Adds details, background
BEIJING, May 26 (Reuters) – China’s finance ministry said on Thursday it would offer subsidies to Chinese airlines from May 21 to July 20 to help carriers ride out the coronavirus-induced slowdown and rising oil prices.
Cash assistance will only be provided when the average daily number of domestic flights per week is less than or equal to 4,500 flights and when average load factors are below 75%, the ministry said on its website.
The maximum subsidy would be 24,000 yuan ($3,574) per hour loss-making flightsadded the ministry.
Analysts expect another year in the red for Chinese airlines in 2022, on top of heavy losses in the past two years, as Beijing sticks to its zero COVID policy to halt the spread of the virus.
Domestic air traffic plunged due to shutdowns in Shanghai and surrounding cities. Eastern China based in Shanghai 600115.SS said passenger numbers plummeted 90.7% in April year on year, while Shanghai International Airport 600009.SS saw the number of passengers drop by 98.9% over the same period.
Last year, China’s aviation industry recorded a net loss of 84.25 billion yuan last year, compared to 102.96 billion yuan in the red for 2020.
Airlines alone suffered a combined loss of 67.09 billion yuan in 2021.
($1 = 6.7146 Chinese Yuan)
(Reporting by Stella Qiu and Ryan Woo; Editing by Jacqueline Wong and Gerry Doyle)
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