China Southern Airlines Co Ltd Class A

600029: XSHG (CHN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	¥2.53	Xdzkm	Bhnnzdn

Chinese Airlines Earnings: High Jet Fuel Prices and Excess Seat Capacity Weigh on Bottom Line

Cheng Wang

May 13, 2024

The big three Chinese airlines we cover, Air China, China Southern Airlines, and China Eastern Airlines, either made losses or merely broke even in the first quarter. However, passenger traffic numbers have exceeded prepandemic levels. We attribute the results primarily to higher jet fuel prices, which, on average, were 39% higher than that in the first quarter of 2019. In addition, we believe overcapacity in the domestic market constrained the airlines' ability to transfer the increased jet fuel costs to passengers.

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