Air China has shared that in the first half of this year, it lost $1.5bn. The airline announced the news in a report on its interim results following a board meeting last month. Despite this dire figure, Air China is confident it has the steps in place to make the second half of 2020 more profitable.
Air China loses $1.5bn in revenue
Very few airlines will be looking at their first-half financials with hope. There might be optimism but after COVID-19 all but shut down air travel, revenue streams have been cut.
Airlines in Asia were some of the first to feel the effects, particularly those in China. Now, Air China has announced that it experienced a $1.5bn loss in the period between January 1st and June 30th. The majority of its losses it attributes to the pandemic which it said had,
“negative impacts to the global economy, business environment, and directly and indirectly [affected] the operations of the Group.”
In the report, Air China went to on to say that,
“As such, the financial position and performance of the Group were affected as a result of the reduction in revenue…”
How do its figures stack up against 2019?
Passengers within Mainland China stopped traveling soon after Chinese New Year, at which point international borders began to close. This knock-on effect that slowly brought travel demand slumping is the reason why Air China has lost out this year.
In comparison to the same six month period of 2019, Air China has experienced lower operating costs, understandably. As an example, it spent $1bn less of jet fuel. That said, looking at the financial report, that might be the only good news.
In 2019, Air China made a profit of $500m between January 1st and June 30th. Its total income was $9.7bn for the period, whereas this year, it was just $4.5bn.
For the first half of 2020, Air China’s revenue from Mainland China passengers fell by $3.5bn in comparison to the same period in 2019. Likewise, it also lost $1.4bn in revenue from international travelers in the same period.
Paving the way for a better second half
Air China said that it acted quickly when the outbreak first began to spread to maximize its earning potential. For the second half of 2020, it plans to mirror that success by focusing on three points.
Firstly, it wants to prevent the further spread of the pandemic. Next, it intends to provide its customers with the utmost confidence in their health and safety. Finally, it wants to claw back its operations.
Following these steps, it hopes to regain the confidence of passengers in Mainland China and further afield. With any hope, the balance sheet for July to December 2020 will look a lot healthier than the first portion of the year.
Do you think Air China will have a more successful second half of 2020? Let us know your thoughts in the comments.