Chinese carriers earned a collective net profit of CNY26 billion ($4.12 billion) in 2011, down 26% from CNY35.1 billion for 2010 due to a slowing of domestic demand. This however is not the full picture as passenger numbers were up. Cargo volume was down about 2% to 5.52m tones. It is therefore reasonable to assume that costs have risen and passenger demand has not kept pace with capacity increases, even though Chinese airlines have reduced aircraft deliveries by 60 in 2011 and have worked to cut capacity.
We do know that passenger and cargo traffic grew faster in economically underdeveloped Western China than in the more prosperous Eastern half of China during 2011. Passenger boardings and cargo traffic for 2011 increased by 14.9% and 9.5%, respectively in Western China. 2012/2013 now presents a problem in that well over 150 aircraft are due to be introduced to a system that is both overcrowded and showing signs of overcapacity.
Airline earnings down in China but not in the West
