BEIJING,CHINA — As China abandons its zero-COVID policy, leading airlines face significant losses, with flagship carrier Air China reporting a record annual loss of 38.6 billion yuan ($5.61 billion). 

China Eastern Airlines, based in Shanghai, disclosed a record 37.4 billion yuan loss in 2022, surpassing its 2021 loss of 12.2 billion yuan.

With restrictions easing, analysts predict a return to profit for China's top airlines this year. Flight Master data shows domestic flight numbers surpassed 2019 levels mid-month, and international flights to and from China reached about 30% of pre-pandemic levels this week, an increase from around 10% earlier in the year.

China Southern Airlines revealed a record annual loss of 32.7 billion yuan on Tuesday, exceeding its 12.1 billion yuan loss in 2021. Nevertheless, the Guangzhou-based airline's management expects domestic passenger demand to fully recover by May, with international capacity reaching 40% of 2019 levels during the peak summer season, according to Daiwa analyst Kelvin Lau.

Air China's 2022 record loss of 38.6 billion yuan more than doubled its 16.6 billion yuan loss in 2021, a year with fewer COVID-related lockdowns. A Reuters calculation estimates the Beijing-based airline's combined losses over the past three years at nearly 70 billion yuan.

The Ministry of Transport's data indicates a 42.9% decline in China's passenger traffic in 2022, with 252 million people traveling.