The Big Three Chinese Airlines Remained Lossmaking in 2023

The preliminary 2023 results for the three Chinese airlines—Air China, China Eastern Airlines, and China Southern Airlines—fell short of our expectations, pointing to deep losses in the fourth quarter. As the passenger traffic is in line with our forecast, we think the miss is mainly due to lower-than-expected passenger yields and possibly also higher-than-expected costs. As such, we lower our 2023 earnings estimate by CNY 2.2 billion-CNY 6.6 billion. We now estimate CNY 1.1 billion losses for Air China, CNY 7.5 billion losses for China Eastern, and CNY 4.0 billion losses for China Southern. We keep our estimates for 2024 and beyond pending more information from the full results.