China’s airline industry is being buffeted by turbulence from the global economic crisis and has also felt the heat of high fuel prices. Air China and China Eastern Airlines said they would post losses for the first nine months of 2008, and analysts are tipping them to end the year in the red.
Passenger volume at all three of China’s major carriers (the third being China Southern) started to show year-on-year declines in May, after years of steady growth. Travel disruptions caused by natural disasters and the Olympics contributed to the decline.
The airlines may continue to cut back flights on loss-making routes, including long-hauls to reduce costs. If traffic continues to fall, the airlines may file a joint appeal next year to the government for subsidies and tax breaks.