who has the upper hand?

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China’s three major airlines, namely Air China, China Southern Airlines (ZNH) and China Eastern Airlines (CIAH) (CEA), expect to post losses for the second consecutive year. But which airline has the upper hand in terms of financials?

Among China’s three largest airlines, Air China is expected to be the worst performer. The Chinese airline estimated that it would rack up a net loss of between 14.5 and 17 billion yuan ($2.3 billion to $2.7 billion). By comparison, the airline posted a net loss of 14.4 billion yuan ($2.3 billion).

It should be noted that the financial figures for the year 2021 are preliminary, while the financial data for 2019 and 2020 are fixed. The companies will update their financial figures in an annual report for 2021.

Meanwhile, Shanghai-based China Eastern Airlines (CIAH) (CEA) expects a net loss of between 11 billion and 13.5 billion yuan ($1.7 billion to $2.1 billion). In 2020, the carrier reported a net loss of 11.8 billion yuan ($1.9 billion).

China Southern Airlines (ZNH), China’s largest airline by fleet size, expects to report a net loss of between 11.3 billion and 12.8 billion yuan ($1.8 billion to $2 billion). That compares to a net loss of 11.7 billion yuan ($1.8 billion) in 2020.

The negative financial estimates are largely attributed to weak international travel demand, fluctuating passenger traffic on domestic routes and higher oil prices by the three state-owned airlines.

Air China said in a statement, “Capacity intake on international routes remained limited and passenger traffic on domestic routes fluctuated sharply, making it increasingly difficult for the company to improve its operational performance Rising oil prices and fluctuating exchange rates have further aggravated the company’s operating difficulties.

To address cost issues and maximize operational performance, China’s Big Three carriers have focused on cargo operations and resource planning.

Unlike the three airlines, China’s fourth-largest carrier, Hainan Airlines, which recently exited restructuring, expects to report 2021 net profit estimated at 4.5-6.2 billion yuan ($708-975 million).

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