. Passenger numbers sank 36.7 percent from the same period in 2019 to 118 million. Cargo and mail transport plunged 87.5 percent to 3 million tons. Transport turnover plummeted 46.7 percent to 29.3 billion ton-kilometers. And the number of daily flights halved to around 8,000 flights.

Editors: Tang Shihua, Kim Taylor