中国国航(00753) - 2025 - 中期业绩

Announcement and Basic Information This section provides disclaimers, essential company information, and the announcement date for the unaudited interim results Disclaimer The HKEX and HKSE disclaim responsibility for the announcement's content and any losses incurred from relying on it - The Hong Kong Stock Exchange and the Stock Exchange of Hong Kong assume no responsibility for the content of this announcement[1] Company Information The company is a joint stock limited company registered in the PRC with stock code 00753 - The company is a joint stock limited company registered in the People's Republic of China, stock code: 00753[2] Results Announcement Date The Board approved the unaudited interim results for the six months ended June 30, 2025, on August 28, 2025 - The Board approved the unaudited interim results for the six months ended June 30, 2025, on August 28, 2025[3][4] Consolidated Financial Statements This section presents the group's consolidated financial performance and position, including income, comprehensive income, and balance sheets Consolidated Income Statement The group saw slight revenue growth but expanded operating loss, while loss attributable to shareholders narrowed for the six months ended June 30, 2025 | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 80,757,434 | 79,520,332 | 1.56% | | Other income and gains | 2,615,845 | 3,250,850 | -19.53% | | Operating loss | (1,696,430) | (1,081,972) | 56.79% | | Loss before tax | (2,787,902) | (3,286,075) | -15.16% | | Loss for the period | (2,710,105) | (3,538,611) | -23.42% | | Loss attributable to shareholders of the Company | (1,804,820) | (2,778,953) | -35.05% | | Loss per share (basic and diluted) | RMB(0.11) | RMB(0.18) | -38.89% | - Operating loss expanded from RMB 1.082 billion in the same period of 2024 to RMB 1.696 billion in the same period of 2025, an increase of 56.79%[5] - Loss attributable to shareholders of the Company narrowed from RMB 2.779 billion in the same period of 2024 to RMB 1.805 billion in the same period of 2025, a decrease of 35.05%[5] Consolidated Statement of Profit or Loss and Other Comprehensive Income Total comprehensive income for the period remained negative but narrowed year-on-year, mainly due to foreign currency translation differences | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (2,710,105) | (3,538,611) | -23.42% | | Other comprehensive income for the period (net of related income tax) | (701,811) | 310,122 | -326.29% | | Total comprehensive income for the period | (3,411,916) | (3,228,489) | 5.68% | | Total comprehensive income attributable to shareholders of the Company | (2,504,603) | (2,433,924) | 2.90% | - Foreign currency translation differences shifted from a RMB 137 million gain in the same period of 2024 to a RMB 363 million loss in the same period of 2025[6] Consolidated Statement of Financial Position As of June 30, 2025, total assets slightly increased, current assets grew significantly, but net assets decreased, and net current liabilities improved | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 347,539,122 | 345,750,173 | 0.52% | | Non-current assets | 299,788,972 | 305,062,970 | -1.73% | | Current assets | 47,750,150 | 40,687,203 | 17.37% | | Current liabilities | (126,209,104) | (137,610,055) | -8.30% | | Non-current liabilities | (183,100,021) | (167,214,148) | 9.50% | | Net assets | 38,229,997 | 40,925,970 | -6.60% | | Equity attributable to shareholders of the Company | 42,623,569 | 45,128,172 | -5.55% | - Cash and cash equivalents increased from RMB 21.039 billion as of December 31, 2024, to RMB 25.331 billion as of June 30, 2025, a growth of 20.40%[7][54] - Net current liabilities decreased from RMB 96.923 billion as of December 31, 2024, to RMB 78.459 billion as of June 30, 2025, an improvement of 18.99%[8][63] Notes to the Unaudited Interim Financial Information This section details the basis of preparation, revenue breakdown, segment information, and specific financial items Basis of Preparation Interim financial information is prepared under IAS 34 and HKEX Listing Rules, reviewed by KPMG, and based on a going concern despite net current liabilities - The interim financial information is prepared in accordance with International Accounting Standard 34 and the disclosure requirements of the Hong Kong Stock Exchange Listing Rules, with accounting policies consistent with the 2024 annual financial statements and no changes occurring[9] - This interim financial information is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[9] - As of June 30, 2025, the Group had net current liabilities of approximately RMB 78.459 billion, but with cash inflows from operating activities and unused bank credit facilities of RMB 180.093 billion, the Board believes the Group has sufficient funds for continuous operation[10] Revenue Breakdown Total group revenue increased by 1.56% year-on-year, primarily driven by air transportation, with significant growth in aircraft maintenance revenue | Revenue Category | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Air transportation - Passenger | 73,196,376 | 73,137,116 | 0.08% | | Air transportation - Cargo and mail | 3,577,468 | 3,328,452 | 7.48% | | Air transportation - Other | 921,734 | 859,569 | 7.23% | | Other - Aircraft maintenance revenue | 2,825,795 | 2,023,821 | 39.63% | | Total | 80,757,434 | 79,520,332 | 1.56% | - Aircraft maintenance revenue significantly increased by 39.63% year-on-year, reaching RMB 2.826 billion[11] Segment Information The group operates in air transportation and other operations segments, with air transportation as the main revenue source and growing other operations - The Group has two reportable operating segments: "Air Transportation" (passenger and cargo) and "Other Operations" (aircraft maintenance and other aviation-related services)[13] - The Group has two reportable operating segments: Air Transportation (passenger and cargo) and Other Operations (aircraft maintenance and other aviation-related services)[13] External Customer Sales Revenue by Segment | Segment | June 30, 2025 External Customer Sales Revenue (RMB thousands) | June 30, 2024 External Customer Sales Revenue (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Air Transportation | 77,869,936 | 77,438,760 | 0.56% | | Other Operations | 2,887,498 | 2,081,572 | 38.72% | | Total | 80,757,434 | 79,520,332 | 1.56% | Pre-tax (Loss) / Profit by Segment | Segment | June 30, 2025 Pre-tax (Loss) / Profit (RMB thousands) | June 30, 2024 Pre-tax (Loss) / Profit (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Air Transportation | (3,185,233) | (3,715,694) | -14.39% | | Other Operations | 388,330 | 502,625 | -22.74% | | Total (IFRS) | (2,787,902) | (3,286,075) | -15.16% | Operating Segment Classification The group's reporting segments are air transportation (passenger and cargo) and other operations (aircraft maintenance and related services) - The Group's reportable operating segments include "Air Transportation" and "Other Operations"[13] Segment Results Air transportation segment's pre-tax loss narrowed, while other operations' pre-tax profit decreased, with slight increases in total assets and liabilities | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Air Transportation Segment Assets | 334,218,916 | 335,387,462 | -0.35% | | Other Operations Segment Assets | 29,253,558 | 35,068,041 | -16.60% | | Total Assets (IFRS) | 347,539,122 | 345,750,173 | 0.52% | | Total Liabilities (IFRS) | 309,309,125 | 304,824,203 | 1.47% | Geographical Segment Revenue International route revenue grew significantly by 15.02%, while mainland China revenue slightly decreased, and Hong Kong, Macau, and Taiwan revenue grew steadily | Region | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Mainland China | 56,277,430 | 57,960,673 | -2.90% | | Hong Kong, Macau and Taiwan, China | 2,539,842 | 2,484,032 | 2.25% | | International | 21,940,162 | 19,075,627 | 15.02% | | Total | 80,757,434 | 79,520,332 | 1.56% | - International route revenue increased from 23.99% in 2024 to 27.17% in 2025[16] Other Income and Gains Total other income and gains decreased by 19.53% year-on-year, mainly due to a significant reduction in gains from disposal of property, plant, and equipment | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue from code-share flights and subsidies | 2,407,102 | 2,232,415 | 7.83% | | Gains on disposal of property, plant, equipment and right-of-use assets | 22,327 | 775,226 | -97.12% | | Dividend income | 13,131 | 5,935 | 121.25% | | Total | 2,615,845 | 3,250,850 | -19.53% | Operating Loss The group's operating loss is primarily influenced by depreciation and amortization costs, particularly for property, plant, and equipment and right-of-use assets | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 7,072,151 | 6,505,225 | 8.71% | | Depreciation of right-of-use assets | 7,748,718 | 7,503,289 | 3.27% | | Depreciation of investment properties | 16,767 | 16,767 | 0.00% | | Amortisation of intangible assets | 2 | 4 | -50.00% | Interest Expense Total interest expense decreased by 9.40% year-on-year, driven by lower interest on interest-bearing loans and lease liabilities, alongside increased capitalized interest | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on interest-bearing loans | 1,951,327 | 2,215,565 | -11.93% | | Interest on lease liabilities | 1,114,236 | 1,192,838 | -6.60% | | Total interest expense | 3,070,710 | 3,411,031 | -9.98% | | Less: Capitalized interest | (179,756) | (145,558) | 23.49% | | Net interest expense | 2,890,954 | 3,265,473 | -11.46% | - The annual interest rate for capitalized borrowing costs during this period ranged from 1.95% to 2.80%, lower than the 2.40% to 4.45% in the same period last year[19] Income Tax Income tax shifted from an expense to a credit, mainly due to deferred income tax becoming a credit and reduced current income tax in mainland China | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Current income tax - Mainland China | 120,343 | 201,017 | -40.00% | | Deferred income tax | (200,560) | 50,201 | -499.52% | | Total income tax (credit) / expense | (77,797) | 252,536 | -130.81% | - Companies within the Group in Mainland China are subject to a corporate income tax rate of 25%, with some branches and subsidiaries enjoying a preferential tax rate of 15%[21] Dividends The Board did not recommend an interim dividend for the six months ended June 30, 2025, nor a dividend for the year 2024 - The Company did not recommend an interim dividend for the first half of 2025 or a dividend for the year 2024[23][24] - Dividend distribution is based on the lower of profits determined under China Accounting Standards and International Financial Reporting Standards[22] Loss Per Share Basic and diluted loss per share for the six months ended June 30, 2025, narrowed to RMB(0.11) from RMB(0.18) in the prior year | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the Company (RMB billions) | 1.805 | 2.779 | -35.05% | | Weighted average number of ordinary shares outstanding (shares) | 16,658,566,736 | 15,723,985,056 | 5.94% | | Loss per share (RMB) | (0.11) | (0.18) | -38.89% | - The Group had no potentially dilutive ordinary shares during these two periods, thus basic loss per share is the same as diluted loss per share[26] Trade Receivables Total trade receivables increased by 30.33% year-on-year, with the largest portion due within 30 days, but receivables over 90 days also increased | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Within 30 days | 3,640,790 | 2,963,962 | 22.84% | | 31 to 60 days | 499,885 | 147,934 | 237.91% | | 61 to 90 days | 76,653 | 139,120 | -44.90% | | Over 90 days | 565,841 | 419,236 | 35.00% | | Total | 4,783,169 | 3,670,252 | 30.33% | Trade Payables Total trade payables increased by 4.15% year-on-year, with a notable increase in payables over 90 days | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Within 30 days | 8,148,551 | 8,354,764 | -2.47% | | 31 to 60 days | 2,286,119 | 2,009,755 | 13.75% | | 61 to 90 days | 4,623,235 | 4,806,725 | -3.82% | | Over 90 days | 4,595,477 | 3,698,540 | 24.25% | | Total | 19,653,382 | 18,869,784 | 4.15% | Summary of Business Operating Data This section provides key operational metrics including capacity, traffic, passenger and cargo volumes, load factors, utilization, revenue, and unit costs Capacity The group's total available seat kilometers and available freight tonne kilometers increased, with significant international capacity expansion and a slight decrease in mainland China | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Available Seat Kilometers (millions) | 177,576.14 | 171,790.89 | 3.37% | | International Available Seat Kilometers (millions) | 51,445.77 | 44,082.60 | 16.70% | | Mainland China Available Seat Kilometers (millions) | 121,132.50 | 122,675.40 | (1.26%) | | Available Freight Tonne Kilometers (millions) | 6,425.74 | 6,122.03 | 4.96% | | International Available Freight Tonne Kilometers (millions) | 3,055.74 | 2,577.25 | 18.57% | Traffic The group achieved growth in revenue passenger kilometers and revenue freight tonne kilometers, with significant increases in international passenger and cargo traffic | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Revenue Passenger Kilometers (millions) | 143,336.58 | 136,213.57 | 5.23% | | International Revenue Passenger Kilometers (millions) | 39,337.74 | 33,625.02 | 16.99% | | Revenue Freight Tonne Kilometers (millions) | 2,408.59 | 2,237.13 | 7.66% | | International Revenue Freight Tonne Kilometers (millions) | 1,560.66 | 1,409.88 | 10.69% | Passenger and Cargo/Mail Volume Both passenger numbers and cargo/mail volume increased, with international passenger numbers showing the largest growth | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Passenger Numbers (thousands) | 77,114.33 | 74,959.47 | 2.87% | | International Passenger Numbers (thousands) | 8,939.31 | 7,535.97 | 18.62% | | Cargo and Mail (tons) | 735,334.14 | 701,598.29 | 4.81% | Load Factor The group's passenger load factor and overall load factor improved, but international cargo and mail load factor decreased | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Passenger Load Factor | 80.72% | 79.29% | 1.43 percentage points | | International Passenger Load Factor | 76.46% | 76.28% | 0.19 percentage points | | Cargo and Mail Load Factor | 37.48% | 36.54% | 0.94 percentage points | | International Cargo and Mail Load Factor | 51.07% | 54.70% | (3.63 percentage points) | | Overall Load Factor | 67.10% | 65.86% | 1.25 percentage points | Utilization Aircraft daily utilization slightly decreased | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Aircraft Daily Utilization (block hours per aircraft per day) | 8.76 | 8.79 | (0.03 hours) | Yield Revenue per revenue passenger kilometer and per revenue freight tonne kilometer slightly decreased, but passenger and cargo yields in Hong Kong, Macau, and Taiwan increased | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Revenue per Revenue Passenger Kilometer (RMB) | 0.5107 | 0.5369 | (4.88%) | | Mainland China Revenue per Revenue Passenger Kilometer (RMB) | 0.5134 | 0.5475 | (6.23%) | | Hong Kong, Macau and Taiwan Revenue per Revenue Passenger Kilometer (RMB) | 0.6683 | 0.6578 | 1.60% | | Revenue per Revenue Freight Tonne Kilometer (RMB) | 1.4853 | 1.4878 | (0.17%) | | Mainland China Revenue per Revenue Freight Tonne Kilometer (RMB) | 0.9419 | 0.9035 | 4.25% | | Hong Kong, Macau and Taiwan Revenue per Revenue Freight Tonne Kilometer (RMB) | 3.3024 | 3.1906 | 3.50% | Unit Cost The group's operating expenses per available seat kilometer and per available tonne kilometer both decreased | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Operating Expenses per Available Seat Kilometer (RMB) | 0.4791 | 0.4881 | (1.84%) | | Operating Expenses per Available Tonne Kilometer (RMB) | 3.7930 | 3.8809 | (2.26%) | Fleet Information As of the reporting period, the group's fleet expanded to 934 aircraft with an average age of 10.28 years, with clear plans for future aircraft introduction and retirement - In the first half of 2025, the Group introduced 9 aircraft (including 1 A320 series, 5 B737 series, 1 C919, 2 C909) and retired 5 aircraft[32] - As of the end of the reporting period, the Group's fleet comprised 934 aircraft with an average age of 10.28 years[32] Fleet Size and Age As of the reporting period, the group's fleet comprised 934 aircraft with an average age of 10.28 years, including 510 aircraft in the Company's fleet with an average age of 9.92 years | Series | Subtotal | Owned | Finance Lease | Operating Lease | Average Age (years) | | :--- | :--- | :--- | :--- | :--- | :--- | | Airbus Series | 430 | 196 | 115 | 119 | 10.14 | | Boeing Series | 462 | 191 | 97 | 174 | 11.11 | | COMAC Series | 39 | 27 | 12 | – | 2.02 | | Business Jets | 3 | 1 | – | 2 | 9.31 | | Total | 934 | 415 | 224 | 295 | 10.28 | Future Fleet Introduction and Retirement Plan The group plans to introduce 141 aircraft and retire 36 between 2025-2027, with a focus on COMAC series aircraft | Series | 2025 Introduction | 2026 Introduction | 2027 Introduction | 2025 Retirement | 2026 Retirement | 2027 Retirement | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Airbus Series | 22 | 27 | 24 | 13 | 13 | 3 | | Boeing Series | 13 | 2 | 21 | 5 | 1 | 1 | | COMAC Series | 12 | 10 | 10 | – | – | – | | Total | 47 | 39 | 55 | 18 | 14 | 4 | - The COMAC series aircraft (C909 and C919) have a stable introduction plan over the next three years, indicating investment in domestically produced aircraft[34] Business Overview This section highlights the group's achievements in safety, efficiency, service quality, digital transformation, and brand value Safety Operations The group achieved 1.465 million safe flight hours, completed critical special charter and rescue missions, and strengthened safety responsibilities - The Group achieved 1.465 million safe flight hours and successfully completed multiple special charter flight missions[35] - Important missions such as overseas cultural relic repatriation, Myanmar/Tibet earthquake relief, and Iran evacuation were executed, demonstrating political responsibility and social commitment[35] Quality Improvement, Efficiency, and Network Strategy The group focused on enhancing quality and efficiency, deepening its hub network strategy, optimizing routes, and expanding international and "Belt and Road" markets - Steadfastly implemented the "four maximization" production organization principles, deepened the hub network strategy, continuously optimized the route network, and meticulously built domestic express routes[36] - Steadily advanced the opening and resumption of international routes, focusing on developing markets along the "Belt and Road" initiative[36] - Innovated and upgraded distinctive benefit products such as the "New Traveler Program, Vitality Silver Age Program, and Student Zone," and deeply promoted cost control and centralized fund management[36] Service Quality The group is committed to improving service quality by revising standards, enriching branded products, expanding convenient services, and accelerating platform development - Revised key service standards such as service compensation, optimized satisfaction survey analysis, and established a ticket policy coordination and payment monitoring mechanism[37] - Added the "Zichen" VIP lounge in Urumqi, launched "Hangzhou-Chengdu" express route and "Chongqing-Shenzhen" city express route, enriching the express product system[37] - Enriched APP payment methods, introduced functions such as passport chip scanning and inter-airline special service booking, and expanded air-rail intermodal services to 73 cities[37] Digital and Intelligent Transformation The group is accelerating digital and intelligent transformation across safety, marketing, and customer service, and building an AI+ platform - The global ground flight support platform covers all branches, achieving visualized flight monitoring and support, intelligent scheduling, and mobile frontline operations[38] - Phase II of the business model project is fully operational, enhancing precise marketing and diversified product management capabilities[38] - Actively promoted artificial intelligence applications, developing key applications such as intelligent customer service and smart maintenance, and building a group-wide AI+ platform[38] Brand Value The group aims to build a world-class brand, actively promotes its brand overseas, and maintains leading positions in global and domestic brand value rankings - Participated in the 20th Western China International Fair, showcasing practical achievements in serving national strategies and empowering regional economies[39] - Air China ranked 26th in the "2025 China Brand Global Communication Power Top List," the only airline to be included in the list[39] - Air China ranked 25th in the 2025 "China's 500 Most Valuable Brands" list, with a brand value of RMB 275.576 billion, maintaining its leading position in the domestic aviation service industry[39] Management Discussion and Analysis of Financial Condition and Operating Results This section provides management's perspective on revenue, expenses, financial position, and liquidity Operating Revenue Analysis The group's operating revenue increased by 1.56% year-on-year, driven by air transportation and other operating income, with strong international route growth Operating Revenue by Category | Revenue Category | June 30, 2025 (RMB billions) | June 30, 2024 (RMB billions) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 80.757 | 79.520 | 1.56% | | Air Transportation Revenue | 76.774 | 76.466 | 0.40% | | Other Operating Income | 3.983 | 3.054 | 30.41% | Total Operating Revenue Total operating revenue increased by 1.56% to RMB 80.757 billion, with other operating income growing significantly by 30.41% - Operating revenue increased by RMB 1.237 billion year-on-year, a growth of 1.56%[41] - Other operating income increased by RMB 929 million year-on-year, a growth of 30.41%[41] Geographical Segment Revenue Contribution International revenue grew by 15.02%, increasing its share to 27.17%, while mainland China revenue decreased by 2.90% | Region | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | International | 21,940,162 | 19,075,627 | 15.02% | | Mainland China | 56,277,430 | 57,960,673 | (2.90%) | | Hong Kong, Macau and Taiwan | 2,539,842 | 2,484,032 | 2.25% | | Total | 80,757,434 | 79,520,332 | 1.56% | Passenger Revenue Passenger revenue slightly increased by 0.08%, with increased capacity and load factor offset by lower yield, while international passenger revenue grew by 16.09% - Passenger revenue was RMB 73.196 billion, an increase of RMB 59 million year-on-year[44] - Increased capacity contributed RMB 2.463 billion to revenue, increased load factor contributed RMB 1.361 billion, while decreased yield reduced revenue by RMB 3.765 billion[44] Key Passenger Metrics | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Available Seat Kilometers (millions) | 177,576.14 | 171,790.89 | 3.37% | | Passenger Load Factor (%) | 80.72 | 79.29 | 1.43 percentage points | | Revenue per Revenue Passenger Kilometer (RMB) | 0.5107 | 0.5369 | (4.88%) | Passenger Revenue by Region | Region | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | International Passenger Revenue | 19,233,312 | 16,567,178 | 16.09% | | Mainland China Passenger Revenue | 51,523,843 | 54,187,183 | (4.92%) | Cargo and Mail Transportation Revenue Cargo and mail transportation revenue increased by 7.48%, primarily due to higher capacity and load factor, with international cargo and mail revenue up by 7.91% - Cargo and mail transportation revenue was RMB 3.577 billion, an increase of RMB 249 million year-on-year[47] - Increased capacity contributed RMB 165 million to revenue, and increased load factor contributed RMB 90 million[47] Key Cargo Metrics | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Available Freight Tonne Kilometers (millions) | 6,425.74 | 6,122.03 | 4.96% | | Load Factor (%) | 37.48 | 36.54 | 0.94 percentage points | | Revenue per Revenue Freight Tonne Kilometer (RMB) | 1.4853 | 1.4878 | (0.17%) | Cargo and Mail Revenue by Region | Region | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | International Cargo and Mail Revenue | 2,706,850 | 2,508,449 | 7.91% | | Mainland China Cargo and Mail Revenue | 769,997 | 718,726 | 7.13% | Operating Expense Analysis The group's operating expenses increased by 1.45% year-on-year, with lower aviation fuel costs offset by increases in landing and parking fees, depreciation, and staff costs | Expense Category | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Aviation Fuel Costs | 24,327,485 | 27,132,269 | (10.34%) | | Landing and Parking Fees | 10,613,810 | 9,963,482 | 6.53% | | Depreciation and Amortization | 14,837,638 | 14,025,285 | 5.79% | | Staff Costs | 17,849,218 | 16,953,921 | 5.28% | | Aircraft Maintenance, Repair and Overhaul Costs | 7,292,075 | 6,862,447 | 6.26% | | Other Operating Expenses | 4,836,492 | 3,886,126 | 24.46% | | Total Operating Expenses | 85,069,709 | 83,853,154 | 1.45% | - Aviation fuel costs decreased by RMB 2.805 billion year-on-year, primarily due to lower aviation fuel prices[53] - Other operating expenses increased by RMB 950 million year-on-year, mainly due to increased production and operational input and changes in contract performance costs of subsidiary maintenance enterprises[53] Net Exchange Gains and Interest Expense The group recorded net exchange gains of RMB 176 million, a turnaround from a net loss, and interest expense decreased by RMB 375 million | Item | June 30, 2025 (RMB billions) | June 30, 2024 (RMB billions) | Change | | :--- | :--- | :--- | :--- | | Net Exchange Gains | 0.176 | (0.360) | 148.89% | | Interest Expense (excluding capitalized portion) | 2.891 | 3.265 | (11.46%) | Share of Results of Associates and Joint Ventures Share of profit from associates increased by RMB 135 million, significantly contributed by Cathay Pacific, and share of profit from joint ventures increased by RMB 26 million | Item | June 30, 2025 (RMB billions) | June 30, 2024 (RMB billions) | Change | | :--- | :--- | :--- | :--- | | Share of profit from associates | 1.220 | 1.085 | 12.44% | | Share of investment income from Cathay Pacific | 1.174 | 1.068 | 9.93% | | Share of profit from joint ventures | 0.117 | 0.091 | 28.57% | Analysis of Asset Position Total assets slightly increased, with significant growth in cash and cash equivalents, while pledged assets and restricted cash also expanded, and capital expenditures focused on aircraft and long-term investments - As of the end of the reporting period, the Group's total assets were RMB 347.539 billion, an increase of 0.52% compared to December 31, 2024[54] - Cash and cash equivalents amounted to RMB 25.331 billion, an increase of 20.40% compared to December 31, 2024[54] - The Group pledged aircraft and buildings with a book value of approximately RMB 4.669 billion, and land use rights of approximately RMB 23 million[55] - Capital expenditure during the reporting period totaled RMB 5.859 billion, primarily including aircraft-related investments (RMB 2.362 billion) and long-term investment projects (RMB 2.726 billion)[56] Total Asset Composition Current assets constitute 13.74% and non-current assets 86.26% of total assets, with property, plant, and equipment and right-of-use assets totaling RMB 237.141 billion - Current assets accounted for 13.74% of total assets, and non-current assets accounted for 86.26%[54] Pledged Assets As of the reporting period, the group pledged approximately RMB 4.669 billion in aircraft and buildings, and approximately RMB 23 million in land use rights. Restricted cash was approximately RMB 2.591 billion - Pledged assets had a book value of approximately RMB 4.669 billion (aircraft and buildings) and RMB 23 million (land use rights)[55] - Restricted cash amounted to approximately RMB 2.591 billion, mainly comprising statutory reserves, pledged bank deposits, margins, and time deposits exceeding three months[55] Capital Expenditure Capital expenditure totaled RMB 5.859 billion, primarily for aircraft and engine purchases, long-term investments, and infrastructure - Capital expenditure totaled RMB 5.859 billion[56] - Aircraft-related investments totaled RMB 2.362 billion, and the cash portion of long-term investment projects was RMB 2.726 billion[56] Equity Investments The group's equity investments in associates totaled RMB 14.286 billion, including RMB 13.951 billion in Cathay Pacific. Equity investments in joint ventures totaled RMB 2.486 billion - Equity investments in associates amounted to RMB 14.286 billion, a decrease of 2.37% compared to December 31, 2024[57] - The equity investment balance in Cathay Pacific was RMB 13.951 billion[57] - Equity investments in joint ventures amounted to RMB 2.486 billion, an increase of 2.57% compared to December 31, 2024[57] Analysis of Debt Structure Total liabilities increased by 1.47%, with non-current liabilities accounting for nearly 60%, while current interest-bearing debt decreased and non-current interest-bearing debt increased, with RMB-denominated debt over 80% - As of the end of the reporting period, the Group's total liabilities were RMB 309.309 billion, an increase of 1.47% compared to December 31, 2024[58] - Current liabilities accounted for 40.80% of total liabilities, and non-current liabilities accounted for 59.20%[58] - Current interest-bearing debt decreased by 16.64%, while non-current interest-bearing debt increased by 10.77%[58] Total Liability Composition Current liabilities account for 40.80% and non-current liabilities for 59.20% of the group's total liabilities - Current liabilities amounted to RMB 126.209 billion, and non-current liabilities amounted to RMB 183.100 billion[58] Currency Classification of Interest-Bearing Debt The group's interest-bearing debt is predominantly denominated in RMB (88.85%), with USD-denominated debt decreasing to 10.96% | Currency | June 30, 2025 (RMB thousands) | Proportion | December 31, 2024 (RMB thousands) | Proportion | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | RMB | 209,851,014 | 88.85% | 205,662,318 | 87.15% | 2.04% | | USD | 25,877,883 | 10.96% | 29,874,295 | 12.66% | (13.38%) | | Other | 449,659 | 0.19% | 443,893 | 0.19% | 1.30% | | Total | 236,178,556 | 100.00% | 235,980,506 | 100.00% | 0.08% | - The Group did not use financial instruments for hedging purposes[59] Commitments and Contingent Liabilities Capital commitments for future aircraft purchases totaled RMB 93.20 billion, investment commitments were RMB 267 million, with no significant contingent liabilities - Capital commitments amounted to RMB 93.200 billion, a decrease of 2.07% compared to December 31, 2024[60] - Investment commitments amounted to RMB 267 million, a decrease of 14.70% compared to December 31, 2024[60] - As of the end of the reporting period, the Group had no significant contingent liabilities[61] Gearing Ratio As of the reporting period, the group's gearing ratio was 89.00%, an increase of 0.84 percentage points from December 31, 2024 | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 89.00% | 88.16% | 0.84 percentage points | Liquidity and Funding Sources Net current liabilities decreased, the current ratio improved, and net cash inflow from operating activities increased. Net cash outflow from financing activities significantly rose, mainly due to loan repayments. The company has ample bank credit facilities - Net current liabilities amounted to RMB 78.459 billion, a decrease of RMB 18.464 billion compared to December 31, 2024[63] - The current ratio was 0.38, an increase of 0.08 compared to December 31, 2024[63] Cash Flow by Category | Cash Flow Category | June 30, 2025 (RMB billions) | June 30, 2024 (RMB billions) | Change | | :--- | :--- | :--- | :--- | | Net cash inflow from operating activities | 14.828 | 14.253 | 4.03% | | Net cash outflow from investing activities | (7.338) | (8.177) | -10.26% | | Net cash outflow from financing activities | (3.218) | (1.154) | 178.99% | - The Company has obtained bank credit facilities of RMB 278.622 billion, of which RMB 180.093 billion remains unused[63] Potential Risks This section outlines external environmental risks such as market, fuel price, and exchange rate fluctuations, as well as competitive risks - The accelerating evolution of the international political and economic landscape creates uncertainty in the company's traditional advantageous international markets, especially the North American market[64] - If the average aviation fuel price increases or decreases by 5%, the Group's aviation fuel costs will increase or decrease by approximately RMB 1.216 billion[65] - A 1% appreciation or depreciation of the RMB against the USD exchange rate would result in an increase or decrease of RMB 133 million in the Group's net profit and shareholders' equity, respectively[66] - The domestic market still exhibits a supply-demand imbalance with increased volume and decreased prices, while competition in certain international regions is intense[67] - The development of the high-speed rail network poses a risk of continuous passenger diversion for short-to-medium haul transportation[68] External Environmental Risks The group faces external risks from market volatility, aviation fuel price fluctuations, and exchange rate changes, significantly impacting costs and profits Market Volatility While the domestic aviation market is expected to grow steadily, international political and economic uncertainties, especially in North America, pose risks, prompting increased international capacity and "Belt and Road" market development - The domestic aviation market is expected to grow steadily, but international market development faces uncertainties[64] - The Group will increase international capacity investment, optimize its structure, and actively explore and cultivate emerging markets related to the "Belt and Road" initiative[64] Aviation Fuel Price Fluctuations Aviation fuel price volatility significantly impacts the group's performance, with a 5% change in average fuel price affecting fuel costs by approximately RMB 1.216 billion, partially mitigated by fuel surcharges - Aviation fuel is one of the Group's main operating costs, and its performance is significantly affected by fluctuations in aviation fuel prices[65] - The imposition of fuel surcharges has, to some extent, alleviated the pressure from aviation fuel costs[65] Exchange Rate Fluctuations As some assets, liabilities, and international revenues/expenses are settled in foreign currencies, a 1% change in the RMB to USD exchange rate would impact net profit and shareholders' equity by RMB 133 million - Certain assets, liabilities, and international revenues and expenses of the Group are settled in currencies other than RMB[66] - A 1% change in the RMB to USD exchange rate would result in an increase or decrease of RMB 133 million in the Group's net profit and shareholders' equity, respectively[66] Competition Risk The group faces intense competition from peers and high-speed rail, with domestic market supply-demand imbalance and fierce international competition Peer Competition Market players have not significantly decreased, leading to a supply-demand imbalance in the domestic market and intense competition in international markets. The company will adhere to its hub network strategy to build differentiated competitive advantages - The Company will continue to face strong peer competition pressure, with the domestic market experiencing increased volume and decreased prices, and intense competition in certain international markets[67] - The Company will adhere to its hub network strategy, building dual hubs in Beijing and Chengdu, developing "four-pole clusters" and the Xinjiang strategic market to achieve differentiated development[67] Substitution Competition With the development of the high-speed rail network, there is a risk of continued passenger diversion for short-to-medium haul transportation. Civil aviation should leverage its comparative advantages, increase investment in long-haul domestic and international routes, and promote air-rail intermodal transport - The development of high-speed rail poses a risk of continuous passenger diversion for short-to-medium haul transportation[68] - Civil aviation should leverage its comparative advantages, increase capacity investment in long-haul domestic and international routes, provide public travel services to remote areas, and promote air-rail intermodal transport[68] Other Information This section covers securities transactions, interim dividends, post-balance sheet events, and corporate governance Purchase, Sale or Redemption of Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[69] Interim Dividend The company will not declare an interim dividend for the six months ended June 30, 2025 - The Company will not declare an interim dividend for the six months ended June 30, 2025[70] Events After the Reporting Period Mr. Xuan Haoxian resigned as Joint Company Secretary on July 31, 2025, with Mr. Xiao Feng continuing as sole Company Secretary and Mr. Liang Yifeng appointed as process agent in Hong Kong - Mr. Xuan Haoxian resigned as Joint Company Secretary on July 31, 2025, and Mr. Xiao Feng continues to serve as the sole Company Secretary[71] - Mr. Liang Yifeng succeeded Mr. Xuan as the Company's agent for receiving legal process documents and notices in Hong Kong under Rule 19A.13(2) of the Listing Rules[71] Corporate Governance The company complied with the Corporate Governance Code, adopted a code of conduct for directors and supervisors, and its Audit and Risk Management Committee reviewed the interim results - The Company consistently complied with the code provisions of Part 2 of Appendix C1 of the Listing Rules' Corporate Governance Code during the reporting period[72] - All Directors and Supervisors complied with the standards set out in the Model Code and the Company's code of conduct during the reporting period[73] - The Company's Audit and Risk Management Committee reviewed the Company's interim results and financial statements for the six months ended June 30, 2025[75] Compliance with the Corporate Governance Code The company consistently complied with the code provisions of Appendix C1 of the Listing Rules' Corporate Governance Code during the reporting period - The Company consistently complied with the code provisions of Part 2 of Appendix C1 of the Listing Rules' Corporate Governance Code during the reporting period[72] Code of Conduct for Directors and Supervisors The company adopted a code of conduct no less exacting than the Model Code, and all directors and supervisors complied with it during the reporting period - The Company has adopted a code of conduct no less exacting than the Model Code[73] - All Directors and Supervisors consistently complied with the standards set out in the Model Code and the Company's code of conduct during the reporting period[73] Disclosure Requirements under the Listing Rules The company confirms no material changes in existing information related to Listing Rule Appendix D2 paragraph 46(3) compared to the 2024 annual report, except as disclosed - The Company confirms that, save as disclosed in this announcement, there have been no material changes in the existing information of the Company relating to the matters set out in paragraph 46(3) of Appendix D2 to the Listing Rules compared to the relevant disclosures in the Company's 2024 annual report[74] Review by the Audit and Risk Management Committee The Audit and Risk Management Committee reviewed the interim results, unaudited condensed consolidated financial statements, and accounting policies for the six months ended June 30, 2025 - The Company's Audit and Risk Management Committee has reviewed the Company's interim results for the six months ended June 30, 2025[75] Glossary of Technical Terms This section defines key technical terms used in the report, including metrics for transportation capacity, traffic volume, and operational efficiency - Defined transportation capacity metrics such as "Available Tonne Kilometers," "Available Seat Kilometers," and "Available Freight Tonne Kilometers"[76] - Defined traffic volume metrics such as "Revenue Passenger Kilometers," "Revenue Freight Tonne Kilometers," and "Revenue Tonne Kilometers"[76][77] - Defined yield units such as "Passenger Kilometers Yield / Yield per Passenger Kilometer" and "Freight Tonne Kilometers Yield / Yield per Freight Tonne Kilometer"[78] Definitions This section provides definitions for specific companies, organizations, accounting standards, and other proper nouns used in the report for clarity - Defined companies and entities such as "Airbus," "Inner Mongolia Airlines," "Air Macau," "Ameco," and "Articles of Association"[79] - Defined operational efficiency metrics such as "Passenger Load Factor / Passenger Utilization Rate," "Cargo and Mail Load Factor / Cargo and Mail Utilization Rate," "Overall Load Factor," and "Block Hours"[80] - Defined proper nouns such as "A Shares," "Beijing Airlines," "Cathay Pacific," "CNAHC," "COMAC," "Air China," "CSRC," "Dalian Airlines," "HKEX," "H Shares," "Board," "Boeing," "CAS," "Directors," "the Group," "Hong Kong," "IFRS," "Kunming Airlines," "Listing Rules," "Model Code," "Reporting Period," "RMB," "SFO," "Shandong Airlines," "Shandong Airlines Group," "Shenzhen Airlines," "Supervisors," "Supervisory Committee," and "USD"[81][82][83][84]