Both carriers said tougher competition is affecting profitability, with pressures mainly coming from low-cost airlines and a newly launched high-speed rail network.
Last month the government unveiled guidelines to jump-start the country's young budget airline industry, which included pledges of financial support. China's aviation regulator also said it would simplify approvals for new low-cost airlines.
These potentially new entrants will draw away customers from China's big three carriers - Air China, China Eastern and China Southern. In addition, the recent launch of a high-speed rail network has offered commuters and travelers another alternative for getting around the country.
An austerity drive by the government is also having an impact on the airlines' earnings. While the carriers are operating at around 80% capacity, the Chinese airlines have been struggling to fill seats in the business and first class cabins, as Beijing had issued a clampdown on lavish spending by government officials, including luxury trips abroad.
According to local media, China Eastern lost about one million premier clients, which translated to a loss of over 1 billion Chinese yuan in revenue last year.
reporter
Park Sae-jin
swatchsjp@ajunews.com