China's biggest airlines enter the peak summer travel season facing a more challenging outlook after warning of heavy first-half losses, with weakening demand raising doubts that they can absorb higher fuel costs during the industry's busiest months.
Reuters – Air China, China Eastern Airlines and China Southern Airlines all warned they expected combined first-half net losses of up to 9 billion yuan ($1.33 billion), a sharp reversal from their combined first-quarter profit, which had been boosted by strong Lunar New Year demand.
The losses underscore the dilemma facing Chinese airlines: raising fares to recover higher fuel costs risks further weakening demand, while keeping ticket prices low leaves carriers absorbing the additional expense.
