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China will give cash subsidies to airlines for two months

China will give cash subsidies to airlines for two months

FILE PHOTO: China Eastern Airlines aircraft are seen parked on the tarmac in Hongqiao International Airport in Shanghai, following the coronavirus disease (COVID-19) outbreak, China June 4, 2020. REUTERS/Aly Song

BEIJING: China's finance ministry said on Thursday (May 26) that it would offer subsidies to Chinese airlines from May 21 to July 20 to help carriers weather the coronavirus-induced downturn and higher oil prices.

Cash support will only be provided when the average daily numbers of domestic flights per week are lower or equal to 4,500 flights and when the average load factors are lower than 75 per cent, the ministry said on its website.

The maximum grant would be 24,000 yuan (US$3,574) per hour to the loss-making flights, the ministry added.

Analysts expect another year in the red for Chinese airlines in 2022, on top of heavy losses for the past two years, as Beijing sticks with its zero-COVID policy to stop the spread of the virus.

Domestic air traffic has plunged because of lockdowns in Shanghai and surrounding cities. Shanghai-based China Eastern said passenger numbers collapsed 90.7 per cent in April year on year, while Shanghai International Airport saw passenger numbers down 98.9 per cent in the same period.

Last year, China's aviation industry reported a net loss of 84.25 billion yuan last year, compared with a 102.96 billion yuan in the red for 2020.

Airlines alone suffered a combined loss of 67.09 billion yuan in 2021.

Source: Reuters/gs

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