China’s top three airlines head for full-year losses as fuel costs weigh

China's three leading airlines are facing significant financial challenges, with forecasts indicating they will record full-year losses despite strong quarterly earnings in the third quarter. Analysts attribute the poor performance to a combination of rising jet fuel costs, weakening domestic fares, and disruptions caused by typhoons during the traditionally profitable summer travel period.

Air China, China Eastern Airlines, and China Southern Airlines are all expected to return to losses after posting losses in the first nine months of the year. The surge in fuel prices, which have more than doubled since military actions between the US and Iran, has hit the airlines hard as they have less fuel hedging compared to their Asian and European counterparts.

Additionally, domestic fares were weak this quarter due to intense competition and high-speed rail alternatives. Despite a slight improvement in third-quarter earnings that exceeded very low expectations, fuel costs remain the primary threat to the airlines' margins.