We Are Reducing Chinese Airlines’ Fair Value Estimates on Expectations of a Slower Recovery

The three Chinese airlines we cover—Air China, China Southern Airlines, and China Eastern Airlines—all reported the largest quarterly losses since the pandemic, ranging from CNY 7 billion to CNY 11 billion. With borders remaining closed and domestic cities under constant lockdowns, heavy losses are set to continue in the second half. We have increased our 2022 loss estimates to CNY 37.7 billion for Air China, CNY 18.1 billion for China Southern, and CNY 28.9 billion for China Eastern. In addition, we expect all three airlines to remain in the negative in 2023.