Air China's Passenger Recovery and Its Implications for the Global Aviation Sector

The global aviation sector is witnessing a transformative post-pandemic recovery, with Air China emerging as a pivotal player in reshaping demand dynamics. As China's largest airline, Air China's passenger traffic resurgence-from a 2020 low of 13.1 million passengers in January to 13.1 million in January 2025, according to Simple Flying-reflects both domestic resilience and cautious international expansion. This recovery, however, is not uniform: while domestic routes have rebounded to 2019 levels on key corridors like Beijing-Shanghai, according to CEIC data, international traffic remains at 37.5% of pre-pandemic volumes (Simple Flying). These trends underscore the airline's strategic recalibration and its broader implications for global connectivity.

Passenger Traffic: Domestic Resilience, International Caution

China's domestic aviation market has been a cornerstone of Air China's recovery. By 2024, domestic passenger traffic reached 664.657 million, surpassing 2019 levels, according to IATA. This outperformance is driven by pent-up demand and a robust domestic tourism sector, with Air China's load factors exceeding 60% in early 2023, according to a ResearchGate study. For instance, the Beijing-Shanghai route alone recorded 8.246 million passengers in 2019, a figure matched by 2024 (CEIC data).

Internationally, Air China's growth has been more measured. While 2024 international passenger traffic in China hit 65.556 million (IATA), Air China's own international traffic in January 2025 stood at 1.618 million passengers-still below pre-pandemic benchmarks (Simple Flying). The airline has prioritized high-yield markets, such as Japan (171% capacity growth in 2024) and Germany (near-doubling of operations), leveraging its Star Alliance partnerships (CEIC data). However, European expansion outside Frankfurt and Munich has been cautious, with capacity up just 14% compared to 2019 levels (CEIC data). This strategy balances risk with reward, focusing on profitable routes rather than broad geographic sprawl.

Financial Health: Profitability on the Horizon?

Air China's financial metrics tell a story of cautious optimism. After a RMB 28.1 billion net loss in 2021's first three quarters (CEIC data), the airline reported a 3.2% net profit margin in 2022, fueled by a 150.2% revenue surge (Simple Flying). By 2024, available seat kilometers (ASK) surpassed 2019 levels at 1,016 billion, while revenue passenger kilometers (RPK) reached 836 billion (ResearchGate study). Analysts project operating income of CN¥12,590 million in 2025, according to Simply Wall St, with earnings per share (EPS) expected to grow by 79.8% annually (Simply Wall St).

Yet challenges persist. Air China's debt-to-equity ratio of 2.16 as of Q2 2023 remains elevated compared to the industry average of 1.5 (Simple Flying), and its stock price is still 60% below pre-pandemic peaks (ResearchGate study). However, its current ratio of 0.51 and debt-to-equity of 1.05-better than China Southern and China Eastern-suggest stronger liquidity and solvency (ResearchGate study). Cargo operations, contributing 12.5% of 2022 revenue (Simple Flying), also provide a buffer against passenger demand volatility.

Global Sector Implications: A Model for Recovery?

Air China's trajectory offers insights for the broader aviation sector. Its unique position as the only Chinese carrier with a six-continent network-particularly on lucrative China-Europe and China-North America routes (Simple Flying)-positions it to capitalize on shifting demand patterns. For instance, its focus on high-yield international markets aligns with IATA's projection of a 4.6% global passenger demand increase in August 2025 (IATA).

However, the airline's recovery also highlights sector-wide challenges. While China's domestic market has rebounded, international traffic remains fragile, with global international passenger numbers still at 37.5% of 2019 levels (Simple Flying). Air China's cautious approach-prioritizing alliance partnerships over new routes-may serve as a blueprint for other carriers navigating uncertain demand.

Conclusion: A Prime Candidate for Long-Term Growth

Air China's post-pandemic recovery is a testament to its operational agility and strategic foresight. With domestic demand solidified and international routes selectively expanded, the airline is poised to benefit from lower fuel costs, expanded visa-free policies, and a global passenger market projected to reach 5.2 billion in 2025 (IATA). While financial risks like high debt persist, its improving profitability metrics and unique global network make it a compelling candidate for long-term investment. As the aviation sector recalibrates, Air China's journey offers a microcosm of the challenges and opportunities defining the post-pandemic era.