Chinese companies with balance sheets in the red, but traffic above pre-Covid levels

Carriers blamed the losses on the imbalance between supply and demand, more price-sensitive travellers, and competition from China's ever-expanding high-speed rail network. Geopolitical uncertainty and the slow recovery of premium international traffic also hurt revenues despite the fact that Chinese airlines were able to take advantage of Russian airspace overflights unlike Western airlines, a retaliation from the sanctions taken against Russia since the start of the war in Ukraine.

European flights to China have become longer, more expensive, and also more difficult to find, as more and more European airlines are cancelling routes, problems that Chinese airlines do not have. The struggle for profits in travelling between Europe and Asia has led several airlines, including Lufthansa, British Airways and Poland's LOT, to suspend some routes. In contrast, Chinese and non-European carriers have increased direct flights from Asia to European cities.

Despite this disadvantageous position, global airlines have returned to profitability, while the big three Chinese airlines continue to lose money, which puts them behind the post-COVID recovery.

However, the first quarter of this year saw a strong upturn in international travel, with airlines carrying 34% more foreign passengers than in the same period last year, according to Civil Aviation Administration data. Authorities reported that nearly 19 million international passengers flew on Chinese airlines during the quarter, surpassing pre-pandemic 2019 levels by 4.5 per cent, thanks to the facilities introduced to obtain Visa to enter the country. There are 28 Chinese and 100 foreign airlines operating international routes connecting China with 78 countries, four more than before the pandemic.

Total seat capacity increased by 4% over last year, with domestic capacity up 2% and international capacity up 11%.