Jamie Freed and Stella Qiu

BEIJING/SYDNEY – China’s biggest airline companies reported larger third-quarter losses Friday. A resurgence local COVID-19 incidents drove a sharp drop in domestic travel while international borders remained closed.

This was one consequence of the government’s attempt to eradicate COVID-19 from its territory. After each outbreak, flight numbers plummet sharply but then recover once the cases are under control.

Fourth quarter issues are similar to the first, though less severe. According to OAG data, China’s current scheduled air traffic capacity is 4.8% less than the previous week due to minor epidemics.

The country’s flag carrier Air China, based in Beijing (OTC:) Ltd said that its third-quarter net loss was 3.5 billion yuan (547 million yuan) compared to 578 million yuan the previous quarter. This brings the total net loss for the past nine months to 10.3 million yuan.

China Eastern Airlines (NYSE :)’s net loss increased to 3.0 Billion Yuan, from 1.4 Billion Yuan during the second quarter. In the three first quarters, shareholders suffered a loss of 8.2 billion Yuan.

China Southern Airlines’ loss to China increased from 682million yuan during the second quarter, to 1.4billion yuan. This is a 9-month shortfall totaling 6.1 billion Yuan.

Guangzhou-based Airline said that it aims at replenishing its capital through A-share private placing and H-share placement, which will raise up to 4.5 Billion Yuan.

Domestic travel has experienced a major setback with the recent resurgence in COVID-19-related cases involving local airlines and tour groups since late July.

China’s August passenger traffic fell 51.5% compared to one year ago. However, it recovered in September with a decrease of 24.7%, according to official statistics. China’s Civil Aviation Administration (CAAC), has stated that it is looking into additional measures to assist airlines in financial matters.

In order to boost demand, some Chinese airlines also offered “all-you-can fly” promotions in response to the lackluster state of China’s travel market.

Given the slow Chinese market, it appears that the CAAC does not have the urgency to certify Boeing (NYSE 🙂 737 MAX airplanes. It grounded the planes more than two decades ago following two fatal crashes.

According to Reuters, there is a growing possibility that Chinese certification could slip into next year.

Boeing executives spoke out Wednesday during an earnings call, stating that one third of the 370 MAX aircrafts still un delivered are stored for Chinese customers. They also stated that they hope to resume delivery in China within the first quarter 2012.

Guillaume Faury (Airbus chief executive) stated on Thursday that deliveries to China have experienced “ups and falls” depending on China’s COVID-19 condition and customers’ willingness to travel for pick-up.

He stated that September had been difficult for them from that point of view.

($1 = 6.3963 renminbi)