Last year, Juneyao Airlines earned more than 700 million yuan, and the owner of Hainan Airlines increased its holdings! The volume of international flights has recovered by 112%, and this year it will focus on Europe

Source of this article: Times Finance Author: He Mingliang

Image source: Juneyao Airlines official website

Juneyao Airlines (603885. SH) became the first A-share listed airline to announce its 2023 turnaround report.

According to the 2023 annual report released by Juneyao Airlines recently, its operating income increased by 144.76% year-on-year to 20.096 billion yuan, of which air passenger revenue was 19.580 billion yuan and air cargo revenue was 308 million yuan.

2023 is the first year of the optimization of epidemic prevention and control policies, Juneyao Airlines, as a private airline, has achieved a turnaround, compared with a loss of 4.148 billion yuan in 2022, and its net profit attributable to shareholders of listed companies in 2023 will be 751 million yuan.

In terms of specific operating indicators, Juneyao Airlines' gross profit margin of air passenger traffic in 2023 will be 13.76%, with a year-on-year increase of 105.79% in available seat kilometers and a year-on-year increase of 153.17% in revenue passenger kilometers.

In terms of aircraft utilization rate, the passenger load factor of Juneyao Airlines' aircraft types has exceeded 8 percent, and the daily utilization rate has generally exceeded 10 hours, exceeding the utilization efficiency of the three major state-owned airlines in the same period of 8~9 hours. Among them, the B737 series aircraft has the highest load factor, which is 85.47%; The B787 family of aircraft had the highest utilization rate of 10.89 hours.

In 2023, Fang Wei, the actual controller of HNA Aviation Group Co., Ltd., also became the third largest shareholder of Juneyao Airlines, holding 54.9581 million shares as of the end of the reporting period, accounting for 2.48%, and relevant announcements show that Fang Wei will continue to increase its holdings in Juneyao Airlines in 2024, with its shareholding accounting for 2.63% as of February 19, 2024.

International flights have recovered to the same level in 2019

2023 is the first year of optimization of epidemic prevention and control policies, and for private airlines with flexible decision-making mechanisms, how to make trade-offs (compared to 2019) and re-find profitability in the international market has become a big test.

According to data provided to Times Finance by Flight Steward, as of March 2024, most of the international routes of Juneyao Airlines and its subsidiary Jiuyuan Airlines are concentrated in Southeast Asia. If the number of flights on international routes (regions) is counted, Jixiang and Jiuyuan have exceeded the same period in 2019 in March 2024, with a recovery rate of 112.28%.

Juneyao Airlines has two operating brands, Juneyao Airlines and Jiuyuan Airlines, with the former being based in Shanghai and targeting mid-to-high-end business, travel and leisure customers, while Jiuyuan Airlines is based in Guangzhou and mainly serving the domestic low-cost airline market.

As of March 2024, the low-cost airline Jiuyuan Airlines will be able to reach two countries in Southeast Asia, namely Thailand and Laos, and the full-service airline Juneyao Airlines will be able to reach seven countries in Asia, namely Japan, Thailand, Singapore, South Korea, Indonesia, and Finland and Italy in Europe.

Jiuyuan Airlines has a fleet of 24 Boeing 737 family narrow-body aircraft (as of the end of February this year), and its international routes are concentrated in Southeast Asia. In March 2019, Jiuyuan Airlines' overseas routes were concentrated in Myanmar (54 flights) and Thailand (13 flights), but in March 2024, Jiuyuan Airlines will no longer operate Myanmar routes, and will instead fly to Thailand (59 flights) and Laos (12 flights).

At the same time, Jiuyuan Airlines operated 25 flights from Guangzhou and Guiyang to Don Mueang Airport in Thailand in March last year, and 9 flights respectively, but in March this year, it no longer operated.

Times Finance learned from industry insiders that Jiuyuan Airlines, a low-cost airline that has been in commercial operation for 9 years, responds more quickly to the market, and if the revenue of the route declines, it will cut the corresponding route more decisively to ensure profitability.

Juneyao Airlines has a fleet of 87 A320 family narrow-body aircraft and 7 Boeing B787 family aircraft (as of the end of February this year). As of March 2024, Juneyao Airlines' international routes are distributed at departure airports such as Beijing, Nanjing, Shanghai, and Zhengzhou.

International routes (regions) departing from Shanghai Pudong Airport are relatively stable, and most of them are close to recovering to the level of March 2019, including flights to Kansai, Central Nagoya, Haneda Airport and other airports in Japan. Compared to the same period in 2019, flights to Singapore's Changi Airport tripled to 82, while flights to Naha in Okinawa, Japan, and Kalibo, Philippines ceased to operate.

Crypto European routes in 2024

Judging from the distribution of the above destinations, Juneyao Airlines used to operate mostly in Asia and only a few intercontinental routes, but in 2024, Juneyao Airlines is increasing the layout of European routes.

On April 2, 2024, Juneyao Airlines will launch a route from Shanghai Pudong Airport to Athens, Greece, which is its third direct flight route in Europe, and plans to operate three flights a week, and from July this year, Juneyao Airlines will add three new direct flights from Shanghai Pudong to Manchester, England, and Shanghai Pudong to Brussels, Belgium.

This is Juneyao Airlines' first foray into the traditional aviation market in Western Europe, and at that time, its long-range intercontinental routes will reach 6, with direct flights to Northern Europe, Western Europe and Southern Europe, including Finland, the United Kingdom, Belgium, Italy and Greece.

Some industry insiders pointed out to Times Finance that Shanghai did not have a direct flight to Athens, Greece before, and the addition of Juneyao Airlines to this route is equivalent to supplementing this capacity, and there are no direct flights from Japan and South Korea to Athens, which also means that Japanese and South Korean passengers can choose Juneyao Airlines as a transit flight to reach Greece.

At the end of July this year, the 2024 Paris Olympic Games will officially open, which is expected to drive tourism in Europe and increase the demand for air passenger traffic from around the world to Europe.

However, from concentrating on Asian operations in the past to now encrypting European routes, Juneyao Airlines will face many adjustments in the arrangement of aircraft capacity, marketing structure, operation support, catering system, and adaptation to local regulations.

For example, according to the EU EU261 "Flight Compensation Clause", the airline needs to compensate each passenger for a delay of three hours for a flight distance of 1500 km ~ 3500 km, and 600 euros for each passenger if the flight distance is delayed for four hours. Although there are still certain conditions in this clause, the compensation standard is much higher than that in China, which also means that airlines will pay huge costs if they violate this clause.