中国国航(601111) - 2024 Q2 - 季度财报

Company Information Air China is China's exclusive flag carrier, listed in Hong Kong, London, and Shanghai, headquartered in Beijing - Air China is China's sole flag carrier, listed in Hong Kong and London in 2004, and Shanghai in 2006, with its headquarters in Beijing[2] Financial Data Summary The company reported increased operating revenue and a narrowed loss attributable to shareholders in the first half of 2024 2024 H1 Income Statement Summary | Metric (RMB thousands) | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Operating Revenue | 79,520,332 | 59,613,193 | | Operating Loss | (1,081,972) | (898,200) | | Loss Attributable to Equity Holders of the Company | (2,778,953) | (3,446,814) | | Loss Per Share Attributable to Equity Holders of the Company (RMB) | (0.1767) | (0.2239) | 2024 H1 Balance Sheet Summary | Metric (RMB thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 345,400,348 | 335,278,694 | | Total Liabilities | 311,551,672 | 300,014,685 | | Equity Attributable to Equity Holders of the Company | 36,587,810 | 37,205,975 | - In the first half of 2024, the company's operating revenue increased year-on-year, and the loss attributable to shareholders narrowed from RMB 3.447 billion in the prior period to RMB 2.779 billion[7] Business Operations Data Summary The company experienced significant growth in capacity and passenger traffic, leading to improved load factors, despite a decline in unit passenger yield - In the first half of 2024, the company's overall capacity (Available Seat Kilometers) increased by 33.38% year-on-year, with international route capacity surging by 210.41%; passenger traffic (Revenue Passenger Kilometers) grew by 49.96%, and the overall passenger load factor improved by 8.77 percentage points to 79.29%[10] 2024 H1 Key Operating Data | Metric | 2024 H1 | 2023 H1 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Available Seat Kilometers (Millions) | 171,790.89 | 128,799.56 | 33.38% | | Revenue Passenger Kilometers (Millions) | 136,213.57 | 90,835.35 | 49.96% | | Passenger Load Factor | 79.29% | 70.52% | +8.77 percentage points | | Number of Passengers (Thousands) | 74,959.47 | 55,544.89 | 34.95% | | Cargo and Mail (Tons) | 701,598.29 | 429,444.60 | 63.37% | | Overall Load Factor | 65.86% | 58.15% | +7.70 percentage points | - Despite improvements in passenger and overall load factors, unit yield declined, with revenue per Revenue Passenger Kilometer decreasing by 12.08% year-on-year, and international routes experiencing the largest drop at 36.61%, while revenue per Revenue Freight Ton Kilometer increased by 14.91%[11] Fleet Development The group's fleet expanded to 915 aircraft with an average age of 9.64 years, with plans for significant future additions and retirements - As of June 30, 2024, the group's fleet comprised 915 aircraft with an average age of 9.64 years, following the introduction of 16 new aircraft and the retirement of 6[12] Fleet Composition (As of June 30, 2024) | Aircraft Series | Quantity | Average Age (Years) | | :--- | :--- | :--- | | Airbus Series | 437 | 9.29 | | Boeing Series | 447 | 10.46 | | COMAC Series | 27 | 1.66 | | Business Jets | 4 | 10.78 | | Total | 915 | 9.64 | - The group plans to introduce 164 aircraft from Airbus, Boeing, and COMAC series between 2024 and 2026, while also planning to retire 32 aircraft[14] Business Overview The company focused on enhancing safety, operational efficiency, service quality, brand value, and synergistic development across its subsidiaries Safety Operations During the reporting period, the group prioritized safety, achieving 1.438 million safe flight hours and successfully completing key transportation support missions - The group achieved 1.438 million safe flight hours in the first half of the year, successfully completing critical transportation support tasks for events like the Spring Festival travel rush and the "Two Sessions," ensuring absolute safety[16] Efficiency Enhancement The group implemented various strategies to improve operational efficiency, including increasing domestic capacity, restoring international routes, refining marketing, and strengthening cost control - The company significantly increased capacity in the domestic market to develop express routes while steadily resuming and launching new international routes to expand operational scale[17] - Revenue quality was enhanced through scientific pricing of connecting products, adjusting premium cabin price gradients, optimizing frequent flyer policies, and strengthening passenger-cargo synergy[17] Service Improvement The company continuously enhanced service quality and passenger experience by optimizing special passenger services, launching cultural events, introducing new express products, and advancing digital service transformation - Focusing on passenger concerns, the company optimized services for special passengers, irregular flights, and ticketing, while launching brand activities such as the "Phoenix Pavilion" cultural exhibition[18] - Accelerated digital service transformation, promoted a global ground flight support platform, and advanced the development of a full-process service information notification system and in-flight meal pre-order management system[18] Brand Value The company actively promoted brand leadership, enhancing its influence through participation in major exhibitions and strengthening international cooperation, maintaining a leading position in China's aviation service industry - According to the World Brand Lab's ranking, Air China was listed 25th in the 2024 China's 500 Most Valuable Brands, with a brand value of RMB 259.695 billion, a year-on-year increase of RMB 24.533 billion[19] Synergistic Development The company adopted a centralized and synergistic development model, enhancing efficiency and competitive strength through integrated network planning, intermodal transport, and mobile ticketing across its subsidiaries - In the first half of the year, intermodal segments within the Air China Group increased by 216% year-on-year, with gradual implementation of mobile inter-group flight sales and one-stop ticket changes/refunds[20] Operating Performance of Major Subsidiaries and Associates Major subsidiaries like Shenzhen Airlines and Shandong Airlines Group reported revenue growth, with Shandong Airlines Group turning profitable, while associate Cathay Pacific achieved a significant profit attributable to equity holders Performance Summary of Major Subsidiaries and Associates (RMB billions) | Company Name | Company's Shareholding Percentage | Operating Revenue | Profit/(Loss) Attributable to Equity Holders | Prior Period Profit/(Loss) Attributable to Equity Holders | | :--- | :--- | :--- | :--- | :--- | | Shenzhen Airlines | 51% | 16.018 | (1.374) | (1.420) | | Shandong Airlines Group | 66% | 9.781 | 0.026 | 0.357 | | Air Macau | 66.92% | 1.473 | (0.378) | (0.173) | | Ameco | 75% | 5.718 | 0.266 | 0.134 | | Cathay Pacific | 29.99% | 45.112 | 3.067 | 3.593 | Employee Information As of the reporting period, the company and its subsidiaries employed 103,159 staff, with a compensation philosophy focused on job value, individual capability, and performance outcomes - As of the reporting period, the company had 46,656 employees and its subsidiaries had 56,503 employees[25] Management Discussion and Analysis This section provides an in-depth analysis of the company's financial performance, operational results, and key risk factors during the reporting period Operating Revenue The group's operating revenue increased by 33.39% to RMB 79.52 billion, driven by a significant 34.43% growth in air transportation revenue, particularly from international routes Operating Revenue Composition (RMB billions) | Item | 2024 H1 | 2023 H1 | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 79.520 | 59.613 | 33.39% | | Air Transportation Revenue | 76.466 | 56.880 | 34.43% | | Other Operating Revenue | 3.054 | 2.733 | 11.74% | Passenger Revenue Passenger revenue grew by 31.85% to RMB 73.137 billion, primarily due to increased capacity and load factor, though partially offset by a decline in unit yield, with international passenger revenue showing the strongest growth - Passenger revenue growth was primarily driven by increased capacity and passenger load factor, but revenue per Revenue Passenger Kilometer decreased by 12.08% year-on-year, negatively impacting revenue growth[29][30] Cargo and Mail Transportation Revenue Cargo and mail transportation revenue surged by 136.08% to RMB 3.328 billion, driven by increases in capacity, load factor, and unit yield, with international cargo revenue being the primary growth driver - Cargo and mail transportation showed strong performance, with capacity (Available Freight Ton Kilometers) increasing by 49.66%, load factor improving by 9.92 percentage points, and unit yield growing by 14.91%, collectively driving significant revenue growth[32][33] Operating Expenses The group's operating expenses increased by 29.84% to RMB 83.853 billion, primarily due to higher aviation fuel costs, landing and parking fees, aircraft maintenance, and staff costs, correlating with increased business volume Major Operating Expense Items (RMB billions) | Expense Item | 2024 H1 | 2023 H1 | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Total Operating Expenses | 83.853 | 64.581 | 29.84% | | Aviation Fuel Costs | 27.132 | 19.347 | 40.24% | | Staff Costs | 16.954 | 13.595 | 24.71% | | Depreciation and Amortization | 14.025 | 12.705 | 10.39% | | Landing and Parking Fees | 9.963 | 6.636 | 50.15% | - Aviation fuel costs increased by RMB 7.785 billion year-on-year, mainly due to higher fuel consumption and rising jet fuel prices, while landing and parking fees increased by RMB 3.328 billion due to more take-offs and landings[36] Financial Position and Performance The group significantly narrowed its net exchange loss to RMB 360 million, reduced interest expenses, and recognized RMB 1.085 billion in profit from associates, primarily from Cathay Pacific, though this contribution decreased year-on-year - Net exchange loss was RMB 360 million, a year-on-year reduction of RMB 1.205 billion[37] - Profit from associates was RMB 1.085 billion, with Cathay Pacific contributing RMB 1.067 billion in investment income, though this contribution decreased by RMB 212 million year-on-year[38] Asset and Liability Structure Analysis As of the reporting period, the group's total assets reached RMB 345.40 billion, with total liabilities at RMB 311.552 billion, resulting in a 90.20% debt-to-asset ratio, and interest-bearing debt totaling RMB 237.735 billion - Total assets increased by 3.02% from the end of 2023 to RMB 345.40 billion, with cash and cash equivalents increasing by 32.94% to RMB 19.964 billion[39] - Total liabilities increased by 3.85% from the end of 2023 to RMB 311.552 billion, with the debt-to-asset ratio rising by 0.72 percentage points to 90.20% from the beginning of the year[43][46] - Capital expenditures totaled RMB 5.921 billion during the reporting period, primarily for aircraft, engines, and related investments[41] Liquidity and Funding Sources The group primarily met its funding needs through operating activities and external financing, with net cash inflow from operating activities at RMB 14.253 billion and substantial unused bank credit lines available Cash Flow Summary (RMB billions) | Cash Flow Item | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 14.253 | 16.142 | | Net Cash Outflow from Investing Activities | 8.177 | 2.032 | | Net Cash (Outflow)/Inflow from Financing Activities | (1.154) | 1.046 | - As of the reporting period, the company had total bank credit facilities of RMB 230.587 billion, with approximately RMB 137.665 billion unused, sufficient to meet liquidity and capital expenditure needs[47] Potential Risks The group faces significant external environment risks, including market volatility, oil price fluctuations, and exchange rate changes, alongside competitive pressures from industry peers and high-speed rail External Environment Risks External risks include market, oil price, and exchange rate fluctuations, with uneven international market recovery, particularly slow recovery in North American routes, and significant impacts of oil price and exchange rate changes on costs and profits - If the average jet fuel price increases or decreases by 5%, the group's aviation fuel costs would change by approximately RMB 1.357 billion[48] - A 1% appreciation or depreciation of the RMB against the USD would result in a change of approximately RMB 227 million in the group's net profit and shareholders' equity[48] Competition Risks The company faces intense peer competition due to wide-body aircraft redeployment to domestic routes amid incomplete international market recovery, and ongoing passenger diversion risks from high-speed rail development - The strategy to address this is to adhere to the hub network strategy, building world-class hubs in Beijing and Chengdu, achieving differentiated development, and consolidating core markets with high-quality products[49] Corporate Governance and Other Information This section details changes in the company's board and management, shareholder structure, significant corporate actions, and dividend policy Changes in Directors, Supervisors, and Senior Management Information During and after the reporting period, the company's board and senior management underwent several changes, including new appointments and departures due to retirement or age - During the reporting period, Mr. Yan Fei was appointed Vice President, and Mr. Xiao Feng was appointed Board Secretary and Joint Company Secretary, while Mr. Chen Zhiyong and Mr. Huang Bin retired from their respective positions[52] Shareholding Structure As of the reporting period, controlling shareholder CNAC Group held a combined 51.32% stake, with Cathay Pacific as the second-largest shareholder at 15.87% - Controlling shareholder CNAC Group, through direct and indirect holdings via its wholly-owned subsidiary CNAC Limited, collectively controls 51.32% of the company's shares[56][59] - Cathay Pacific Airways Limited holds 2,633,725,455 H shares, representing 15.87% of the total share capital, making it a major shareholder of the company[56] Other Significant Matters The company completed a private placement of H-shares raising approximately HKD 2 billion and signed an agreement to purchase 100 C919 aircraft for about USD 10.8 billion, approved by shareholders - In February 2024, the company completed a private placement of 392,927,308 H shares to CNAC Limited, raising net proceeds of approximately HKD 1.999 billion for working capital replenishment[63][64] - In April 2024, the company signed an agreement with COMAC to purchase 100 C919 aircraft for a total basic price of approximately USD 10.8 billion, with the transaction approved by shareholders in August[63] Interim Dividend The company's board of directors decided not to declare an interim dividend for the six months ended June 30, 2024 - The company will not distribute an interim dividend for 2024[70] Review Report on Condensed Consolidated Financial Statements Deloitte Touche Tohmatsu, the international auditor, reviewed the interim condensed consolidated financial statements and found no material non-compliance with IAS 34 - International auditor Deloitte Touche Tohmatsu reviewed the interim condensed consolidated financial statements in accordance with Hong Kong Standards on Review Engagements, noting no matters that would lead them to believe the financial statements were not prepared in all material respects in accordance with International Accounting Standard 34[75][76] Condensed Consolidated Financial Statements This section presents the company's core financial statements, including income, comprehensive income, balance sheet, equity changes, and cash flow statements, along with detailed explanatory notes Condensed Consolidated Income Statement This statement details the company's revenues, various costs and expenses, pre-tax loss, and final net loss for the reporting period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement extends the net loss by incorporating other comprehensive income or expenses, such as fair value changes of financial instruments and foreign currency translation differences, to arrive at the total comprehensive expense for the period Condensed Consolidated Statement of Financial Position This statement presents the detailed composition of the company's assets, liabilities, and shareholders' equity at the end of the reporting period, reflecting its financial condition Condensed Consolidated Statement of Changes in Equity This statement details the changes in various components of shareholders' equity, including share capital, capital reserves, and retained earnings, influenced by factors such as net loss and new share issuance during the reporting period Condensed Consolidated Cash Flow Statement This statement clearly presents the company's cash flows categorized into operating, investing, and financing activities, showing cash inflows and outflows during the reporting period Notes to the Condensed Consolidated Financial Statements This section provides detailed explanations and supplementary information for key items in the financial statements, including accounting policies, segment information, revenue breakdown, related party transactions, and commitments, essential for understanding the financial reports Glossary of Technical Terms This section defines specialized aviation industry terms used in the report, such as 'Available Ton Kilometers,' 'Revenue Passenger Kilometers,' and 'Passenger Load Factor,' to aid reader comprehension - This section explains specialized aviation industry terms used in the report, such as 'Available Ton Kilometers,' 'Revenue Passenger Kilometers,' and 'Passenger Load Factor,' to help readers understand the meaning of operational data[155][156][157] Definitions This section provides clear definitions for specific terms and abbreviations used throughout the report, such as 'Ameco,' 'CNAC Group,' and 'Shandong Airlines Group' - This section provides clear definitions for specific terms and abbreviations used in the report, such as 'Ameco,' 'CNAC Group,' and 'Shandong Airlines Group'[160][161]