Shandong Airlines has seen an 88% plunge in its profit for the first quarter of 2019. This follows similar figures and results from airlines all around the world, struggling from higher fuel prices and increased competition.
The highly competitive Chinese market in which Shandong Airlines operates in, may have played a part in the attributable profits of only CNY38.4 million ($5.7 million).
Net profit totalled CNY34 million, 86.3% lower than compared to the same period last year. Expenses rose by 8.4% to CNY4.6 billion, with revenue growing slightly to CNY4.63 billion, 3% higher than during the first quarter of 2018.
Shandong Airlines is based in Jinan, in the Shandong province of China. Shandong Airlines is partly owned by Air China and thus has a strong backing behind it. Founded in 1994, the airline has grown and now has a fleet of over 120 aircraft flying to over 55 destinations. More than 50% of its destinations are domestic.
But Shandong Airlines isn’t the only carrier in trouble: Hawaiian Airlines also reported terrible figures for the first quarter and it may get worse after Southwest Airlines begins normal operations to and within Hawaii once its Boeing 737 MAX problems are solved.
So the aviation industry as a whole has some issues or another. Norwegian facing a huge crisis with its 787s and 737 MAX fleet, Hawaiian Airlines struggling to keep up with competition and carriers all around the world facing a global pilot shortage. The Lufthansa Group is also doing very badly. So, with many carriers in the red, should we be expecting lots more to go bust?