China Southern: Profits Up, A380 Out

DALLASChina Southern Airlines (CZ) has posted a modest half-year profit for the first time since the pandemic. For the first six months, it reported an operating profit of CNY1.4bn (US$192m). Revenues were also up 76% to CNY71.8bn (US$9.8bn).

The Guangzhou-based airline becomes the first of China’s ‘Big Three’ carriers to post a profit after accumulating some of the most considerable financial losses from the pandemic. Air China (CA) and China Eastern Airlines (MU) have also reported that their losses have shrunk and increases in passenger revenues. First-half losses at flag carrier CA shrank to CNY3.45bn (US$473.2m) from CNY19.4bn (US$2.6bn). Shanghai-based MU saw profits decrease by around two-thirds to CNY6.3bn (US$864m).

As COVID restrictions eased across the country, domestic travel has increased significantly. China Southern reported that it carried around 65 million passengers, a more than 50% increase on the same period in 2022. This was helped by a rise of 92% in its capacity compared to last year.

China Southern Arlines Airbus A380. Photo: Michał Mendyk/Airways.

A380 Retirement

However, as operations have ramped up, costs have also increased, rising by 35% to CNY72.2bn (US$9.9bn). In a bid to lower these costs, CZ confirmed that it has retired its last two Airbus A380s from the fleet. China Southern was the only operator of the superjumbo in the country. Originally, the carrier had five of the type, used primarily on flights to the US.

China Southern received its first A380 in 2011. However, its future in the fleet was thrown into doubt in early 2021 when the airline said that it was reviewing its operations due to high operating costs and doubts about international traffic recovery.

The airline joins Malaysia Airlines (MH) and Thai Airways (TG) in the Asia-Pacific market, which have retired their superjumbo’s. Qantas (QF) has recently announced its plans to A380 fleet until 2032, while Singapore Airlines (SQ) still boasts 12 of the type in its fleet.

Featured Image: China Southern (B-20C6) Boeing 787-9. Photo: Davide Calabresi/Airways.

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