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BEIJING: China’s largest airline reported less severe losses in the second quarter on Saturday (Aug 29) as domestic travel rebounds with the coronavirus outbreak largely controlled.
The country where the disease emerged last year has reported no new deaths since May.
It allowed for a tentative return of business and tourist travel within its borders, even as the virus wreaked havoc elsewhere.
China Southern Airlines, the country’s largest airline in terms of passenger numbers, posted a loss of 2.9 billion yuan ($ 422 million) in the April-June period, compared with 5.3 billion yuan in the first quarter of January to March.
“The COVID-19 pandemic has had a profound and long-term impact globally,” the company said in its results announcement, predicting further uncertainty.
But “the aviation market in China will be the first to recover, and the overall recovery and development trend is prosperous,” he said, noting “strong potential demand for passenger travel” if the virus is suppressed.
Flag carrier Air China reported total losses in the first half of 9.4 billion yuan, with a second-quarter loss of 4.6 billion only slightly less than the 4.8 billion recorded in the first quarter.
However, the country’s second-largest airline, China Eastern Airlines, bucked the trend, with losses in the April-June quarter of 4.6 billion yuan higher than 3.6 billion yuan in the first three months of the year.
This was due to an aggressive pricing policy that attracted travelers back to the airline but resulted in lower margins.
About 10 Chinese airlines have launched unlimited flight deals to boost demand since the virus was eliminated through strict closures, contact tracing and close surveillance of neighborhoods.
“This is a very significant moment because it is the first time since the beginning of the COVID-19 outbreak that a significant segment of the aviation market anywhere in the world has returned to pre-pandemic levels,” said Olivier Ponti, vice president. -Chairman of ForwardKeys Travel Analysts.
“The decisive question is whether deep discounts will still be needed to sustain the recovery, or whether the industry will become profitable again during the upcoming Golden Week holidays in October,” he said.
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