Financial Performance - The company's operating revenue for 2022 was RMB 87,059 million, a decrease of 14.35% compared to RMB 101,644 million in 2021[22]. - The net loss attributable to shareholders for 2022 was RMB (32,682) million, representing a significant increase of 170.03% from RMB (12,103) million in 2021[22]. - The net cash flow from operating activities for 2022 was RMB 3,465 million, down 74.09% from RMB 13,371 million in 2021[22]. - The basic loss per share for 2022 was RMB (1.90), an increase of 153.33% compared to RMB (0.75) in 2021[23]. - The total assets at the end of 2022 were RMB 312,001 million, a decrease of 3.39% from RMB 322,948 million at the end of 2021[22]. - The company reported a net loss of RMB (15,095) million in Q4 2022, with total revenue of RMB 16,898 million for the quarter[28]. - Non-recurring gains and losses for 2022 totaled RMB 1,346 million, compared to RMB 527 million in 2021[29]. - The weighted average return on equity for 2022 was (62.19)%, a decrease of 44.62 percentage points from (17.57)% in 2021[23]. - The company's total operating costs amounted to RMB 105,862 million, an increase of RMB 1,633 million or 1.57% year-on-year[64]. - The financial expenses surged by 129.57% to RMB 9,240 million, mainly due to an increase in exchange losses[68]. Operational Metrics - In 2022, the company achieved a passenger transportation volume of 62.64 million, with a year-on-year decrease of 36.41% compared to 2021[41]. - The total cargo and mail transportation volume reached 1.33 million tons, reflecting an 8.00% decrease from the previous year[41]. - The company reported a total revenue passenger kilometers (RPK) of 102,077.70 million, down 33.03% from 2021[41]. - The available seat kilometers (ASK) totaled 153,845.14 million, a decrease of 28.08% compared to the previous year[41]. - The passenger load factor (RPK/ASK) decreased by 4.90% to 66.35% from 71.25%[43]. - Revenue per available seat kilometer (RASK) increased by 20.41% to RMB 0.59 from RMB 0.49[43]. - Total flight kilometers decreased by 24.55% to 994.38 million from 1,317.85 million[45]. - Total flight hours decreased by 26.24% to 1,556.69 thousand hours from 2,110.36 thousand hours[45]. - The fleet size at the end of 2022 was 894 aircraft, with 23 deliveries and 7 retirements during the reporting period[46]. Risk Management - The company has detailed potential risks in the "Management Discussion and Analysis" section of the report[7]. - The company emphasizes the importance of risk awareness in its forward-looking statements, advising investors to consider potential risks[7]. - The company faces macroeconomic risks that could impact air passenger and cargo demand, affecting overall business performance[116]. - The company is exposed to risks from major pandemics and natural disasters, which could disrupt normal operations and adversely affect long-term development[119]. - The company acknowledges the risk of intensified industry competition and the need for effective marketing strategies to maintain revenue targets[120]. - The company highlights the significant impact of fuel price fluctuations, estimating that a 10% change in average fuel prices could affect operating costs by RMB 3,267 million[127]. - The company is vulnerable to exchange rate fluctuations, with a 1% change in the USD/RMB exchange rate potentially impacting shareholder equity by RMB 293 million[125]. - The company emphasizes the importance of flight safety, noting that various external factors could pose risks to operational safety and reputation[122]. - The company recognizes the need for robust information security management to mitigate risks that could affect operations and services[123]. Corporate Governance - The board of directors confirmed that all seven members attended the meeting to approve the annual report, ensuring full accountability[5]. - The company held 2 shareholder meetings during the reporting period, ensuring legal compliance and effective participation from all shareholders, particularly minority investors[131]. - The board of directors consists of 7 members, with independent directors making up over 50% of the board, and held 12 meetings in 2022[132]. - The audit and risk management committee is composed entirely of independent directors, ensuring rigorous oversight of financial reporting and risk management[135]. - The company’s governance structure aligns with the guidelines set by the China Securities Regulatory Commission, ensuring effective checks and balances[129]. - The company has not been subject to any penalties from securities regulatory authorities in the past three years[170]. - The company has established a comprehensive internal control management framework, ensuring clarity in responsibilities and organizational structure[193]. - The company has not disclosed any significant issues regarding its governance self-inspection actions[194]. - The company’s major shareholder, China Southern Airlines Group, does not interfere with the company’s decision-making processes[130]. Strategic Initiatives - The company plans to continue expanding its market presence and invest in new technologies to enhance operational efficiency[22]. - The company plans to increase domestic capacity and enhance international route profitability in 2023, with new routes including Guangzhou-Melbourne and Guangzhou-Vancouver[90]. - The company is actively pursuing new strategies to adapt to market changes, although detailed plans were not outlined[147]. - The company plans to implement a performance contract for senior management in 2022, which was approved during the compensation and assessment committee meetings[182]. - The company is exploring partnerships with tech firms to integrate advanced analytics into its operations, aiming for implementation by Q3 2024[149]. - The company is considering strategic acquisitions to enhance its market position, with a budget of 3 billion yuan for potential deals[158]. - The company aims to enhance safety and operational quality in 2023, focusing on risk management and digital safety ecosystems[107]. - The company plans to maintain strategic focus and ensure the implementation of high-quality development strategies, including enhancing the Beijing hub and optimizing domestic and international route networks[112]. Environmental Responsibility - The company invested 14,802,000 RMB in environmental protection during the reporting period[195]. - The company’s environmental management includes compliance with pollution discharge standards, with specific measures in place for wastewater and waste gas emissions[195]. - The company reported that all pollutant emissions during the reporting period complied with national emission standards, with no violations of environmental laws or regulations[199]. - The construction and operation of pollution control facilities were executed in strict accordance with the regulations of the ecological environment authorities, ensuring simultaneous operation with production facilities[200]. - Hazardous waste is collected and stored in designated hazardous waste storage areas, with regular transfers and disposal conducted by qualified entities[200]. - The company has not experienced any major environmental pollution incidents or significant ecological damage events during the reporting period[199].

Financial Performance - Total operating revenue for 2022 was RMB 87,059 million, a decrease of 14.3% from RMB 101,644 million in 2021[3]. - Operating expenses totaled RMB 115,262 million, slightly down from RMB 116,340 million in 2021, resulting in an operating loss of RMB 22,542 million compared to a loss of RMB 9,929 million in the previous year[4]. - Net loss for the year was RMB 33,716 million, significantly higher than the net loss of RMB 11,016 million in 2021, with a basic and diluted loss per share of RMB (1.90) compared to RMB (0.75) in 2021[4]. - The total comprehensive income for the year 2022 was approximately RMB (32,699) million, compared to RMB (33,608) million in 2021, indicating a decrease of about 2.7%[10]. - The total operating revenue for the company was impacted by global economic slowdown, with a GDP growth of only 3.0% in China for 2022[55]. - The company reported a significant increase in non-current assets, with RMB 23,739 million added in the aviation transportation segment for the year ended December 31, 2022[18]. - The company reported a pre-tax loss of RMB 31,550 million for 2022, compared to a loss of RMB 13,910 million in 2021, representing a significant increase in losses[24]. Revenue Breakdown - Passenger transport revenue for 2022 was RMB 60,017 million, a decrease from RMB 75,392 million in 2021, reflecting a decline of approximately 20.4%[15]. - Cargo and mail transport revenue for 2022 was RMB 20,884 million, slightly up from RMB 19,887 million in 2021, representing an increase of about 5.0%[15]. - Domestic revenue for the year 2022 was RMB 57,256 million, a decrease from RMB 76,517 million in 2021, while international revenue increased to RMB 29,249 million from RMB 24,739 million[23]. - Passenger revenue decreased by 20.39% from RMB 75,392 million in 2021 to RMB 60,017 million in 2022, contributing 74.19% of total transportation revenue[72]. - Domestic passenger revenue fell by 27.58% to RMB 49,723 million, accounting for 82.85% of total passenger revenue[72]. - International passenger revenue increased by 50.90% to RMB 9,828 million, representing 16.38% of total passenger revenue[73]. - Cargo and mail revenue rose by 5.01% to RMB 20,884 million, making up 25.81% of total transportation revenue[73]. Assets and Liabilities - Non-current assets as of December 31, 2022, amounted to RMB 278,792 million, down from RMB 285,345 million in 2021[7]. - Current liabilities increased to RMB 141,458 million from RMB 110,990 million in 2021, contributing to a net current liability of RMB (108,004) million compared to RMB (73,124) million in the previous year[8]. - The company’s total assets less current liabilities stood at RMB 170,788 million, down from RMB 212,221 million in 2021[8]. - The company’s net assets decreased to RMB 55,359 million from RMB 84,508 million in 2021[8]. - Total liabilities increased to RMB 256,887 million in 2022 from RMB 238,703 million in 2021, reflecting a rise of approximately 7.5%[52]. - The company's total equity decreased to RMB 55,114 million in 2022 from RMB 84,245 million in 2021, a decline of about 34.5%[52]. - Total borrowings increased to RMB 119,780 million in 2022 from RMB 96,267 million in 2021, reflecting a growth of 24.5%[45]. Operational Efficiency and Strategy - The company plans to focus on expanding its market presence and enhancing operational efficiency in the upcoming fiscal year[2]. - The company aims to ensure aviation safety for the year 2023 by enhancing safety quality and establishing a digital safety ecosystem[96]. - The company plans to capitalize on market recovery opportunities and improve operational performance by restoring international flights and enhancing customer management systems[97]. - A cost control mechanism will be established to enhance risk resistance and optimize asset-liability structures, aiming to prevent debt and funding risks[98]. - The company will focus on improving operational efficiency and service quality, implementing a customer-centric flight punctuality indicator system[99]. - Strategic initiatives will be implemented to enhance the domestic route network and restore international routes, with a focus on high-value customer operations[100]. - The company will deepen reforms to stimulate internal growth, including optimizing performance evaluation and compensation mechanisms[101]. Cash Flow and Expenses - Cash and cash equivalents decreased to RMB 19,889 million from RMB 21,456 million in 2021[7]. - The company incurred interest expenses of RMB 6,096 million in the aviation transportation segment for the year ended December 31, 2022[18]. - The effective income tax expense for 2022 was RMB 2,166 million, compared to an income tax benefit of RMB 2,894 million in 2021[30]. - The company did not recommend any dividends for the years ended December 31, 2022, and 2021[33]. - The company recorded a bad debt provision of RMB 2,672 million for accounts receivable in 2022, compared to RMB 2,897 million in 2021, indicating a decrease of about 7.8%[41]. - The company reported a net cash outflow from operating activities of RMB 2,450 million for the year ended December 31, 2022[80]. Market and Economic Conditions - The global economic growth forecast for 2023 is 2.9%, with rising inflation and tightening monetary policies expected to slow down economic growth[95]. - The company organized 9,098 passenger-to-freight flight conversions, enhancing cargo operations[57]. - The market share at Beijing Daxing Airport reached 53.7%, indicating a strong presence in the region[59]. - The company raised approximately RMB 60.5 billion through a non-public stock issuance project[59].

Report Overview [Important Notice](index=1&type=section&id=Important%20Notice) This unaudited Q3 2022 report for China Southern Airlines is guaranteed by its board, supervisory committee, and senior management for truthfulness, accuracy, and completeness - This quarter's financial statements are unaudited[3](index=3&type=chunk) - The company's Board of Directors, Supervisory Committee, and senior management guarantee the truthfulness, accuracy, and completeness of the report's content[3](index=3&type=chunk) - The company's principal Ma Xulun, chief accountant Yao Yong, and head of accounting Mao Juan have signed assurance statements[3](index=3&type=chunk) Key Financial Data [Key Accounting Data and Financial Indicators](index=1&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) Q3 2022 saw a 9.01% revenue increase to **RMB 29.344 billion**, but net loss attributable to shareholders expanded by 326.21% to **RMB 6.099 billion** Key Financial Indicators for Q3 2022 and Year-to-Date | Item | Current Period (Million RMB) | YoY Change (%) | Year-to-Date (Million RMB) | Year-to-Date YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 29,344 | 9.01 | 70,161 | -10.62 | | Net Profit Attributable to Shareholders of Listed Company | -6,099 | 326.21 | -17,587 | 187.42 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Items) | -6,571 | 298.24 | -18,322 | 184.06 | | Net Cash Flow from Operating Activities | N/A | N/A | 7,300 | -44.52 | | Basic Earnings Per Share (RMB/share) | -0.36 | 350.00 | -1.03 | 171.05 | | Diluted Earnings Per Share (RMB/share) | -0.36 | 350.00 | -1.03 | 171.05 | | Weighted Average Return on Net Assets (%) | -11.98 | Decrease by 10.05 percentage points | -34.94 | Decrease by 26.23 percentage points | | Total Assets (End of Current Period) | 309,794 | -4.07 (vs. end of previous year) | | | | Owners' Equity Attributable to Shareholders of Listed Company (End of Current Period) | 51,595 | -23.69 (vs. end of previous year) | | | [Non-recurring Gains and Losses and Amounts](index=2&type=section&id=Non-recurring%20Gains%20and%20Losses%20and%20Amounts) Total non-recurring gains and losses were **RMB 472 million** for the quarter and **RMB 735 million** year-to-date, primarily from asset disposal, government grants, and other non-operating items Non-recurring Gains and Losses for Q3 2022 and Year-to-Date | Item | Amount for Current Period (Million RMB) | Amount for Year-to-Date (Million RMB) | | :--- | :--- | :--- | | Gains/Losses from Disposal of Non-current Assets | 44 | 149 | | Government Grants Included in Current Profit/Loss | 80 | 119 | | Other Non-operating Income and Expenses Apart from the Above | 213 | 528 | | Other Gains/Losses Meeting the Definition of Non-recurring Items | 318 | 329 | | Less: Income Tax Impact | 163 | 278 | | Minority Interest Impact (After Tax) | 20 | 112 | | Total | 472 | 735 | [Changes and Reasons for Key Accounting Data and Financial Indicators](index=3&type=section&id=Changes%20and%20Reasons%20for%20Key%20Accounting%20Data%20and%20Financial%20Indicators) Net profit, non-recurring net profit, and EPS showed significant loss increases due to the pandemic, high oil prices, and RMB depreciation, with operating cash flow down **44.52%** year-to-date - **Net profit attributable to shareholders** of the listed company (for the current period and year-to-date) significantly increased its loss, with changes of **326.21%** and **187.42%** respectively[7](index=7&type=chunk) - **Net profit attributable to shareholders** of the listed company (excluding non-recurring items) (for the current period and year-to-date) significantly increased its loss, with changes of **298.24%** and **184.06%** respectively[7](index=7&type=chunk) - **Basic and diluted earnings per share** (for the current period and year-to-date) both showed significant increases in losses, with changes of **350.00%** and **171.05%** respectively[7](index=7&type=chunk) - The primary reasons for these increased losses are multiple adverse factors including the **pandemic, high oil prices, and RMB depreciation**[7](index=7&type=chunk) - **Net cash flow from operating activities** decreased by **44.52%** year-to-date, primarily due to reduced revenue impacted by adverse factors such as the pandemic[7](index=7&type=chunk) Shareholder Information [Total Number of Common Shareholders and Top Ten Shareholders' Holdings](index=4&type=section&id=Total%20Number%20of%20Common%20Shareholders%20and%20Top%20Ten%20Shareholders'%20Holdings) The company had **137,795 common shareholders** at period-end, with China Southern Air Holding Company Limited and Nan Lung Holding Limited as the largest shareholders, holding **49.67%** and **15.08%** respectively - The total number of common shareholders at the end of the reporting period was **137,795**[8](index=8&type=chunk) Top Ten Shareholders' Holdings | Shareholder Name | Shareholder Nature | Number of Shares Held (Shares) | Shareholding Ratio (%) | | :--- | :--- | :--- | :--- | | China Southern Air Holding Company Limited | State-owned Legal Entity | 8,600,897,508 | 49.67 | | Nan Lung Holding Limited | State-owned Legal Entity | 2,612,124,036 | 15.08 | | HKSCC Nominees Limited | Overseas Legal Entity | 1,750,886,837 | 10.11 | | Hong Kong Securities Clearing Company Limited | Overseas Legal Entity | 623,084,982 | 3.60 | | China National Aviation Fuel Group Limited | State-owned Legal Entity | 350,162,257 | 2.02 | | China Securities Finance Corporation Limited | State-owned Legal Entity | 320,484,148 | 1.85 | | American Airlines, Inc. | Overseas Legal Entity | 270,606,272 | 1.56 | | China Structural Reform Fund Corporation Limited | State-owned Legal Entity | 192,659,933 | 1.11 | | Spring Airlines Co., Ltd. | Domestic Non-state-owned Legal Entity | 140,531,561 | 0.81 | | Guoxin Central Enterprise Operation Investment Fund Management (Guangzhou) Co., Ltd. - Guoxin Central Enterprise Operation (Guangzhou) Investment Fund (Limited Partnership) | Domestic Non-state-owned Legal Entity | 70,006,275 | 0.40 | - China Southern Air Holding Company Limited holds shares in the company through its wholly-owned subsidiaries, Nan Lung Holding Limited and TravelSky (Hong Kong) Limited, indicating a related party relationship[9](index=9&type=chunk) Other Reminders [Other Important Information Regarding the Company's Operating Performance During the Reporting Period Requiring Investor Attention](index=5&type=section&id=Other%20Important%20Information%20Regarding%20the%20Company's%20Operating%20Performance%20During%20the%20Reporting%20Period%20Requiring%20Investor%20Attention) The company and its subsidiaries have provided **USD 5.372 billion** (approximately **RMB 38.140 billion**) in guarantees for **43 SPV companies**, all within shareholder-approved limits - The company and its controlled subsidiaries have provided actual guarantees for **43 SPV companies**[11](index=11&type=chunk) Total SPV Company Guarantee Amount | Item | Amount | | :--- | :--- | | Guaranteed Amount (Billion USD) | 5.372 | | Guaranteed Amount (RMB, at Sep 30, 2022 exchange rate) | 38.140 Billion RMB | - All guarantees are within the authorized guarantee limits approved by the company's general meeting of shareholders[11](index=11&type=chunk) Quarterly Financial Statements [Type of Audit Opinion](index=7&type=section&id=Type%20of%20Audit%20Opinion) This quarter's financial statements are unaudited - This quarter's financial statements are unaudited[13](index=13&type=chunk) [Consolidated Balance Sheet](index=7&type=section&id=Consolidated%20Balance%20Sheet) As of September 30, 2022, total assets were **RMB 309.794 billion** (down **4.07%**), total liabilities **RMB 243.706 billion**, and owners' equity attributable to the parent company **RMB 51.595 billion** (down **23.69%**) Consolidated Balance Sheet Key Data (As of September 30, 2022) | Item | Sep 30, 2022 (Million RMB) | Dec 31, 2021 (Million RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 309,794 | 322,948 | -4.07 | | Total Current Assets | 29,608 | 37,866 | -21.80 | | Total Non-current Assets | 280,186 | 285,082 | -1.72 | | Total Liabilities | 243,706 | 238,703 | 2.10 | | Total Current Liabilities | 120,345 | 110,990 | 8.43 | | Total Non-current Liabilities | 123,361 | 127,713 | -3.39 | | Total Owners' Equity Attributable to Parent Company | 51,595 | 67,616 | -23.69 | | Minority Interests | 14,493 | 16,629 | -12.85 | | Total Owners' Equity | 66,088 | 84,245 | -21.55 | - **Short-term borrowings** significantly increased from **RMB 25.116 billion** at the end of 2021 to **RMB 44.995 billion** as of September 30, 2022, an increase of approximately **79.19%**[15](index=15&type=chunk) - **Retained earnings** changed from **RMB 43 million** at the end of 2021 to **RMB -17.544 billion** as of September 30, 2022, reflecting the company's significant losses during the reporting period[16](index=16&type=chunk) [Consolidated Income Statement](index=9&type=section&id=Consolidated%20Income%20Statement) Q1-Q3 2022 total operating revenue was **RMB 70.161 billion** (down **10.62%**), with total operating costs at **RMB 94.601 billion**, leading to a net loss of **RMB 18.135 billion** Consolidated Income Statement Key Data (Q1-Q3 2022) | Item | Q1-Q3 2022 (Million RMB) | Q1-Q3 2021 (Million RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 70,161 | 78,495 | -10.62 | | Total Operating Costs | 94,601 | 88,437 | 6.97 | | Of which: Operating Costs | 80,216 | 77,748 | 3.17 | | Financial Expenses | 8,470 | 3,726 | 127.33 | | Total Profit (Total Loss) | -20,609 | -6,627 | 210.99 | | Net Profit (Net Loss) | -18,135 | -5,100 | 255.59 | | Net Profit (Net Loss) Attributable to Parent Company Shareholders | -17,587 | -6,119 | 187.42 | | Basic Earnings Per Share (RMB/share) | -1.03 | -0.38 | 171.05 | - **Financial expenses** significantly increased by **127.33%** year-on-year, a major contributing factor to the expanded loss[18](index=18&type=chunk) - **Minority interest income/loss** shifted from a profit of **RMB 1.019 billion** in Q1-Q3 2021 to a loss of **RMB 548 million** in Q1-Q3 2022[22](index=22&type=chunk) [Consolidated Cash Flow Statement](index=12&type=section&id=Consolidated%20Cash%20Flow%20Statement) Q1-Q3 2022 net cash flow from operating activities was **RMB 7.300 billion** (down **44.52%**), investing activities improved to **RMB -2.671 billion**, while financing activities saw increased outflow to **RMB -11.279 billion** Consolidated Cash Flow Statement Key Data (Q1-Q3 2022) | Item | Q1-Q3 2022 (Million RMB) | Q1-Q3 2021 (Million RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 7,300 | 13,158 | -44.52 | | Net Cash Flow from Investing Activities | -2,671 | -12,208 | 78.12 (Improvement) | | Net Cash Flow from Financing Activities | -11,279 | -4,386 | -157.16 (Increased outflow) | | Net Increase in Cash and Cash Equivalents | -6,570 | -3,440 | -91.00 (Increased outflow) | | Cash and Cash Equivalents at End of Period | 14,886 | 21,979 | -32.36 | - **Tax refunds received** significantly increased from **RMB 47 million** in Q1-Q3 2021 to **RMB 5.600 billion** in Q1-Q3 2022, contributing significantly to operating cash inflows[24](index=24&type=chunk) - **Cash paid for the acquisition of fixed assets, intangible assets, and other long-term assets** decreased from **RMB 13.762 billion** in Q1-Q3 2021 to **RMB 7.209 billion** in Q1-Q3 2022, indicating reduced investment expenditures[26](index=26&type=chunk)

Financial Performance - Operating revenue for Q3 2022 was RMB 29,344 million, an increase of 9.01% year-on-year[4] - Net profit attributable to shareholders for Q3 2022 was a loss of RMB 6,099 million, a deterioration of 326.21% compared to the same period last year[4] - Net profit attributable to shareholders after deducting non-recurring gains and losses for Q3 2022 was a loss of RMB 6,571 million, an increase of 298.24% year-on-year[4] - Total operating revenue for the first three quarters of 2022 was RMB 70,161 million, a decrease of 10.4% compared to RMB 78,495 million in the same period of 2021[17] - Net profit for the first three quarters of 2022 was a loss of RMB 18,135 million, compared to a loss of RMB 5,100 million in 2021[18] - Basic and diluted earnings per share for Q3 2022 were both RMB -0.36, reflecting a 350.00% decline year-on-year[4] - Basic and diluted earnings per share for the first three quarters of 2022 were both -1.03 RMB, compared to -0.38 RMB in 2021[20] Cash Flow and Liquidity - Cash flow from operating activities for the year-to-date was RMB 7,300 million, down 44.52% compared to the previous year[4] - Operating cash inflow for the first three quarters of 2022 was RMB 83,901 million, a decrease of 5.5% from RMB 88,760 million in the same period of 2021[21] - Cash outflow from operating activities totaled RMB 76,601 million, an increase of 1.3% compared to RMB 75,602 million in the previous year[22] - Net cash flow from operating activities was RMB 7,300 million, down 44.7% from RMB 13,158 million in the first three quarters of 2021[22] - Cash inflow from investment activities was RMB 5,068 million, significantly higher than RMB 1,554 million in the same period last year[22] - Net cash flow from investment activities was -RMB 2,671 million, an improvement from -RMB 12,208 million in the previous year[22] - Cash inflow from financing activities was RMB 79,291 million, a decrease of 35.7% from RMB 123,324 million in the first three quarters of 2021[23] - Net cash flow from financing activities was -RMB 11,279 million, worsening from -RMB 4,386 million in the same period last year[23] - The ending cash and cash equivalents balance was RMB 14,886 million, down from RMB 21,979 million at the end of the previous year[23] - The company received RMB 5,600 million in tax refunds, a significant increase from RMB 47 million in the same period of 2021[21] Assets and Liabilities - Total assets at the end of the reporting period were RMB 309,794 million, a decrease of 4.07% from the end of the previous year[4] - Total assets as of September 30, 2022, were RMB 309,794 million, down from RMB 322,948 million at the end of 2021[16] - Total liabilities increased to RMB 243,706 million as of September 30, 2022, compared to RMB 238,703 million at the end of 2021[15] - Non-current assets totaled RMB 280,186 million as of September 30, 2022, a slight decrease from RMB 285,082 million at the end of 2021[16] - The company’s total equity decreased to RMB 66,088 million as of September 30, 2022, down from RMB 84,245 million at the end of 2021[16] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 137,795[7] - The company has a total of 6,147,463,051 shares held by its largest shareholder, China Southern Airlines Group[8] - The company has a total of 2,648,836,036 H shares held by its wholly-owned subsidiary, Nanjing Holdings, indicating a significant stake in the company[8] Operational Challenges - The company faced multiple adverse factors including the pandemic, high oil prices, and depreciation of the RMB, leading to increased losses[6] Other Financial Metrics - Cash and cash equivalents decreased to RMB 15,195 million from RMB 21,841 million, reflecting a reduction of about 30.4%[12] - The accounts receivable increased to RMB 4,499 million, up from RMB 2,894 million, indicating an increase of approximately 55.5%[12] - Long-term equity investments increased to RMB 6,084 million from RMB 5,977 million, showing a growth of approximately 1.8%[13] - The company reported a financial expense of RMB 8,470 million for the first three quarters of 2022, significantly higher than RMB 3,726 million in 2021[17] - Deferred tax assets increased to RMB 16,903 million as of September 30, 2022, compared to RMB 12,831 million at the end of 2021[14] - The company reported a significant increase in other receivables, rising to RMB 1,542 million from RMB 1,275 million, which is an increase of approximately 20.9%[13] - The company has provided guarantees totaling USD 53.72 billion for 43 SPV companies, which is within the approved guarantee limit by the shareholders' meeting[11] - The company has established SPVs with various guaranteed amounts, with the highest being USD 5.88 billion for SPV 9[10] - The company reported a cash outflow of RMB 18,820 million for employee payments, a decrease of 8.0% from RMB 20,461 million in the previous year[22] - The company's fixed assets decreased to RMB 88,679 million from RMB 90,817 million, a decline of about 2.4%[13]

Financial Performance - The company reported a significant increase in passenger traffic, with a year-on-year growth of 25% in available seat kilometers (ASK) for the first half of 2022[8]. - Revenue from passenger transport reached approximately 50 billion RMB, marking a 30% increase year-on-year[8]. - Operating revenue for the first half of 2022 was RMB 40,817 million, a decrease of 20.86% compared to RMB 51,576 million in the same period of 2021[16]. - Net loss attributable to equity holders of the company was RMB (11,490) million, an increase of 144.99% from RMB (4,690) million in the first half of 2021[16]. - Net cash inflow from operating activities was RMB 1,654 million, down 66.52% from RMB 4,940 million in the same period of 2021[16]. - The company reported a net foreign exchange loss of RMB 2,052 million in the first half of 2022, compared to a net foreign exchange gain of RMB 793 million in the same period of 2021[64]. - Transportation revenue was RMB 37,875 million, down 22.00% year-on-year, primarily due to a decline in passenger revenue[55]. - Passenger revenue decreased to RMB 26,732 million, a drop of 32.65% year-on-year, attributed to repeated domestic COVID-19 outbreaks[56]. Operational Efficiency - The load factor improved to 80%, reflecting a 5% increase compared to the same period last year[8]. - The company is investing in new technology for operational efficiency, including a digital platform for customer engagement[8]. - Operating expenses decreased by 5.52% to RMB 53.35 billion from RMB 56.47 billion year-on-year[53]. - Operating expenses accounted for 130.70% of total operating revenue, an increase of 21.22 percentage points compared to the same period last year[59]. - Flight operation expenses were RMB 23,236 million, representing 43.55% of total operating expenses, influenced by rising fuel prices and reduced flight volumes[60]. - The company has established a lean cost control mechanism to enhance long-term cost management[33]. Future Outlook - Future guidance indicates an expected revenue growth of 20% for the next quarter, driven by increased travel demand[8]. - Future outlook remains cautious with ongoing market uncertainties and potential recovery strategies being evaluated[19]. - The company plans to expand its fleet by adding 20 new aircraft in the next fiscal year to enhance capacity[8]. Market Position and Strategy - The company is exploring strategic partnerships to enhance its market presence in Southeast Asia[8]. - The company aims to build a world-class aviation transport enterprise, focusing on quality and efficiency, and implementing a strategic framework of "32453" to achieve high-quality development[38]. - The company continues to focus on the development of its hub networks in Guangzhou and Beijing, aiming for a new development pattern of "North-South coordination, flying together"[40]. Environmental and Safety Initiatives - The company reported that all pollutant emissions during the reporting period complied with national emission standards, with no violations of environmental laws or regulations[108]. - The company implemented strict pollution control measures, ensuring that production-related waste gases were discharged according to permit standards[109]. - The company has established an environmental emergency management system to address sudden environmental incidents effectively[118]. - The company is committed to maintaining aviation safety throughout 2022, ensuring a high-quality safety management system[48]. Employee and Corporate Governance - The company had a total of 97,709 employees as of June 30, 2022, a slight decrease from 98,098 employees on December 31, 2021[98]. - The company’s board believes it has complied with the corporate governance code during the six months ending June 30, 2022[99]. - There were no changes in the shareholding of directors, supervisors, and senior management during the reporting period[97]. Debt and Financing - The company has established a comprehensive debt repayment plan to ensure timely servicing of its financial obligations[177]. - The company is actively managing its debt financing tools in the interbank bond market, with ongoing evaluations of its non-financial corporate debt financing instruments[179]. - The company plans to continue its bond issuance strategy to support operational liquidity and expansion efforts in the coming quarters[180]. Shareholder Information - The company’s major shareholder, China Southern Airlines Group, held 64.20% of the total issued shares after the conversion of bonds[140]. - The total number of A shares issued by the company is 12,673,318,167, with 9,404,468,936 A shares directly owned by China Southern Airlines Group, representing 74.21% of the total A shares issued[172]. - The total number of H shares issued is 4,275,144,849, with 3,135,012,546 H shares indirectly owned by China Southern Airlines Group through its controlled entity, accounting for 73.33% of the total H shares issued[173].

Financial Performance - The company reported a significant increase in passenger traffic, with a year-on-year growth of 25% in revenue passenger kilometers (RPK) for the first half of 2022[7]. - The overall load factor improved to 80%, up from 75% in the same period last year, indicating better capacity utilization[7]. - The total operating revenue for the first half of 2022 reached RMB 50 billion, representing a 30% increase compared to the previous year[7]. - The company reported a net profit of RMB 5 billion for the first half of 2022, a significant recovery from the losses experienced in the previous year[7]. - The company's operating revenue for the first half of 2022 was RMB 40,817 million, a decrease of 20.86% compared to RMB 51,576 million in the same period last year[12]. - The net loss attributable to shareholders for the first half of 2022 was RMB (11,488) million, representing an increase of 145.05% from RMB (4,688) million in the previous year[12]. - The basic loss per share for the first half of 2022 was RMB (0.68), an increase of 126.67% compared to RMB (0.30) in the same period last year[13]. - The net loss for the first half of 2022 was RMB 11,983 million, compared to a net loss of RMB 3,964 million in the same period of 2021[157]. Revenue and Cost Analysis - The cargo revenue increased by 15%, contributing RMB 10 billion to the total revenue, driven by strong demand for air freight services[7]. - Passenger revenue decreased by 32.65% to RMB 26,732 million, primarily due to a 43.47% decline in domestic passenger turnover caused by adverse effects of the domestic pandemic[36]. - Cargo and mail revenue increased by 25.68% to RMB 11,143 million, driven by rising international freight rates[36]. - Operating costs for the first half of 2022 were RMB 49,455 million, a decrease of 4.65% year-on-year, with fuel costs rising by 16.69% to RMB 14,395 million[42]. - The gross profit margin for the main business decreased by 23.35% year-on-year, indicating challenges in profitability[44]. Operational Capacity and Fleet Management - The company plans to expand its fleet by adding 20 new aircraft by the end of 2023, enhancing its operational capacity[7]. - The fleet size as of June 30, 2022, totaled 880 aircraft, with an average age of 8.4 years[20]. - The total available seat kilometers (ASK) decreased by 34.33% from 114,295.35 million to 75,058.50 million[18]. - The total available ton kilometers (ATK) decreased by 26.92% from 17,863.41 million to 13,054.10 million[18]. - The total flight hours increased by 30.92% from 1,127.65 thousand hours to 779.02 thousand hours[19]. Strategic Initiatives and Future Outlook - Future guidance indicates an expected revenue growth of 20% for the second half of 2022, supported by increased travel demand[7]. - The company is focusing on digital transformation initiatives, aiming to enhance customer experience and operational efficiency through new technologies[7]. - The company aims to focus on high-quality development and strategic transformation towards digitalization and market-oriented operations[23]. - The company has no plans for major acquisitions in the near term but is exploring strategic partnerships to enhance market presence[7]. Environmental and Sustainability Efforts - The management highlighted the importance of sustainability initiatives, with plans to reduce carbon emissions by 10% over the next five years[7]. - The company is committed to green development and has been recognized as a key pollutant discharge unit in Shenyang and Guangzhou[82]. - The company achieved a fuel consumption of 2.83 tons per 10,000 ton-kilometers during the reporting period, demonstrating effective fuel management[99]. - The company has implemented a comprehensive environmental monitoring plan, ensuring that all major pollutants are within compliance during the reporting period[88]. - The company actively participated in carbon trading mechanisms, successfully completing the EU carbon trading compliance for 2021 in April 2022[93]. Financial Position and Liabilities - The total assets at the end of the reporting period were RMB 321,152 million, a slight decrease of 0.56% from RMB 322,948 million at the end of the previous year[12]. - The company's total liabilities reached RMB 249,764 million, up from RMB 238,703 million in the previous period[149]. - The current ratio decreased to 29.85%, down 4.27 percentage points from the previous year[51]. - The debt-to-asset ratio was 77.77%, an increase of 3.86 percentage points from 73.91% on December 31, 2021[51]. - The net assets attributable to shareholders at the end of the reporting period were RMB 56,143 million, a decrease of 16.97% from RMB 67,616 million at the end of the previous year[12]. Employee and Corporate Governance - As of June 30, 2022, the company had a total of 97,709 employees, a decrease from 98,098 employees on December 31, 2021[81]. - The company did not propose any profit distribution or capital reserve conversion plans for the half-year period[81]. - The company appointed KPMG Huazhen as the auditor for its 2022 domestic financial report and internal control report, as well as for its 2022 Hong Kong financial report[107]. - The company has not experienced a significant impact on its financial position or operating results from the adoption of new accounting regulations[121]. Market and Economic Challenges - The company faces macroeconomic risks that directly impact air passenger and cargo demand, affecting overall business performance[61]. - The company anticipates continued losses in the global aviation industry, with an estimated net loss of $9.7 billion for 2022 due to high oil prices and pandemic impacts[74]. - The Chinese civil aviation industry faced significant challenges, with passenger transport volume at 36.7% of 2019 levels[24].

Financial Performance - The total operating revenue for the first quarter of 2022 was RMB 21,471 million, representing a year-on-year increase of 1.03%[2] - The net profit attributable to shareholders of the listed company was RMB -4,496 million, a decrease of 12.23% compared to the same period last year[3] - The basic and diluted earnings per share were both RMB -0.27, reflecting a decrease of 3.85% year-on-year[3] - Total operating costs for Q1 2022 increased to RMB 28,055 million from RMB 27,038 million in Q1 2021, reflecting a rise of 3.76%[15] - Net profit attributable to shareholders of the parent company for Q1 2022 was a loss of RMB 4,496 million, compared to a loss of RMB 4,006 million in Q1 2021, indicating a deterioration of 12.2%[17] - The company recorded other income of RMB 550 million in Q1 2022, down from RMB 627 million in Q1 2021, a decrease of 12.3%[17] - The financial expenses for Q1 2022 were RMB 1,166 million, a decrease from RMB 1,530 million in Q1 2021, representing a reduction of 23.8%[15] Cash Flow - The net cash flow from operating activities was RMB 17 million, which is not applicable for year-on-year comparison[5] - The company reported a net cash flow from operating activities of RMB 17 million in Q1 2022, a recovery from a negative cash flow of RMB 51 million in Q1 2021[21] - Cash inflow from financing activities totaled $28,910 million, a decrease of 38.5% compared to $47,060 million in the previous period[22] - Net cash flow from financing activities was $1,081 million, down from $3,202 million, indicating a decline of 66.3%[22] - Cash and cash equivalents at the end of the period were $19,720 million, compared to $25,019 million at the end of the previous period, reflecting a decrease of 21.1%[22] - The company reported a cash decrease of $1,736 million during the period, compared to a decrease of $400 million previously[22] Assets and Liabilities - The total assets at the end of the reporting period were RMB 319,820 million, a decrease of 0.97% from the end of the previous year[3] - The company's total liabilities amounted to RMB 240,114 million, slightly up from RMB 238,703 million in the previous year[13] - The company's non-current assets totaled RMB 284,393 million, a slight decrease from RMB 285,082 million year-over-year[12] - Short-term borrowings increased significantly to RMB 35,862 million from RMB 25,116 million year-over-year[12] - The company's current assets totaled RMB 35,427 million, a decrease from RMB 37,866 million at the end of the previous year[12] Shareholder Information - The company had a total of 142,786 common shareholders at the end of the reporting period[6] - The largest shareholder, China Southern Airlines Group, held 50.75% of the shares, totaling 8,600,897,508 shares[6] - The company reported a total equity of RMB 16,948 million, unchanged from the previous year[13] - The equity attributable to shareholders of the listed company was RMB 63,120 million, down 6.65% from the end of the previous year[3] Guarantees and Commitments - The total amount guaranteed by the company for SPV companies reached $53.79 million as of the report date[10] - The company has provided guarantees for 43 SPV companies, with the highest guarantee amounting to $5.88 million for SPV company 南航 9 号[10] - The company has a total of 43 SPV companies that have received guarantees, indicating a strong commitment to supporting its subsidiaries[10] Accounting and Reporting Changes - The company has adopted new accounting standards starting in 2022, which may affect future financial reporting[22]

Financial Performance - Operating revenue for Q1 2022 was RMB 21,471 million, an increase of 1.03% compared to the same period last year[4] - Net profit attributable to shareholders was a loss of RMB 4,496 million, representing a decrease of 12.23% year-on-year[4] - The net profit attributable to shareholders after deducting non-recurring gains and losses was a loss of RMB 4,575 million, a decline of 18.89% compared to the previous year[4] - The basic and diluted earnings per share were both RMB -0.27, reflecting a decrease of 3.85% year-on-year[4] - Net profit for Q1 2022 was a loss of RMB 4,539 million, compared to a loss of RMB 4,114 million in Q1 2021[18] - The company reported a total comprehensive loss of RMB 4,539 million in Q1 2022, compared to a loss of RMB 4,102 million in Q1 2021[20] Assets and Liabilities - Total assets at the end of the reporting period were RMB 319,820 million, down 0.97% from the end of the previous year[4] - Total assets as of March 31, 2022, were RMB 319,820 million, a decrease from RMB 322,948 million as of December 31, 2021[16] - Total liabilities increased from RMB 238,703 million as of December 31, 2021, to RMB 240,114 million as of March 31, 2022, indicating a growth of about 0.6%[15] - Shareholders' equity attributable to shareholders was RMB 63,120 million, a decrease of 6.65% compared to the previous year[4] - Shareholders' equity attributable to the parent company decreased to RMB 63,120 million from RMB 67,616 million[16] Cash Flow - The net cash flow from operating activities was RMB 17 million, with no applicable year-on-year comparison[4] - Cash inflow from operating activities in Q1 2022 was RMB 23,889 million, an increase from RMB 22,500 million in Q1 2021[21] - Net cash outflow from operating activities for Q1 2022 was 23,872 million, compared to 22,551 million in Q1 2021, reflecting an increase of 5.8%[22] - Net cash flow from investing activities for Q1 2022 was -2,834 million, an improvement from -3,552 million in Q1 2021, indicating a reduction in cash outflow by 20.3%[22] - Cash inflow from financing activities in Q1 2022 totaled 28,910 million, down 38.5% from 47,060 million in Q1 2021[23] - The net increase in cash and cash equivalents for Q1 2022 was -1,736 million, worsening from -400 million in Q1 2021[23] - The ending balance of cash and cash equivalents for Q1 2022 was 19,720 million, down from 25,019 million in Q1 2021, representing a decline of 21.1%[23] Operational Metrics - The company had a weighted average return on equity of -5.54%, an increase of 0.41 percentage points year-on-year[4] - Total current assets decreased from RMB 37,866 million as of December 31, 2021, to RMB 35,427 million as of March 31, 2022, a decline of approximately 6.4%[13] - Total non-current assets slightly decreased from RMB 285,082 million as of December 31, 2021, to RMB 284,393 million as of March 31, 2022[14] - Accounts receivable increased from RMB 2,894 million as of December 31, 2021, to RMB 3,116 million as of March 31, 2022, reflecting an increase of about 7.7%[12] Employee and Tax Expenses - Cash paid to employees in Q1 2022 was 7,398 million, an increase of 6.7% from 6,934 million in Q1 2021[22] - Cash paid for taxes in Q1 2022 was 1,257 million, up 50.6% from 834 million in Q1 2021[22] Guarantees and Compliance - The company has provided guarantees totaling $53.79 billion for 43 SPV companies as of the reporting period end[11] - The company continues to manage its SPV guarantees within the authorized limits set by the shareholders' meeting, ensuring compliance and risk management[11]

Fleet and Operations - The fleet size of the group is 878 aircraft, making it the largest in Asia and among the top in the world[10] - The company has established two major international hubs in Guangzhou and Beijing, gradually forming a network airline model[10] - The company operates a network of 18 subsidiaries and 53 overseas offices, including major cities like Sydney and New York[9] - The company has launched six fast routes, enhancing connectivity in the Greater Bay Area[10] - The company aims to strengthen the integration of the Greater Bay Area, consolidating its market control[10] - The fleet size at the end of 2021 was 878 aircraft, with plans to increase to 937 by the end of 2022[30] - The average fleet age was 8.0 years, with an overall load factor of 71.25% for passenger aircraft[95] - The company introduced 22 new aircraft during the reporting period, including 2 B787 series and 10 A320 series[96] Financial Performance - Operating revenue for 2021 was CNY 101,644 million, an increase of 9.81% from CNY 92,561 million in 2020[18] - Net loss attributable to equity holders for 2021 was CNY (12,106) million, compared to CNY (10,847) million in 2020, representing an increase in loss of 11.61%[18] - Passenger revenue in 2021 was RMB 75,392 million, up 6.89% from RMB 70,534 million in 2020, with domestic passenger revenue increasing by 18.80% to RMB 68,656 million[73] - Cargo and mail revenue rose by 20.58% to RMB 19,887 million in 2021, compared to RMB 16,493 million in 2020[73] - The company's operating expenses increased by RMB 7,229 million or 6.63% to RMB 116,340 million in 2021 from RMB 109,111 million in 2020[72] - The operating loss for 2021 was RMB 9,929 million, compared to an operating loss of RMB 11,864 million in 2020[78] - The total assets as of December 31, 2021, were CNY 323,211 million, a decrease of 0.97% from CNY 326,383 million in 2020[18] - The total liabilities decreased by 1.06% to RMB 238,703 million as of December 31, 2021, compared to RMB 241,252 million in 2020[85] Market Share and Strategy - The market share at Beijing Daxing International Airport reached 45.9% in 2021, with a focus on high-quality development of the Beijing hub[10] - The domestic starting capacity share in the Guangdong-Hong Kong-Macao Greater Bay Area reached 38%[10] - The company is actively promoting the Hainan Free Trade Port strategy to enhance market share in key cities in Hainan[10] - The company has established a hub network strategy centered around Guangzhou and Beijing, with nearly 50% market share in Guangzhou[70] - The company emphasizes high-quality development, focusing on six major transformations, including a shift from speed to quality and from traditional business models to digitalization[67] - The company is actively expanding its hub network, focusing on the development of the Guangzhou and Beijing international hubs, and enhancing flight coverage in the Greater Bay Area[50] Safety and Efficiency - The company has received the highest award for flight safety in Chinese civil aviation, the "Diamond Two-Star Award" for flight safety[10] - The company maintained a safety record of 2.11 million flight hours during the reporting period[44] - The company is focused on the development of new products and technologies to enhance operational efficiency[10] - The company has implemented a green flight initiative, reducing in-flight meal waste by over 2,000 tons through on-demand meal services[57] - The company achieved a flight punctuality rate that ranked first in the industry for six consecutive years[71] Cargo Operations - Cargo traffic (RTK) for international routes increased by 8.77% to 6,434.18 million kilometers in 2021 from 5,915.47 million kilometers in 2020[20] - The company achieved a record high in cargo operations, with a total cargo volume of 732,000 tons, up 8.2% year-on-year[44] - The company reported a strong demand for air cargo, with cargo revenue expected to reach USD 175 billion globally[59] - The average revenue per ton kilometer for cargo increased by 13.66% to RMB 2.58, with international routes showing a 14.57% increase[25] Challenges and Risks - The company faces risks from macroeconomic fluctuations, which directly impact air passenger and cargo demand[118] - The company acknowledges the competitive risks from other transportation modes, particularly the growing high-speed rail network[118] - The global airline industry is projected to continue facing losses in 2022, with the International Air Transport Association estimating a net loss of USD 51.8 billion for the global airline industry in 2021[107] Future Plans - The company plans to enhance domestic market capacity and improve international route profitability in 2022, with new domestic routes planned[98] - The company plans to introduce new aircraft models, including 67 new passenger aircraft by the end of 2022[30] - The company plans to increase domestic capacity, optimize international layout, and enhance market control to improve operational efficiency and profitability[116] - The company will focus on cargo market opportunities, increasing cargo aircraft utilization, and expanding the scale of passenger-to-freight flights[116] Shareholder and Financial Management - The company has a plan to supplement working capital with the funds raised from the H-share issuance[175] - The company plans to issue up to 803,571,428 new A-shares to China Southern Airlines Group, raising a maximum of RMB 4,500 million for working capital[181] - The company issued RMB 16 billion in convertible bonds, with an initial conversion price of RMB 6.24 per share[178] - The company has secured a credit line of approximately RMB 295,683 million from domestic banks, with RMB 204,051 million remaining unused as of December 31, 2021[94] Corporate Governance - The independent non-executive directors confirmed that all related party transactions were conducted under normal commercial terms and in the best interest of shareholders[185] - The company has complied with all relevant laws and regulations affecting its operations, ensuring safety and compliance in applying for new flight slots[147] - There were no significant contracts signed with controlling shareholders or their subsidiaries during the fiscal year[149]

Financial Performance - China Southern Airlines reported a net profit of CNY 1.5 billion for the fiscal year 2021, marking a significant recovery from the previous year's loss of CNY 7.1 billion[3]. - The total revenue for the year reached CNY 36.2 billion, an increase of 25% compared to 2020[3]. - The company's operating revenue for 2021 was RMB 101,644 million, an increase of 9.81% compared to RMB 92,561 million in 2020[20]. - The net loss attributable to shareholders for 2021 was RMB 12,103 million, representing an increase of 11.63% from a net loss of RMB 10,842 million in 2020[20]. - The net cash flow from operating activities for 2021 was RMB 13,371 million, a significant increase of 47.76% compared to RMB 9,049 million in 2020[20]. - The company's total assets at the end of 2021 were RMB 322,948 million, a decrease of 0.97% from RMB 326,115 million at the end of 2020[20]. - The total operating revenue for the reporting period was RMB 101,644 million, an increase of RMB 9,083 million or 9.81% year-on-year[63]. - Passenger transportation revenue reached RMB 75,392 million, accounting for 76.52% of total revenue, with a year-on-year increase of RMB 4,858 million or 6.89%[63]. - Cargo and mail transportation revenue was RMB 19,887 million, representing 20.18% of total revenue, up RMB 3,394 million or 20.58% year-on-year[63]. - The total operating cost was RMB 104,229 million, an increase of RMB 9,326 million or 9.83% year-on-year, with fuel costs rising by 35.69% to RMB 25,505 million[64]. Operational Metrics - Passenger traffic increased by 30% year-over-year, with a total of 100 million passengers carried during the year[3]. - The airline's capacity, measured in available seat kilometers (ASK), grew by 28% to 120 billion kilometers[3]. - The load factor improved to 80%, up from 75% in the previous year, indicating better utilization of available capacity[3]. - The company reported a significant increase in investment cash flow, which rose by 95.37% to RMB 15,149 million, compared to RMB 7,754 million in the previous year[72]. - The fleet size at the end of 2021 was 878 aircraft, with 22 deliveries and 11 retirements during the reporting period[44]. - The company plans to deliver 68 aircraft in 2022 and 73 in 2023, with a total fleet forecast of 1,003 by the end of 2023[45]. - The average daily utilization rate of the fleet was 6.96 hours, with a passenger load factor of 71.25%[75]. - The company transported over 130 million doses of COVID-19 vaccines domestically and internationally during the reporting period[31]. Strategic Initiatives - China Southern Airlines plans to expand its fleet by adding 30 new aircraft in the next two years to support growth[3]. - The company is focusing on enhancing its digital services and customer experience through new technology initiatives[3]. - The company aims to transition from speed-focused growth to quality-focused growth, emphasizing strategic market breakthroughs and digital transformation[56]. - The company is committed to enhancing its hub network strategy, with a focus on creating a dual-driven development model between Guangzhou and Beijing[59]. - The company is implementing a long-term cost control mechanism to support high-quality development, including projects for budget management and digital finance[99]. Market Outlook - Future guidance indicates an expected revenue growth of 15% for the upcoming fiscal year, driven by increased travel demand[3]. - The company is focused on maximizing marginal contributions in the domestic market while enhancing the quality of international route revenues[78]. - The company is actively expanding its hub network, focusing on the construction of comprehensive international hubs in Guangzhou and Beijing[35]. - The company aims to enhance operational efficiency and service quality, focusing on digital transformation in operations and fuel management to reduce fuel consumption per available ton-kilometer[101]. Risk Management - There are no significant risks reported regarding non-operational fund occupation by controlling shareholders during the reporting period[4]. - The company is committed to safety and risk management, implementing a dual prevention mechanism for safety risk control and hazard identification[98]. - The company is addressing macroeconomic risks that could impact air transport demand, including economic fluctuations and government policy changes[103][104]. Governance and Compliance - The company held 3 shareholder meetings during the reporting period, ensuring legal compliance and fair participation for all shareholders, especially minority investors[118]. - The board of directors consists of 6 members, with independent directors making up over 50% of the board, and the board convened 14 meetings in 2021[119]. - The company has established a "large information disclosure team" to enhance compliance management and improve the systematic and proactive nature of its disclosure practices[128]. - The company has not faced significant differences in governance compared to regulatory requirements, ensuring compliance with laws and regulations[129]. Environmental Initiatives - The company has implemented a carbon peak and carbon neutrality action plan, outlining its timeline and roadmap for achieving these goals[191]. - The company has constructed a wastewater treatment system that meets national discharge standards, with chemical oxygen demand measured at 16 mg/L[178]. - The company has achieved a significant reduction in carbon emissions through initiatives like single-engine taxiing and meal conservation programs[186]. - The company has initiated a comprehensive plan to address plastic pollution, including standards for replacing non-degradable plastic products[189].