China's top airlines face full-year losses amid surging fuel costs
China's three largest airlines are on track for full-year net losses after weak third-quarter results, with surging jet fuel costs, weak domestic fares and typhoon disruptions hitting their traditionally strongest period. Analysts estimate Air China and China Eastern face a seventh consecutive annua
China's three biggest airlines are on track for full-year losses after posting far weaker third-quarter results than last year, as surging jet fuel costs, weak domestic fares and typhoon disruptions hit what is normally their most profitable period, according to analyst estimates compiled by LSEG.
Air China and China Eastern Airlines are heading for a seventh consecutive annual net loss since the COVID-19 pandemic, the estimates showed. China Southern Airlines, which returned to the black in 2025 for the first time since 2019, is also set to slip back into the red.
Air China's third-quarter net profit fell 92.6 per cent from a year earlier to 270.6 million yuan (US$40.62 million). China Eastern posted a net profit of 64 million yuan for the quarter, down 98.2 per cent from 2025. China Southern swung to a third-quarter net loss of 609 million yuan from a net profit of 3.84 billion yuan last year. All three airlines reported losses for the first nine months of the year, a period in which they were profitable in 2025.
The third quarter, which covers the peak summer travel season, is traditionally the strongest for Chinese airlines. All three carriers said the steep rise in jet fuel prices had a negative impact on their results. The price of jet fuel has more than doubled since the US and Israel launched a military campaign against Iran in late February, according to the report. Chinese airlines hedge far less of their fuel than many Asian and European peers, leaving them more exposed to swings in oil prices.
Domestic fares were weak in the third quarter amid intense competition, including from high-speed rail. Huatai Securities estimated Air China's yields, a proxy for airfares, fell 5 per cent during the period, leaving it unable to recoup higher fuel costs. Nathan Gee, head of Asia-Pacific transport research at BofA Global Research, said Chinese airlines are expected to remain in net loss into the seasonally weaker fourth quarter given the impact of spiking jet fuel. Gee said third-quarter earnings had come in slightly better than "very low expectations", with checks suggesting domestic fares were rising at double-digit rates after the October Golden Week holiday. However, fuel "remains the big headwind," he said, adding that Chinese airline margins remain under extreme pressure from spiking jet fuel and soft consumption demand.