Like other countries, China's aviation industry has suffered massive losses over the past months due to the travel restrictions that have forced airlines to ground flights. For the first quarter of this year, China revealed that its aviation industry had contracted and suffered losses of more than 39.82 billion yuan or roughly around $5.6 billion.
According to a statement released by the Civil Aviation Administration of China (CAAC) on Wednesday, the massive losses were mainly attributed to a significant decline in air passenger traffic. During the first three months of this year, passenger traffic dropped by 53.8 percent to only around 74.08 million.
Travel during the first three months in China was heavily restricted as the country dealt with the rapid spread of the coronavirus throughout the nation. In recent weeks, the country has seen some signs of recovery as cities gradually lift travel and stay-at-home restrictions. However, the CAAC warned that it will likely still take months for economic activity to return to normal levels.
The CAAC stated that production and the resumption of normal business activities are slowly being implemented throughout the nation. As a result, the number of flights is also recovering to some extent but it will likely stay at lower levels in the coming quarters.
This month, shares of China's three largest carriers had rebounded amid the country's continued efforts to reopen factories and businesses. This week, Air China shares gained 3.4 percent. China Southern Airlines gained 1.2 percent, while China Eastern Airlines gained 2.9 percent.
In March, passenger volume in China dropped by 71.7 percent to 15.13 million. The CAAC noted that as carriers cut their flights, cargo demand had increased. Cargo volume had increased by 28.4 percent to 253,000 tons last month, but overall volumes were still 23.4 percent down when compared to the same period last year.
The losses incurred by China's aviation industry are similar in scale to the losses reported by other countries. For the first quarter of the year, airlines around the world had been forced to ground as much as 90 percent of their total capacities. As governments shut down their borders and imposed strict restrictions, demand for travel nose-dived into near zero.
As a whole, the global aviation industry is estimated to lose more than $314 billion in revenues this year. The International Air Transportation Association (IATA) stated that as of this month, global flights have shrunk by more than 80 percent.
Other estimates have pegged that the losses the industry could suffer could reach up to $2 trillion if taking into account other aviation-related industries. This includes airport services, duty-free retailers, and travel services.
