中国东方航空股份(00670) - 2025 - 中期业绩

Report Overview and Company Information Announcement Statement This announcement presents China Eastern Airlines' H1 2025 interim results, prepared under IAS 34, cautioning against over-reliance on these results for future performance prediction - This announcement presents the interim results of China Eastern Airlines Corporation Limited and its subsidiaries for the six months ended June 30, 2025[4] - The interim financial results were approved by the Board and the Audit and Risk Management Committee on August 29, 2025, and prepared in accordance with International Accounting Standard 34[4] - The report explicitly states that interim financial results do not necessarily indicate full-year and future performance, and investors should not over-rely on them[4] Company Information China Eastern Airlines Corporation Limited, established in 1995, primarily operates civil aviation businesses including passenger, cargo, and mail transport, controlled by China Eastern Airholding Co. Ltd - China Eastern Airlines Corporation Limited was established in China on April 14, 1995, primarily operating civil aviation businesses[14] - The Company's controlling entity is China Eastern Airholding Co. Ltd., a state-owned enterprise[14] - The Company's A-shares and H-shares are listed on the Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited, respectively[15] Basis of Preparation and Accounting Policies These condensed consolidated financial statements are prepared under IAS 34 and should be read with the 2024 annual consolidated financial statements, with the Board maintaining a going concern basis despite a net loss of RMB 1.59 billion and current liabilities exceeding current assets by RMB 95.13 billion - These condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the 2024 annual consolidated financial statements[18] - For the six months ended June 30, 2025, the Group incurred a net loss of RMB 1.59 billion, with current liabilities exceeding current assets by approximately RMB 95.13 billion[18] - The Board continues to prepare the financial statements on a going concern basis, supported by sufficient bank credit facilities, a sound credit profile, and projected net cash inflows from operating activities[18][19] - Revisions to International Financial Reporting Standards were first applied during this interim period but did not have a significant impact on the financial position and performance[21] Condensed Consolidated Financial Statements Condensed Consolidated Income Statement The Group's revenue grew to RMB 66.822 billion in H1 2025, with operating profit significantly increasing to RMB 484 million, yet a pre-tax loss of RMB 1.531 billion and a net loss attributable to equity holders of RMB 1.431 billion resulted in a basic loss per share of RMB 0.06, a substantial reduction in loss from the prior year Condensed Consolidated Income Statement Key Data (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 66,822 | 64,199 | 4.09% | | Other operating income and gains | 3,391 | 3,200 | 5.97% | | Total operating expenses | (69,729) | (67,359) | 3.52% | | Operating profit | 484 | 40 | 1110.00% | | Loss before tax | (1,531) | (2,841) | -46.11% | | Loss for the period | (1,592) | (3,099) | -48.62% | | Net loss attributable to equity holders of the Company | (1,431) | (2,768) | -48.30% | | Basic loss per share (RMB) | (0.06) | (0.12) | -50.00% | Condensed Consolidated Statement of Comprehensive Income The Group's total comprehensive loss for H1 2025 significantly narrowed to RMB 1.611 billion from RMB 3.295 billion in the prior year, with other comprehensive income items, including cash flow hedges and equity investment fair value changes, resulting in a net loss of RMB 19 million after tax Condensed Consolidated Statement of Comprehensive Income Key Data (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Loss for the period | (1,592) | (3,099) | -48.62% | | Other comprehensive income, net of tax | (19) | (196) | -90.31% | | Total comprehensive income for the period | (1,611) | (3,295) | -51.11% | | Total comprehensive income attributable to equity holders of the Company | (1,450) | (2,956) | -50.95% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets were RMB 284.727 billion, a 2.11% increase from year-end 2024, with non-current assets comprising 92.55%, while net assets decreased to RMB 42.018 billion due to current liabilities exceeding current assets by approximately RMB 95.13 billion Condensed Consolidated Statement of Financial Position Key Data (As of June 30) | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Non-current assets | 263,513 | 259,739 | 1.45% | | Current assets | 21,214 | 19,103 | 11.05% | | Current liabilities | 116,348 | 114,003 | 2.06% | | Net current liabilities | (95,134) | (94,900) | 0.25% | | Non-current liabilities | 126,361 | 121,188 | 4.27% | | Net assets | 42,018 | 43,651 | -3.74% | | Total equity | 42,018 | 43,651 | -3.74% | - As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately RMB 95.13 billion[7] Condensed Consolidated Statement of Changes in Equity As of June 30, 2025, equity attributable to the Company's equity holders decreased to RMB 40.802 billion from RMB 42.774 billion at year-end 2024, primarily due to a period loss of RMB 1.431 billion, share repurchases of RMB 522 million, and perpetual bond interest of RMB 348 million, partially offset by a RMB 500 million capital injection from non-controlling interests in subsidiaries Condensed Consolidated Statement of Changes in Equity Key Data (For the six months ended June 30) | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Equity attributable to equity holders of the Company | 40,802 | 42,774 | -4.61% | | Non-controlling interests | 1,216 | 877 | 38.65% | | Total equity | 42,018 | 43,651 | -3.74% | - In H1 2025, the net loss attributable to equity holders of the Company was RMB 1.431 billion[9] - Share repurchases during the period resulted in a RMB 522 million reduction in equity[9] - Non-controlling interests in subsidiaries contributed RMB 500 million in capital[9] Condensed Consolidated Statement of Cash Flows The Group's net cash from operating activities increased by 17.06% to RMB 12.547 billion in H1 2025, while net cash used in investing activities significantly decreased to RMB 3.826 billion, and net cash used in financing activities was RMB 9.215 billion, resulting in a period-end cash and cash equivalents balance of RMB 3.599 billion, a decrease of RMB 494 million from the beginning of the period Condensed Consolidated Statement of Cash Flows Key Data (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 12,547 | 10,718 | 17.06% | | Net cash used in investing activities | (3,826) | (7,329) | -47.80% | | Net cash used in financing activities | (9,215) | (11,522) | -20.02% | | Net decrease in cash and cash equivalents | (494) | (8,133) | -93.93% | | Cash and cash equivalents at end of period | 3,599 | 3,713 | -3.07% | - Cash generated from operating activities primarily amounted to RMB 12.634 billion, after deducting income tax paid of RMB 87 million[11] - The decrease in net cash used in investing activities was mainly due to RMB 3.976 billion received from the transfer of purchase rights[11] Notes to the Financial Statements Segment Information The Group primarily operates through its aviation business segment, which contributes the vast majority of revenue but incurs significant pre-tax losses, with most revenue generated domestically and international route income showing significant growth, while the aviation business experiences seasonal fluctuations with the second half of the year typically being a peak demand period Business Segment Performance and Assets In H1 2025, the aviation business segment generated RMB 66.650 billion in revenue, accounting for the majority of total revenue, but reported a pre-tax loss of RMB 1.767 billion, a reduction from the prior year, while other business segments contributed minor profits, and the aviation business segment held the largest share of total assets at RMB 267.092 billion Segment Performance (For the six months ended June 30) | Metric | Aviation Business Segment (RMB million) | Other Business Segment (RMB million) | Total (RMB million) | | :--- | :--- | :--- | :--- | | 2025 Segment Revenue | 66,650 | 172 | 66,822 | | 2024 Segment Revenue | 64,044 | 155 | 64,199 | | 2025 Reported Segment Loss/Profit before Tax | (1,767) | 39 | (1,531) | | 2024 Reported Segment Loss/Profit before Tax | (3,155) | 168 | (2,841) | Segment Assets (As of June 30) | Metric | Aviation Business Segment (RMB million) | Other Business Segment (RMB million) | Total (RMB million) | | :--- | :--- | :--- | :--- | | June 30, 2025 Reported Segment Assets | 267,092 | 4,237 | 282,485 | | December 31, 2024 Reported Segment Assets | 261,705 | 4,275 | 276,600 | - Unallocated assets primarily include investments in associates and joint ventures, and derivative financial instruments[32] Geographical Revenue Distribution and Seasonality In H1 2025, the Group's revenue primarily originated from mainland China, with international route revenue increasing by 20.34% year-on-year, indicating a recovery in the international market, while the aviation business is seasonal, with the second half of the year typically being the peak demand period Geographical Revenue Distribution (For the six months ended June 30) | Region | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Mainland China | 44,036 | 44,961 | -2.06% | | Hong Kong, Macau and Taiwan | 1,839 | 1,831 | 0.44% | | International | 20,947 | 17,407 | 20.34% | | Total | 66,822 | 64,199 | 4.09% | - The Group's aviation business experiences seasonal fluctuations, with holidays in the second half of each year being peak demand periods, and H1 revenue and performance typically lower than H2[34] Revenue and Other Operating Income In H1 2025, the Group's total revenue was RMB 66.822 billion, predominantly from customer contracts, with passenger revenue as the main source and significant growth in international passenger revenue, while other operating income and gains totaled RMB 3.391 billion, primarily from code-share revenue Revenue Analysis (For the six months ended June 30) | Revenue Source | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Revenue from contracts with customers | 66,713 | 64,077 | 4.11% | | Revenue from other sources | 109 | 122 | -10.66% | | Total Revenue | 66,822 | 64,199 | 4.09% | Revenue from Contracts with Customers Breakdown (For the six months ended June 30) | Service Type | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Passenger revenue | 61,813 | 59,338 | 4.17% | | Cargo and mail revenue | 2,577 | 2,371 | 8.70% | | International and regional revenue | 20,947 | 17,407 | 20.34% | Other Operating Income and Gains (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Code-share revenue | 2,335 | 2,320 | 0.65% | | Route subsidies | 96 | 323 | -70.28% | | Other subsidy income | 692 | 307 | 125.41% | | Total | 3,391 | 3,200 | 5.97% | Finance Costs and Taxation In H1 2025, the Group's finance costs decreased by 28.24% year-on-year to RMB 2.216 billion, primarily due to reduced interest on lease liabilities and net exchange losses, while income tax expense significantly decreased by 76.4% to RMB 61 million, mainly due to a smaller pre-tax loss and preferential tax rates for some subsidiaries Finance Costs (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Interest on lease liabilities | 1,115 | 1,540 | -27.60% | | Interest on bank borrowings | 1,059 | 1,084 | -2.29% | | Net exchange losses | 9 | 378 | -97.62% | | Total finance costs | 2,216 | 3,088 | -28.24% | Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Current income tax | 50 | 90 | -44.44% | | Deferred income tax | 11 | 168 | -93.45% | | Total income tax expense | 61 | 258 | -76.40% | - Some subsidiaries, such as Eastern Airlines Yunnan, Eastern Airlines E-commerce, and Eastern Airlines Technology Application Research Center, enjoy a 15% preferential income tax rate[42][43] Loss Per Share and Dividends In H1 2025, the basic loss per share attributable to the Company's equity holders significantly narrowed to RMB 0.06 from RMB 0.12 in the prior year, and the Board did not recommend an interim dividend Loss Per Share (For the six months ended June 30) | Metric | 2025 (RMB) | 2024 (RMB) | Change | | :--- | :--- | :--- | :--- | | Basic loss per share | (0.06) | (0.12) | -50.00% | - Basic loss per share is calculated based on the consolidated loss attributable to equity holders of the Company of RMB 1.431 billion and the weighted average number of ordinary shares outstanding of 22.182 billion shares[45] - The Board recommended no interim dividend for the six months ended June 30, 2025[44] Notes to Key Items in the Statement of Financial Position This section details key items in the Group's statement of financial position, including property, plant and equipment, right-of-use assets, intangible assets, trade and other receivables/payables, borrowings, share capital, and capital commitments, with varying changes reflecting the Group's activities in fleet expansion, asset transfers, debt management, and capital expenditures Property, Plant and Equipment As of June 30, 2025, the carrying amount of property, plant and equipment was RMB 105.572 billion, a 2.17% increase from the beginning of the period, primarily due to additions and transfers from right-of-use assets, partially offset by depreciation and disposals Carrying Amount of Property, Plant and Equipment (As of June 30) | Item | June 30, 2025 (RMB million) | January 1, 2025 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Aircraft, engines and flight equipment | 87,443 | 85,683 | 2.05% | | Others | 18,129 | 17,647 | 2.73% | | Total | 105,572 | 103,330 | 2.17% | - Additions during the period amounted to RMB 4.452 billion, with RMB 4.044 billion transferred from right-of-use assets[47] - Depreciation for the period amounted to RMB 6.072 billion[47] Right-of-Use Assets As of June 30, 2025, the carrying amount of right-of-use assets was RMB 115.781 billion, a 3.09% increase from the beginning of the period, mainly due to new leases increasing right-of-use assets by RMB 14.064 billion, partially offset by transfers to property, plant and equipment and depreciation Carrying Amount of Right-of-Use Assets (As of June 30) | Item | June 30, 2025 (RMB million) | January 1, 2025 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Aircraft, engines and flight equipment | 109,891 | 108,298 | 1.47% | | Others | 5,890 | 4,135 | 42.46% | | Total | 115,781 | 112,433 | 3.09% | - Right-of-use assets increased by RMB 14.064 billion during the period[48] - Depreciation for the period amounted to RMB 6.764 billion[48] Intangible Assets As of June 30, 2025, the carrying amount of intangible assets was RMB 11.613 billion, a slight increase from the beginning of the period, with goodwill accounting for the vast majority, primarily arising from the acquisition of Shanghai Airlines to enhance competitiveness and synergy Carrying Amount of Intangible Assets (As of June 30) | Item | June 30, 2025 (RMB million) | January 1, 2025 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Goodwill | 11,272 | 11,272 | 0.00% | | Others | 341 | 331 | 3.02% | | Total | 11,613 | 11,603 | 0.09% | - Goodwill primarily arose from the acquisition of Shanghai Airlines, aiming to enhance air transport competitiveness, achieve synergies, and promote the development of Shanghai as an international shipping center[49] Trade and Other Receivables and Payables As of June 30, 2025, trade and other receivables totaled RMB 3.051 billion, a 56.54% increase from year-end 2024, primarily concentrated within 90 days, while trade and other payables amounted to RMB 15.610 billion, a 7.54% increase from year-end 2024, with the largest proportion due within 91-180 days Trade and Other Receivables (As of June 30) | Item | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Trade and other receivables | 3,154 | 2,047 | 54.08% | | Less: Impairment allowance | (103) | (98) | 5.10% | | Net amount | 3,051 | 1,949 | 56.54% | Trade and Other Payables (As of June 30) | Ageing | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Within 90 days | 5,875 | 3,388 | 73.42% | | 91 to 180 days | 9,480 | 10,838 | -12.53% | | Total | 15,610 | 14,515 | 7.54% | Borrowings and Share Capital As of June 30, 2025, the Group's total borrowings amounted to RMB 105.808 billion, a 2.55% increase from year-end 2024, with RMB 55.456 billion as non-current and RMB 50.352 billion as current, after repaying RMB 3.5 billion in bonds during the period, while total share capital remained at RMB 22.291 billion, comprising A-shares and H-shares with equal rights Total Borrowings (As of June 30) | Item | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Non-current portion | 55,456 | 53,598 | 3.47% | | Current portion | 50,352 | 49,576 | 1.57% | | Total | 105,808 | 103,174 | 2.55% | - The Group's bank borrowings are secured by related aircraft with a carrying amount of RMB 21.253 billion[52] - During the period, the Group repaid three-year medium-term notes totaling RMB 3.5 billion[52] Share Capital Structure (As of June 30) | Share Type | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | A-shares | 17,114 | 17,114 | | H-shares | 5,177 | 5,177 | | Total | 22,291 | 22,291 | Commitments As of June 30, 2025, the Group's total capital expenditure commitments were RMB 74.550 billion, a 14.20% decrease from year-end 2024, with commitments for aircraft, engines, and flight equipment accounting for the vast majority, and significant expenditures expected within the next three years Capital Expenditure Commitments (As of June 30) | Item | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Aircraft, engines and flight equipment | 71,878 | 81,464 | -11.76% | | Other property, plant and equipment | 2,630 | 5,252 | -49.92% | | Investments | 42 | 174 | -75.86% | | Total | 74,550 | 86,890 | -14.20% | Expected Expenditure for Aircraft, Engines and Flight Equipment Commitments (As of June 30) | Period | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Within 1 year | 22,567 | 27,736 | | Second year | 20,341 | 21,518 | | Third year | 14,159 | 15,191 | | Over 3 years | 14,811 | 17,019 | | Total | 71,878 | 81,464 | Related Party Transactions The Group engaged in extensive transactions with related parties, including China Eastern Airholding Co. Ltd. and its subsidiaries, and other state-owned enterprises, covering procurement of products and services, provision of services, leasing, and financial services, with pricing primarily based on market rates or mutual agreement, and significant balances of receivables and payables with related parties, notably Eastern Airlines Logistics and Eastern Airlines Leasing, as of June 30, 2025 List of Related Parties The Group's related parties include associates, joint ventures, entities under common control, and other companies where the Company's key management personnel hold positions, such as Eastern Airlines Finance, Shanghai Pratt & Whitney, Eastern Airlines Logistics, TravelSky, and Air France-KLM - Related parties include Eastern Airlines Group Finance Co., Ltd., Shanghai Pratt & Whitney Aircraft Engine Maintenance Co., Ltd., Eastern Airlines Logistics Co., Ltd., TravelSky Technology Limited, and others[60] - Related party relationships encompass associates, joint ventures, entities under common control, and companies where key management personnel hold positions[60] Details of Related Party Transactions In H1 2025, the Group conducted various transactions with related parties, with major expenditures in procuring products and services including aircraft and engine maintenance, and catering and cabin supplies, while exclusive operating transport revenue related to passenger aircraft cargo business was a primary source of service income, and significant leasing activities involved settling aircraft and engine lease liabilities and increasing right-of-use assets from new leases, all transacted at mutually agreed prices Major Related Party Transactions (For the six months ended June 30) | Nature of Transaction | Related Party | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | :--- | | Procurement of catering and cabin supplies | Eastern Airlines Food | 1,586 | 1,545 | | Aircraft and engine maintenance and repair expenses | Shanghai Pratt & Whitney | 2,074 | 1,613 | | Acceptance of civil aviation information network services | TravelSky | 695 | 361 | | Exclusive operating transport revenue related to passenger aircraft cargo business | Eastern Airlines Logistics | 2,577 | 2,371 | | Settlement of aircraft and engine lease liabilities | Eastern Airlines Leasing | 3,233 | 6,505 | | Increase in right-of-use assets due to new leases (aircraft and engines) | Eastern Airlines Leasing | 6,678 | 462 | | Interest expense on perpetual bonds | China Eastern Airholding Co. Ltd. | 348 | 294 | - The prices for the Group's procurement and provision of services to related parties, as well as leasing service prices, are determined through mutual negotiation[70][71] Related Party Balances As of June 30, 2025, the Group's total receivables from related parties amounted to RMB 1.101 billion, with Eastern Airlines Logistics being the largest contributor, while total payables to related parties were RMB 3.429 billion, primarily to TravelSky and Shanghai Pratt & Whitney, and Eastern Airlines Leasing accounted for the highest proportion of lease liabilities, with significant balances also existing for short-term deposits, loans, and borrowings with related parties Receivables from Related Parties (As of June 30) | Related Party | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Eastern Airlines Logistics | 1,047 | 682 | 53.52% | | Total | 1,101 | 748 | 47.19% | Payables to Related Parties (As of June 30) | Related Party | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | TravelSky | 1,598 | 985 | 62.23% | | Shanghai Pratt & Whitney | 932 | 642 | 45.17% | | Total | 3,429 | 2,423 | 41.52% | Short-term Deposits, Loans and Borrowings with Related Parties (As of June 30) | Item | Related Party | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | :--- | | Short-term deposits | Eastern Airlines Finance | 2,032 | 2,774 | | Short-term borrowings | China Eastern Airholding Co. Ltd. | 1,701 | 1,701 | | Long-term borrowings | China Eastern Airholding Co. Ltd. | 6,904 | 1,001 | - As of June 30, 2025, the Group's bonds guaranteed by China Eastern Airholding Co. Ltd. amounted to RMB 1.535 billion[86] Fair Value Estimation of Financial Instruments The Group measures the fair value of financial instruments using a three-level hierarchy, with the total fair value of equity investments designated at fair value through other comprehensive income, derivative financial instruments, and financial assets at fair value through profit or loss amounting to RMB 1.734 billion as of June 30, 2025, where the fair value of unlisted equity investments is estimated using market-based valuation techniques, and for other financial instruments not measured at fair value, their fair values approximate their carrying amounts, except for long-term borrowings Fair Value Measurement of Financial Instruments (As of June 30) | Item | Level 1 (RMB million) | Level 2 (RMB million) | Level 3 (RMB million) | Total (RMB million) | | :--- | :--- | :--- | :--- | :--- | | Equity investments designated at fair value through other comprehensive income | 203 | – | 1,368 | 1,571 | | Derivative financial instruments | – | 27 | – | 27 | | Financial assets at fair value through profit or loss | 136 | – | – | 136 | | Total | 339 | 27 | 1,368 | 1,734 | - The fair value of unlisted equity investments is estimated using market-based valuation techniques, considering comparable companies, price multiples, and liquidity discounts[94][96] Long-term Borrowings Fair Value vs. Carrying Amount (As of June 30) | Item | Carrying Amount (RMB million) | Fair Value (RMB million) | | :--- | :--- | :--- | | Long-term borrowings | 55,456 | 55,680 | Reconciliation of Cash Generated from Operations In H1 2025, the Group's cash generated from operations was RMB 12.634 billion, derived by adjusting the pre-tax loss of RMB 1.531 billion for non-cash items like depreciation, amortization, and interest expense, and changes in working capital, resulting in net cash generated from operating activities of RMB 12.547 billion Reconciliation of Cash Generated from Operations (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Loss before tax | (1,531) | (2,841) | | Depreciation of property, plant and equipment | 6,072 | 5,272 | | Depreciation of right-of-use assets | 6,764 | 7,456 | | Interest expense | 2,207 | 2,710 | | Increase in operating receivables | (1,807) | (1,130) | | Increase/(decrease) in operating payables | 995 | (892) | | Cash generated from operations | 12,634 | 10,835 | | Net cash flow from operating activities | 12,547 | 10,718 | - Cash generated from operations is primarily influenced by non-cash items such as depreciation, amortization, interest expense, and changes in working capital[103] Operating Data Analysis Passenger Traffic Data In H1 2025, the Group's passenger business experienced overall growth, with Available Seat Kilometers (ASK) and Revenue Passenger Kilometers (RPK) increasing by 7.48% and 12.24% year-on-year, respectively, and international routes showing significant growth, leading to an improved load factor of 84.81%, however, passenger yield per RPK decreased by 7.22% overall, with domestic routes experiencing the largest decline Passenger Traffic Data (For the six months ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Available Seat Kilometers (ASK) (million) | 155,022.29 | 144,237.41 | 7.48% | | －Domestic routes | 101,528.31 | 100,449.48 | 1.07% | | －International routes | 50,303.48 | 40,444.61 | 24.38% | | Revenue Passenger Kilometers (RPK) (million) | 131,477.90 | 117,143.47 | 12.24% | | －Domestic routes | 87,717.88 | 82,670.69 | 6.11% | | －International routes | 41,145.20 | 31,959.54 | 28.74% | | Passengers carried (thousand) | 73,169.63 | 67,729.34 | 8.03% | | Passenger load factor (%) | 84.81 | 81.22 | 3.59pts | | －Domestic routes | 86.40 | 82.30 | 4.10pts | | －International routes | 81.79 | 79.02 | 2.77pts | | Passenger yield per RPK (RMB) | 0.488 | 0.526 | -7.22% | | －Domestic routes | 0.488 | 0.530 | -7.92% | Cargo Traffic Data In H1 2025, the Group's cargo business saw Available Freight Ton Kilometers (AFTK) and Revenue Freight Ton Kilometers (RFTK) increase by 9.30% and 8.24% year-on-year, respectively, with significant growth in international cargo volume, though the cargo load factor slightly decreased, while cargo yield per FTK overall increased by 0.45%, with domestic routes showing faster growth Cargo Traffic Data (For the six months ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Available Freight Ton Kilometers (AFTK) (million) | 5,223.40 | 4,778.83 | 9.30% | | －Domestic routes | 1,953.93 | 1,952.84 | 0.06% | | －International routes | 3,185.33 | 2,726.27 | 16.84% | | Revenue Freight Ton Kilometers (RFTK) (million) | 1,932.25 | 1,785.17 | 8.24% | | －Domestic routes | 466.42 | 469.56 | -0.67% | | －International routes | 1,452.17 | 1,301.93 | 11.54% | | Cargo and mail carried (million kg) | 530.65 | 510.64 | 3.92% | | Cargo and mail load factor (%) | 36.99 | 37.36 | -0.37pts | | Cargo yield per FTK (RMB) | 1.334 | 1.328 | 0.45% | | －Domestic routes | 0.682 | 0.650 | 4.92% | Overall Traffic Data In H1 2025, the Group's Available Ton Kilometers (ATK) and Revenue Ton Kilometers (RTK) increased by 7.97% and 11.89% year-on-year, respectively, with international routes leading the growth, and the overall load factor improved to 70.43%, with domestic routes performing strongly, however, the yield per RTK decreased by 6.86% overall, with domestic routes experiencing the largest decline Overall Traffic Data (For the six months ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Available Ton Kilometers (ATK) (million) | 19,175.40 | 17,760.19 | 7.97% | | －Domestic routes | 11,091.48 | 10,993.30 | 0.89% | | －International routes | 7,712.65 | 6,366.28 | 21.15% | | Revenue Ton Kilometers (RTK) (million) | 13,505.80 | 12,071.12 | 11.89% | | －Domestic routes | 8,184.71 | 7,724.18 | 5.96% | | －International routes | 5,078.22 | 4,113.20 | 23.46% | | Overall load factor (%) | 70.43 | 67.97 | 2.46pts | | －Domestic routes | 73.79 | 70.26 | 3.53pts | | Revenue per Ton Kilometer (RMB) | 4.940 | 5.304 | -6.86% | | －Domestic routes | 5.270 | 5.713 | -7.75% | Fleet Management and Planning Fleet Structure As of June 30, 2025, the Company operated 816 aircraft, with a net increase of 12 during H1, and the fleet structure continues to optimize, with the number of domestically produced C919 aircraft increasing to 11 and an average fleet age of 9.2 years, demonstrating the Company's commitment to green development and scaled operation of domestic large aircraft - As of June 30, 2025, the Company operated a total of 816 aircraft[109] - In H1 2025, the Company introduced 24 aircraft and retired 12 aircraft, resulting in a net increase of 12 aircraft[108] - As the global launch customer for the C919 aircraft, the Company operated a total of 11 C919 aircraft as of June 30, 2025[108] Fleet Structure (As of June 30, 2025) | Aircraft Type | Subtotal (aircraft) | Owned (aircraft) | Finance Lease (aircraft) | Operating Lease (aircraft) | Average Age (years) | | :--- | :--- | :--- | :--- | :--- | :--- | | Wide-body passenger aircraft | 109 | 58 | 46 | 5 | 9.0 | | Narrow-body passenger aircraft | 680 | 298 | 184 | 198 | 9.6 | | Regional passenger aircraft | 27 | 15 | 12 | 0 | 2.4 | | Total passenger aircraft | 816 | 371 | 242 | 203 | 9.2 | Fleet Planning The Group plans to continuously optimize its fleet structure from H2 2025 to 2027, focusing on introducing domestically produced C919 and C909 aircraft while gradually phasing out some A320 and B737 series aircraft, with a significant net increase in passenger aircraft expected over the next three years to support business development and green transformation Aircraft Introduction and Retirement Plan from H2 2025 to 2027 (Units: aircraft) | Aircraft Type | H2 2025 Introduction | H2 2025 Retirement | 2026 Introduction | 2026 Retirement | 2027 Introduction | 2027 Retirement | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | C919 | 9 | – | 10 | – | 10 | – | | C909 | 8 | – | – | – | – | – | | Total COMAC passenger aircraft | 17 | – | 10 | – | 10 | – | | Total Airbus passenger aircraft | 11 | 9 | 24 | 17 | 18 | 14 | | Total Boeing passenger aircraft | 6 | 3 | 2 | 7 | 13 | 12 | | Total passenger aircraft | 34 | 12 | 36 | 24 | 41 | 26 | - The Group will optimize and adjust its aircraft introduction and retirement plans as external environment and market conditions change[151] Operating Review and Strategic Outlook Operating Review In H1 2025, despite a complex external environment, the Company's total transport turnover and passenger volume increased by 11.89% and 8.03% respectively, operating revenue grew by 4.09%, and net loss attributable to shareholders significantly narrowed by 48.30%, with notable progress in safety, market development, cost control, brand service, and reform and innovation, particularly in international route expansion and domestic large aircraft operations - In H1 2025, the Company completed a total transport turnover of 13.506 billion ton-kilometers and carried 73.16963 million passengers, representing year-on-year increases of 11.89% and 8.03%, respectively[112] - Operating revenue reached RMB 66.822 billion, a year-on-year increase of 4.09%, and the net loss attributable to shareholders was RMB 1.431 billion, a significant reduction of RMB 1.337 billion year-on-year[112] Safety Operations The Company maintained overall stable safety operations in H1, with 1.3508 million safe flight hours and 0.5190 million take-offs and landings, increasing by 5.28% and 2.24% year-on-year, respectively, by continuously reinforcing safety production responsibilities, strengthening the safety operation system, and enhancing professional teams to ensure "absolute safety" - In H1 2025, the Company achieved 1.3508 million safe flight hours and 0.5190 million take-offs and landings, representing year-on-year increases of 5.28% and 2.24%, respectively[113] - The Company continuously improved its all-staff safety production responsibility system, refined safety responsibility lists, and strengthened its safety management, production operation, flight training, and maintenance systems[113] - Safety education day activities were deeply carried out, skill competitions were held, and psychological health work for pilots was strengthened to build a high-quality aircrew team[114] Operating Efficiency The Company's operating efficiency continued to improve in H1, focusing on the Shanghai hub, increasing market share to 43.1%, and international transfer passengers by 25.3%, actively expanding its international network with 14 new international and regional routes, innovating "aviation+" marketing models to boost online sales revenue by 30% and new retail revenue by 24.77%, enhancing belly cargo revenue through passenger-cargo synergy, and meticulously controlling landing fees and jet fuel costs via the cost management committee - As of the end of June 2025, the market share in Shanghai was 43.1%, a year-on-year increase of 1.2 percentage points; international transfer passengers reached 4.955 million, a year-on-year increase of 25.3%[115] - 14 new international and regional routes were opened, making it the domestic airline with the most international destinations[115] - In H1 2025, online sales revenue reached RMB 6.1 billion, a year-on-year increase of 30%; new retail revenue exceeded RMB 2.258 billion, a year-on-year increase of 24.77%[116] - Passenger aircraft belly cargo revenue was RMB 2.577 billion, a year-on-year increase of 8.69%[117] - Through meticulous control, passenger bridge fees and bridge-mounted equipment costs saved approximately RMB 11 million compared to the same period last year[117] Brand Service The Company fully implemented the "Four Refinements" service concept, ranking in the "Annual Central Enterprise Brand Building Benchmarking TOP30 List" for the fifth consecutive year, successfully supported the Harbin Asian Winter Games and launched the "Asian Winter Games" themed livery aircraft, and as the global launch operator of the C919 aircraft, its fleet expanded to 11 aircraft with over 30,000 safe flight hours, further enhancing brand value through improved service quality, innovative specialized services, and social responsibility fulfillment - The Company ranked in the "Annual Central Enterprise Brand Building Benchmarking TOP30 List" for the fifth consecutive year and was again recognized as a TOP10 brand in "Brand Finance's Most Valuable Airline Brands in the World"[118] - Successfully completed transportation service support for the Harbin Asian Winter Games and launched the "Asian Winter Games" themed livery aircraft[118] - As the global launch operator of the C919 aircraft, its fleet expanded to 11 aircraft, operating 14 routes, with over 30,000 safe flight hours[118] - Opened foreign language customer service hotlines in English, French, German, Russian, Japanese, and Korean, establishing a global service support system[119] - Launched personalized services such as "Star Wing Escort," "Online Meal Selection," "Eastern Exclusive," and "Small Animals in Cabin"[119] Reform, Transformation, and Digitalization The Company deepened reforms in key areas, outlining 43 tasks and 127 reform measures, accelerated digital transformation by establishing an "AI+" special working group, making progress in smart safety, marketing, maintenance, travel, and ground services, and continuously strengthened technological innovation by forming four company-level technology innovation laboratories to empower business development through technology - Defined 43 tasks and 127 reform measures for further comprehensive deepening of reforms, deepening marketing system reform, and promoting integrated marketing management in the Yangtze River Delta regional market[120] - Established a digital transformation working group and an "AI+" special working group to advance digital applications in smart safety, smart marketing, smart maintenance, smart travel, and smart ground services[121] - Formed an aviation transport service industry chain technology innovation alliance, collaborating with 15 enterprises on scientific and technological innovation, and established 4 company-level technology innovation laboratories[121] Outlook for H2 2025 In H2 2025, the Company will continue to target its annual objectives, focusing on solidifying safety foundations, enhancing operational quality, improving corporate governance effectiveness, and accelerating reform and innovation, through measures such as strengthening system construction, opening new routes, refining cost control, upgrading service standards, promoting the C919 service brand, reinforcing compliance management, and deepening digital transformation - In H2, the Company will resolutely strengthen its safety foundation, reinforcing system construction, hazard investigation, and grassroots development[145] - Efforts will be made to improve operational quality, focusing on hub construction, network layout (opening Shanghai-South America routes, exploring emerging markets in the Middle East, Africa, and South America), and deepening cost reduction and efficiency enhancement[146] - Corporate governance effectiveness will be enhanced by strengthening Board construction, compliance management, and risk prevention and control[148] - Reform and innovation will be accelerated, deepening key reform projects and implementing scientific and technological innovation and digital transformation achievements[149] Financial Position and Risk Management Operating Revenue and Expense Analysis In H1 2025, the Group's main business revenue was RMB 66.822 billion, a 4.09% year-on-year increase, with passenger revenue accounting for 96% and international route passenger revenue growing by 21.78%, while cargo revenue increased by 8.69%, and total operating costs rose by 3.52% to RMB 69.729 billion, with jet fuel costs decreasing due to lower oil prices, but landing fees, salaries, and maintenance expenses all increased Operating Revenue (For the six months ended June 30) | Revenue Item | 2025 (RMB billion) | 2024 (RMB billion) | Year-on-year Growth | | :--- | :--- | :--- | :--- | | Main business revenue | 66.822 | 64.199 | 4.09% | | Transport revenue | 64.390 | 61.718 | 4.34% | | Passenger revenue | 61.813 | 59.338 | 4.17% | | －Domestic route passenger revenue | 41.286 | 42.167 | -2.09% | | －International route passenger revenue | 18.750 | 15.397 | 21.78% | | Cargo revenue | 2.577 | 2.371 | 8.69% | Operating Expenses (For the six months ended June 30) | Expense Item | 2025 (RMB billion) | 2024 (RMB billion) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Total operating costs | 69.729 | 67.359 | 3.52% | | Aircraft fuel costs | 21.411 | 23.292 | -8.08% | | Aircraft landing fees | 9.622 | 8.236 | 16.83% | | Salaries, wages and benefits | 14.020 | 12.624 | 11.06% | | Aircraft maintenance expenses | 3.276 | 3.042 | 7.69% | - Aircraft fuel costs decreased primarily due to a 12.42% decline in crude oil prices, offsetting the cost increase from a 4.96% rise in fuel consumption[127] Other Operating Income and Net Loss In H1 2025, the Group's other operating income increased by 5.97% year-on-year to RMB 3.391 billion, primarily driven by growth in code-share revenue, while the net loss attributable to the Company's equity holders significantly narrowed by 48.30% to RMB 1.431 billion from RMB 2.768 billion in the prior year Other Operating Income and Net Loss (For the six months ended June 30) | Metric | 2025 (RMB billion) | 2024 (RMB billion) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Other operating income | 3.391 | 3.200 | 5.97% | | Net loss attributable to equity holders of the Company | (1.431) | (2.768) | -48.30% | | Loss per share (RMB) | (0.06) | (0.12) | -50.00% | - The increase in other operating income was mainly due to growth in passenger traffic, increased capacity deployment, and higher code-share revenue[129] Liquidity and Capital Structure As of June 30, 2025, the Group's total assets were RMB 284.727 billion, with a debt-to-asset ratio of 85.24%, an increase of 0.90 percentage points from year-end 2024, and current liabilities exceeding current assets, resulting in net current liabilities of RMB 95.134 billion, while total interest-bearing debt amounted to RMB 181.439 billion, with RMB-denominated debt accounting for 86.73% and USD-denominated debt for 11.69% Liquidity and Capital Structure (As of June 30) | Metric | June 30, 2025 (RMB billion) | December 31, 2024 (RMB billion) | Change | | :--- | :--- | :--- | :--- | | Total assets | 284.727 | 278.842 | 2.11% | | Debt-to-asset ratio | 85.24% | 84.34% | 0.90pts | | Total current assets | 21.214 | 19.103 | 11.05% | | Total current liabilities | 116.348 | 114.003 | 2.06% | | Net current liabilities | (95.134) | (94.900) | 0.25% | Interest-bearing Debt by Currency (As of June 30) | Currency | June 30, 2025 Amount (RMB million) | Proportion (%) | December 31, 2024 Amount (RMB million) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | RMB | 157,357 | 86.73 | 148,070 | 84.15 | 6.27 | | USD | 21,209 | 11.69 | 25,166 | 14.30 | -15.72 | | Other | 2,873 | 1.58 | 2,733 | 1.55 | 5.12 | | Total | 181,439 | 100.00 | 175,969 | 100.00 | 3.11 | - The Group's interest-bearing debt comprises 49.65% fixed-rate and 50.35% floating-rate debt[137] Interest Rate and Exchange Rate Risks The Group's interest-bearing debt is primarily denominated in USD and RMB, making it sensitive to interest rate fluctuations, with no new interest rate swap contracts entered into in H1 2025 and outstanding notional amounts of approximately USD 18 million at period-end, while foreign currency interest-bearing debt totaled RMB 24.082 billion, with USD accounting for 88.07%, exposing the Group to significant exchange rate fluctuations, and outstanding notional amounts of approximately USD 295 million in forward foreign exchange contracts at period-end for hedging purposes - The Group's interest-bearing debt consists of 49.65% fixed-rate and 50.35% floating-rate debt[137] - In H1 2025, the Group did not enter into new interest rate swap contracts, with outstanding notional amounts of approximately USD 18 million at period-end[137] - As of June 30, 2025, the Group's total foreign currency interest-bearing debt amounted to RMB 24.082 billion, with USD-denominated debt accounting for 88.07%[138] - Outstanding notional amounts of forward foreign exchange contracts at period-end were approximately USD 295 million, used to hedge against USD exchange rate fluctuations[138] Jet Fuel Prices and Asset Mortgages Jet fuel cost is one of the Group's largest operating expenses, with price fluctuations significantly impacting profitability, and no jet fuel hedging transactions were conducted in H1 2025, while as of June 30, 2025, the original value of assets pledged for some of the Group's bank loans was RMB 34.064 billion, with no significant contingent liabilities - Jet fuel cost is one of the Group's largest operating expenses, and its price fluctuations have a significant impact on profitability[139] - In H1 2025, the Group did not engage in jet fuel hedging transactions, and there were no outstanding jet fuel hedging contracts at period-end[139] - As of June 30, 2025, the original value of assets pledged for some of the Group's bank loans was RMB 34.064 billion[140] - As of June 30, 2025, the Group had no significant contingent liabilities[141] Corporate Governance and Significant Matters Corporate Governance The Company continuously improved its modern enterprise system with Chinese characteristics, launched a special action plan for corporate governance, revised supporting systems for the Board and shareholders' meetings, and optimized Board composition, while in market value management, it formulated a "Market Value Management System" and proceeded with share repurchases, acquiring a total of 173.23 million A-shares and H-shares for approximately RMB 542 million as of June 30, 2025, and strengthened risk control in finance, internal control, and compliance - The Company launched a special action plan to improve its corporate governance system, breaking down 5 types of tasks into 22 detailed measures[122] - Systematically revised relevant supporting systems for the Board, shareholders' meetings, Party Committee, and General Manager's Office, improving the corporate governance system with the Articles of Association as its core[122] - Formulated the "Market Value Management System," and as of June 30, 2025, the Company repurchased a total of 173.2319 million A-shares and H-shares, investing approximately RMB 542 million[123] - Continuously strengthened risk control in key areas and major businesses, preventing and resolving financial, internal control, and compliance risks[124] Legal and Regulatory Matters As of June 30, 2025, the Board found no significant legal and regulatory matters impacting the Group and was unaware of any violations of relevant laws and regulations - As of June 30, 2025, the Board found no significant matters impacting the Group and was unaware of any violations of laws and regulations that would have a material impact on the Group[143] Share Structure and Dividends As of June 30, 2025, the Company's total share capital was 22.291 billion shares, with A-shares accounting for 76.78% and H-shares for 23.22%, all being unrestricted tradable shares, and the Board did not recommend an interim dividend for the half-year ended June 30, 2025 Share Structure (As of June 30, 2025) | Share Type | Total Shares | Approximate Equity Proportion (%) | | :--- | :--- | :--- | | A-shares | 17,114,518,793 | 76.78 | | H-shares | 5,176,777,777 | 23.22 | | Total Shares | 22,291,296,570 | 100.00 | - All A-shares and H-shares are unrestricted tradable shares[152] - The Board did not recommend an interim dividend for the half-year ended June 30, 2025[153] Securities Transactions and Litigation As of June 30, 2025, the Company repurchased 89.5539 million A-shares (approximately RMB 337 million) and 83.6780 million H-shares (approximately HKD 222 million) for cancellation, as authorized by the general meeting of shareholders, with no other purchases, sales, or redemptions of listed securities by the Group during this period, and no significant litigation, arbitration, or claims - As of June 30, 2025, the Company repurchased 89.5539 million A-shares on the Shanghai Stock Exchange, with a total repurchase price of approximately RMB 337 million[154] - 83.6780 million H-shares were repurchased on the Hong Kong Stock Exchange, with a total repurchase price of approximately HKD 222 million[154] - All repurchased shares will be cancelled in accordance with the law[154] - For the six months ended June 30, 2025, the Group had no significant litigation, arbitration, or claims[155] Audit and Risk Management Committee The Audit and Risk Management Committee reviewed the Group's adopted accounting principles and methods, discussed internal control and financial reporting matters with the Board, including the consolidated results for the six months ended June 30, 2025, and expressed no disagreement with the accounting principles and methods adopted by the Group - The Audit and Risk Management Committee reviewed the accounting principles and methods adopted by the Group and discussed internal control and financial reporting matters[157] - The Committee had no disagreement with the accounting principles and methods adopted by the Group[158] Personnel Changes As of June 30, 2025, the Group employed 85,196 employees, with several changes in Board and Supervisory Committee members during the reporting period, including Liu Tiexiang's departure as Vice Chairman and General Manager, Cheng Guowei's election as a Director and appointment as Chairman of the Board's Planning, Development and Digitalization Committee, and the departure of Supervisory Committee Chairman Guo Junxiu and some supervisors due to the abolition of the Supervisory Committee, additionally, He Xiaoqun and Li Zhiyong were appointed as Deputy General Managers - As of June 30, 2025, the Group employed 85,196 employees[142] Key Personnel Changes (H1 2025) | Name | Position Held | Change | Reason for Change | Date of Change | | :--- | :--- | :--- | :--- | :--- | | Liu Tiexiang | Vice Chairman, Director, General Manager | Departure | Work adjustment | August 26, 2025 | | Cheng Guowei | Director | Election | Shareholder meeting election | February 12, 2025 | | Guo Junxiu | Chairman of Supervisory Committee | Departure | Abolition of Supervisory Committee | August 29, 2025 | | He Xiaoqun | Deputy General Manager | Appointment | Board appointment | January 17, 2025 | | Li Zhiyong | Deputy General Manager | Appointment | Board appointment | June 23, 2025 | Other Significant Matters On June 24, 2025, the Company signed an agreement to transfer its 20% equity interest in New Shanghai International Tower to Eastern Airlines Assets for approximately RMB 286 million, and as of July 31, 2025, the Company had cumulatively repurchased 204 million shares, representing 0.9132% of total shares, with A-share repurchases totaling approximately RMB 337 million and H-share repurchases approximately HKD 311 million, while actual amounts of continuing connected transactions remained within annual limits - The Company plans to transfer its 20% equity interest in New Shanghai International Tower to Eastern Airlines Assets for approximately RMB 286 million[163] - As of July 31, 2025, the Company had cumulatively repurchased 204 million shares, representing 0.9132% of total shares, with A-share repurchases amounting to approximately RMB 337 million and H-share repurchases approximately HKD 311 million[163] H1 2025 Continuing Connected Transactions vs. Annual Caps (RMB million) | Transaction Item | H1 2025 Actual Amount | 2025 Continuing Connected Transaction Annual Cap | | :--- | :--- | :--- | | Maximum daily deposit balance | 7,537 | 17,000 | | Total aircraft and engine lease payments | 6,429 | USD 4.6 billion or equivalent RMB | | Exclusive operating transport service fees for passenger aircraft cargo business - amount received | 2,577 | 8,800 | | Aviation information technology services - amount paid | 695 | 1,050 |