Air China (753) Q2 2024 earnings summary

Executive summary

• Revenue rose 33.4% year-over-year to RMB79.52 billion, driven by strong recovery in both domestic and international air travel.

• Net loss attributable to shareholders narrowed to RMB2.78 billion from RMB3.45 billion, reflecting improved operating performance despite higher costs.

• Passenger numbers increased 35% year-over-year, with international passenger growth of 333% as global travel resumed.

• No interim dividend was declared for the period.

• Operating expenses increased 29.8% year-over-year, mainly due to higher jet fuel, labor, and maintenance costs.

Financial highlights

• EBITDA grew 9.6% to RMB12.94 billion.

• Operating expenses rose 29.8% to RMB83.85 billion, mainly due to higher jet fuel, labor, and maintenance costs.

• Net cash inflow from operating activities was RMB14.25 billion, down 11.7% year-over-year.

• Total assets reached RMB345.4 billion, with equity attributable to shareholders at RMB36.59 billion.

• Gearing ratio stood at 90.2%, up 0.72 percentage points year-over-year.

Outlook and guidance

• Management expects continued recovery in international travel and plans to expand international routes, especially to "Belt and Road" countries.

• Ongoing cost control, yield management, and digital service upgrades are prioritized to enhance profitability.

• Capital commitments for aircraft and equipment increased 58.7% to RMB114.37 billion, reflecting aggressive fleet expansion.

• Sufficient liquidity with RMB137.67 billion in unutilized bank facilities to support future capital commitments.

• Caution on forward-looking statements due to uncertainties in macroeconomic and industry conditions.