China's big state-controlled airlines and oil firms said they suffered deep losses during the first quarter, when the country was at the height of its coronavirus battle, and warned of further pain to come.

China Southern Airlines, China Eastern, and Air China posted combined losses of nearly $2 billion in January-March, when domestic travel was essentially shut down for weeks and international links also were severely curtailed to stem the virus's spread.

China Southern, Asia's largest carrier, led the way down with a loss of $743 million, it said in a statement to the Hong Kong Stock Exchange, where it lists shares as well as in Shanghai.

Flag carrier Air China lost $678 million and China Eastern was $555 million in the red.

Prior to the virus, all three had ridden a wave of travel by increasingly prosperous Chinese consumers to post years of consistently strong growth.

The coronavirus was first detected in China in December, prompting Chinese authorities to impose weeks of unprecedented quarantine lockdowns and movement restrictions that paralysed the country, hitting the travel industry particularly hard.

Since March, China's economy has gradually stirred back to life, but the government and many citizens remain wary of a potential second wave of COVID-19 infections.

"In view of the uncertainty of the development and severe impact of COVID-19 on the civil aviation industry, it is expected that the group's operating results in the first half of 2020 will be adversely affected," China Southern said.

"Investors are reminded of the investment risks."

Aviation analytics consultancy Cirium said last week that China's economic resumption allows some cautious optimism, but added that the overall industry remained "firmly in the hibernation phase of the crisis".

"The situation will improve, but the timing and scale of recovery remains unclear," it said.

All three carriers saw their shares rise, however, as global markets gained on optimism the crisis is showing signs of ebbing, with China Southern's Shanghai shares up more than four percent in afternoon trading.

The COVID-19 crash in crude prices and demand also flooded the country's oil majors in red ink.

China's biggest oil producer PetroChina said it lost $2.29 billion in the quarter, and the virus blew a $2.79 billion hole in the balance sheet of Sinopec, the world's biggest refiner.

China's big four state-controlled banks, however, eked out mild profits after the government implemented an array of stimulus measures to inoculate the financial industry from the virus, including liquidity injections, rate cuts, and other steps.

Industrial and Commercial Bank of China led with an $11.93 billion profit, up 3.0 percent. Similar gains were posted by Bank of China, China Construction Bank and Agricultural Bank of China.

Shares of the oil and banking firms shares all rose on Thursday.

dma/dan

China Southern Airlines

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