China’s Big 3 Airlines Slump After Covid Outbreaks Bash Earnings

(Bloomberg) -- China’s three main airlines slid in Monday morning trade in Shanghai and Hong Kong in the wake of disappointing earnings announcements. 

China Southern Airlines Co., Air China Ltd. and China Eastern Airlines Corp. were rooted to the bottom of a Bloomberg gauge of Asia-Pacific airline stocks, their A shares in Shanghai falling more than 3%.

China Southern fell as much as 5.8%, its biggest intraday loss since Sept. 13. In addition to posting a net loss of 1.4 billion yuan ($219 million) in the third quarter, versus net income of 711 million yuan a year earlier, the carrier said it plans to raise about $930 million through share sales.  

In its statement late Friday, China Southern said several Covid outbreaks during the third quarter impacted the peak summer travel period. Air China slumped as much as 7.8% in Shanghai, its biggest decline since February 2020. 

China imposed flight restrictions and targeted lockdowns to contain the spread of the delta variant, initially tied to airport cleaning staff. Domestic air traffic had recovered to around pre-pandemic levels prior to that. International flights are still way off that point due to border controls and curbs on foreign travel. 

Elsewhere, Singapore Airlines Ltd. and Qantas Airways Ltd. rose Monday morning following news the Australian states of New South Wales and Victoria will allow quarantine-free travel from Singapore from Nov. 21. 

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