China’s Domestic Traffic Approaches 2019 Levels

 - October 16, 2020, 4:08 PM
China Eastern Airlines will soon receive a $4.6 billion cash injection from four state-owned investors. (Photo: Airbus)

This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.

China's airlines continue to witness a strong uptick in local demand after domestic traffic rose to 47.75 million in September, representing 98 percent of passenger volume compared with the same month a year earlier, the Civil Aviation Administration of China (CAAC) said in a press briefing on Thursday. That translates to a total of 371,000 domestic passenger flights last month, up 3.5 percent from the same period in 2019.

Adding to the recovery, Chinese regulators expect a continuation of strong domestic market performance in October, driven largely by China’s Golden Week holiday. According to the CAAC, Chinese airlines carried a total of 13.26 million passengers from October 1 to 8, with the average daily passenger traffic and average daily flight volume of 91.07 percent and 89.7 percent of the same period last year, respectively.

Despite a gradual rebound in capacity and demand, airlines and airports across the mainland continue to suffer from low domestic ticket prices, limited international flights, and a slower than expected recovery in the broader economy. Shandong Airlines expects to post a loss of up to $56 million in the third quarter of 2020 compared with a profit of $108 million in the same period last year. For the first nine months of this year, the carrier said it expects a loss between $225 million to $275 million.

Shenzhen Bao'an International Airport on Wednesday said it expects to post a loss of up to $9.6 million for the first nine months of 2020, compared with a profit of $71.6 million in the same period last year. Meanwhile, Shanghai-based China Eastern Airlines announced earlier this week it would receive a cash injection of $4.6 billion from four different state-owned investors as part of an equity diversification plan.

Notwithstanding the financial woes, China’s civil aviation infrastructure continues to press ahead as the country enters the homestretch of its 13th five-year plan, which runs through 2020. According to Bao Yi, deputy director of the CAAC’s development planning department, China expects to have opened 41 newly constructed runways and 2,264 stands for aircraft at airports across the mainland by year-end. The country also plans to add 43 newly built or relocated airports before 2021, bumping the number of civil aviation and general aviation airports to 241 and 313, respectively.