In 2023, the industry-wide loss will be significantly reduced by 187.2 billion yuan.
Song Zhiyong, director of the Civil Aviation Administration, revealed the above data at the just-held 2024 Civil Aviation Work Conference.
At the beginning of last year, Song Zhiyong revealed at the 2023 Civil Aviation Work Conference that the industry-wide loss in 2022 would reach 216 billion yuan. The loss in 2023 will be reduced by 187.2 billion yuan, which means that China's civil aviation will still lose nearly 30 billion yuan in 2023.
According to the latest information exclusively learned by the first financial reporter, the Civil Aviation Administration of China set the goal of "overall profitability of the industry" for 2024 at an internal meeting.
Behind the turnaround
In the three years of the epidemic from 2020 to 2022, the civil aviation industry has been hit hard, with a cumulative loss of nearly 400 billion.
Among them, it lost 97.4 billion yuan in 2020, 84.2 billion yuan in 2021, and 216 billion yuan in 2022.
Entering 2023, the domestic aviation market will recover rapidly with the opening of the epidemic, while the international route market will recover slowly. This is an important reason why the industry as a whole still has not been able to turn around its losses in 2023.
According to statistics from the Civil Aviation Administration of China, the passenger volume of domestic routes in 2023 has exceeded the pre-pandemic level, an increase of 15%。
But if you add the international market, the passenger traffic for the whole of 2023 is 6200 million person-times, cargo and mail transportation volume 73540,000 tons, respectively, only recovered to 20196%。
In 2023, the overall recovery of international passenger flights of China's civil aviation will only be 37 of those in 20195%, from less than 10% at the beginning of the year to 55% at the end of the year8%, international routes can not recover at full blood, which means that a large number of wide-body aircraft that were originally going to fly international long-haul routes will return to the domestic market to "involute", which will also affect the airlines' fare level, aircraft utilization rate and passenger load factor.
According to the internal statistics of the Civil Aviation Administration obtained by the reporter, the daily utilization rate of aircraft in 2023 is 12 hours, the passenger load factor of the main shift is 53 percentage points, load factor 39 percentage points.
Driven by the rapid recovery of the domestic market, especially the "May Day", "Eleventh", summer peak season and other passenger demand, civil aviation has achieved overall profitability in the first three quarters, of which 14 airlines have achieved cumulative profitability. However, according to the data exclusively learned by the first financial reporter, in the fourth quarter, airlines fell into losses again, and the whole industry lost 81 in November alone300 million, almost lost the profit of the first 9 months, of which the airline lost 62800 million, only 2 airlines are profitable, and 34 airlines are loss-making.
One difference between the market in 2023 and the past is that people's enthusiasm for travel came earlier and faster than the epidemic, and it broke out in the second and third quarters, but it is also unexpected that the market will fall so quickly and deeply in the fourth quarter of 2023," Tang Chao, a civil aviation industry insider, pointed out that the domestic market performance from late August 2023 to the Spring Festival in 2024 is very cold, and the winter of the civil aviation market lasts for a long time.
What does it depend on to turn around this year?
For the 2024 year that has been entered, the Civil Aviation Administration of China set the goal of "overall profitability of the industry" at its internal meeting, believing that relying on the super-large-scale domestic demand market formed by a population of 1.4 billion people, including more than 400 million middle-income groups, China's aviation market space still has great potential to be tapped, and in 2024, it will strive to restore the passenger load factor, load factor, and daily aircraft utilization rate to the level of 2019.
With the shift of domestic residents' consumption from post-epidemic recovery to continuous expansion, and the overall promotion of new urbanization and rural revitalization, the effective demand for civil aviation will be further expanded, and China's domestic passenger traffic will continue to grow steadily, and it is expected that the annual passenger traffic of domestic routes will reach 6300 million people, more than 77 percentage points, the performance of peak seasons such as Spring Festival, Summer Transportation, and National Day is more expected," Song Zhiyong, director of the Civil Aviation Administration, predicted at the Civil Aviation Work Conference that in 2024, the total transportation turnover of the civil aviation industry, passenger transportation, cargo and mail transportation and other major indicators are expected to exceed the pre-epidemic level as a whole, the year-on-year growth rate of passengers is expected to reach double digits, and the year-on-year growth rate of cargo and mail is expected to achieve a slight increase.
This year's market should be slightly better than last year, one is because there is actually the impact of the epidemic in the first two months of last year, and the other is that after the gradual recovery of international routes, the capacity is relatively not so excessive," Lin Zhijie, a civil aviation industry insider, told reporters.
A number of industry insiders also pointed out to reporters that whether civil aviation can turn around in 2024 will have an important role in determining the recovery speed of the international route market.
In this regard, the Civil Aviation Administration of China expects that the international passenger market will accelerate its recovery in 2024, reaching about 6,000 flights per week by the end of 2024, recovering to about 80% of the pre-epidemic level.
At the online press conference held yesterday, Sun Wensheng, deputy director of the General Department of the Civil Aviation Administration, also revealed that the Civil Aviation Administration has asked all airlines to increase the capacity investment of international routes, especially routes from neighboring countries, according to market demand on the basis of ensuring operational safety, and accelerate the resumption of international flights.
In addition, oil prices and exchange rates are also important determinants of airline performance. In this regard, Chen Hao, general manager of Xi'an Zipeng Consulting, expects that due to the great uncertainty of the political situation in many countries around the world, and the Russian-Ukrainian and Palestinian-Israeli conflicts have not yet seen the signal of the end, it is expected that the fuel cost will still increase in 2024, and the exchange rate trend will be due to the decline in inflation expectations in the United States and Europe, which will make the financial cost pressure of airlines a little less.
*: CBN.
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