15F Finance |" Spring Airlines, which has heard of and never sat on, became the only profitable airline in the third quarter?

This week, eight listed domestic airlines Air China, China Southern Airlines, China Eastern Airlines, Hainan Airlines, Spring Airlines, Juneyao Airlines, Huaxia Airlines and Shandong Airlines successively disclosed their operating data and financial reports for the first three quarters. Unlike many airlines in the third quarter of last year, in the third quarter of this year, domestic airlines recorded losses, and the only profitable one was Spring Airlines, the largest low-cost airline in China.

The cumulative loss of the seven domestic airlines in the first three quarters was 29.319 billion yuan

Judging from the three quarterly reports of listed airlines, the most profitable of the three state-owned airlines is Air China, the most profitable of the three major state-owned airlines, in the first three quarters of this year, Air China achieved operating income of 57.457 billion yuan, an increase of 18.58% year-on-year; net loss of 10.322 billion yuan.

It was followed by China Eastern Airlines with a revenue of 17.791 billion yuan and a loss of 8.162 billion yuan in the first three quarters; China Southern Airlines had a maximum revenue of 26.919 billion yuan and a loss of 6.119 billion yuan in the first three quarters; and Hainan Airlines had a revenue of 8.924 billion yuan and a loss of 3.442 billion yuan.

Shandong Airlines released a performance forecast for the first three quarters of 2021, expecting a loss of 290 million yuan to 360 million yuan in the third quarter of 2021, a loss of 1.015 billion yuan to 1.24 billion yuan in the first three quarters of this year, a loss of 1.68 billion yuan in the same period last year, and an expected net asset of -220 million yuan to -160 million yuan at the end of the period, compared with 3.234 billion yuan in the same period last year.

Juneyao Airlines and Huaxia Airlines had revenue of RMB3.08 billion and RMB950 million and net losses of RMB49.8 million and RMB131 million respectively in the first three quarters.

On October 29, Spring Airlines released its third quarterly report, with revenue of 3.184 billion yuan during the reporting period, an increase of 14.46% year-on-year; revenue in the first three quarters was 3.184 billion yuan, and profit was 158 million yuan.

In the second quarter of this year, HNA, Spring Airlines and Juneyao Airlines all achieved a turnaround, but only Spring Airlines achieved profitability in the third quarter.

In summary, the seven domestic airlines Air China, China Eastern Airlines, China Southern Airlines, Hainan Airlines, Shandong Airlines, Juneyao Airlines and Huaxia Airlines had a total net loss of 29.319 billion yuan in the first three quarters.

Reasons for loss: Affected by the scattered outbreak of the epidemic and the rise in oil prices

Beiqing-Beijing headline reporters combed the three quarterly reports of various airlines and found that many airlines gave the same reason for the loss problem: affected by the scattered outbreak of the epidemic and the rise in oil prices.

The first is the multi-point distribution of the new crown epidemic and the mutation of the Delta virus, and the market source is difficult to effectively support, which is the biggest uncertainty factor affecting the recovery and development of the industry; the second is that the average aviation fuel price rose by more than 20% from January to October this year, which increased the cost burden of airlines. In addition, the combined impact of factors such as exchange rate fluctuations also has a certain impact on airlines.

According to the data of the Civil Aviation Administration, in the first three quarters of this year, the total turnover, passenger traffic and cargo and mail transportation volume completed by the civil aviation industry were 66.93 billion tons, 353 million person-times and 5.456 million tons, respectively, an increase of 22.0%, 25.8% and 14.3% year-on-year, and recovered to 69.3%, 71.0% and 100.1% in the same period of 2019, respectively.

In terms of operation guarantee, in the first three quarters of this year, China Southern Airlines passengers carried 8.684 million passengers, an increase of 22.41% year-on-year; China Eastern Airlines passengers 62.807 million passengers, an increase of 24.12% year-on-year; Air China passengers 55.1037 million passengers, an increase of 20.1% year-on-year; Hainan Airlines passengers 33.449 million passengers, an increase of 37.1% year-on-year; Spring Airlines passengers 16.6988 million passengers, an increase of 29.82% year-on-year; passengers 14.3595 million passengers increased by 37.1% year-on-year.

Among them, compared with the same period in 2019, the passenger recovery rate of Spring Airlines was the highest of about 99.8%, which has basically recovered to the same period in 2019, followed by Juneyao Airlines with a recovery rate of 86.2%. In addition, the recovery rate of passengers of the three major airlines in China, East and South is more than 60%, and Hainan Airlines is more than 50%.

From the absolute value of the first three quarters of this year, the cumulative load factor is still the highest of Spring Airlines about 83.87%, an increase of 5.43% year-on-year, and the overall average load factor of Juneyao Airlines and Hainan Airlines has exceeded 75%, respectively, about 77.23%, 75.93%, respectively, year-on-year, an increase of 4.4% and 2.88% respectively, while the overall average load factor of China Eastern Airlines, China Southern Airlines and Air China has exceeded 65%, about 69.96%, 72.56%, 69.6%, respectively. Year-on-year growth was -0.34%, 2.11% and -0.3% respectively.

Analysis: Why can Spring Airlines make a profit?

Faced with the same external environment, why can Spring Airlines make a profit? As the largest low-cost airline in China, Spring Airlines has formed a relatively mature cost and expense control model over the years, effectively "saving money" for the company. Spring Airlines adopts a single aircraft fleet, all composed of Airbus A320 and A321, single class does not have first class, business class, only economy class, high load factor, high aircraft utilization, the use of online direct sales as the main channel, no opening of the market and other low sales costs, greatly saving unnecessary expenses.

Paying special attention to the high load factor, the Beiqing-Beijing headline reporter found that Spring Airlines carried a total of 2.16 million passengers in July this year, an increase of 8.95% month-on-month and 16.65% year-on-year; the load factor was as high as 90.77%, up 3.05% month-on-month. The outbreak of the localized epidemic in late July had less impact on Spring Airlines' operating performance at the beginning of the summer season.

The epidemic was more serious in August, and Spring Airlines was also more affected, with the total number of passengers dropped to 1.5 million, down 30.57% month-on-month and 27.10% year-on-year; the load factor fell below 80%, at 78.62%, down 12.16% month-on-month.

By September, after the epidemic prevention and control stabilized, Spring Airlines immediately showed a rapid recovery trend: the total number of passengers carried reached 1.89 million, up 25.57% month-on-month; the load factor increased to 84.68%, an increase of 6.06% month-on-month.

In response to the question "Have you ever sat on Spring Airlines", I am afraid that the answer of most Beijing passengers is "I have heard of it, I have not sat it". Why have I only heard of it but never sat on Spring Airlines? The main reason is that Spring Airlines has not covered the Beijing market for a long time. Beiqing-Beijing headline reporters could not search for Beijing waypoints on the Spring Airlines booking APP. In fact, as early as 2011, Spring Airlines opened the first Beijing-Shanghai route operated by a private airline at the Capital Airport, but later stopped flights due to poor timing and other reasons. Spring Airlines app search for Beijing departure, will be recommended to Tianjin flight.

It is understood that ten years later, in 2021, spring airlines on October 21 has confirmed its return to the Beijing market, the first route Beijing Daxing airport - Jieyang Chaoshan airport route, but due to the epidemic reasons flights have been suspended.

Text/Beijing Youth Daily reporter Lin Lishuang