China Southern Airlines retains AAA rating amid recovery

China Southern Airlines has affirmed its AAA credit rating, reflecting its dominant market position and substantial external support, according to a report by China Lianhe Credit Rating Co., Ltd. The airline's "South China Convertible Bonds" also retain an AAA rating with a stable outlook. While the airline experiences a recovery in key performance indicators such as capacity投入, passenger and cargo volume in 2024, it faces ongoing pressures from fuel costs, investment losses amounting to CNY 13.85 billion, and period expenses (汇兑损失9.12亿元), leading to a net loss attributable to the parent company of CNY16.96 billion. China Southern benefits from its relationship with the South China Aviation Group, accessing CNY 30 billion in credit facilities, with a balance of CNY 10.808 billion outstanding as of the end of 2024. The company's debt burden remains heavy, with a high asset-liability ratio of 84.05%, but its liquidity indicators are improving.