The total profit of the sector fell 2.4 percent to CNY31.6 billion (USD4.6 billion), the Civil Aviation Administration told Yicai Global yesterday. The cumulative gains of airlines dropped 24.5 percent from the previous year, the report predicted, even if airlines have not published their earnings yet.
Since the beginning of this year, the CAA has ramped up policy support for aviation firms to reduce costs but rising oil prices, increased exchange rate fluctuations, reduced number of business travelers, and fierce competition with high-speed railway operators have caused pressures to build up, Feng Zhenglin, director of the bureau, told Yicai Global.
The macroeconomic slowdown and the halted 737Maxs have also had a certain effect on the growth rate of passenger traffic, said Lin Zhijie, a civil aviation industry insider, said to Yicai Global. After two deadly accidents, the Civil Aviation Administration of China ordered the nation's aviation firms to stop using their 96 Boeing 737 Max planes in March, after which they halted new deliveries of such aircraft.