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

China's three largest airlines, Air China, China Eastern Airlines, and China Southern Airlines, are expected to report full-year losses after posting weaker third-quarter results in 2025. These airlines were profitable in the same period in 2025. The decline is attributed to surging jet fuel costs, weak domestic fares, and disruptions caused by typhoons during the traditionally profitable peak summer travel season.

Air China and China Eastern have been on a streak of consecutive annual net losses since the COVID-19 pandemic, while China Southern returned to profitability in 2025 for the first time since 2019. Analysts estimate that Air China's net profit fell 92.6% from a year earlier to 270.6 million yuan, and China Eastern's profit dropped 98.2% to 64 million yuan.

China Southern saw a third-quarter net loss of 609 million yuan, compared to a net profit of 3.84 billion yuan in the same period last year. The steep rise in jet fuel prices, more than double the previous level, has negatively impacted the airlines' results. Chinese airlines hedge less fuel than their peers, making them more vulnerable to oil price fluctuations.

Domestic fares were also weak in the third quarter, with intense competition from high-speed rail and high fuel costs making it difficult for airlines to recoup losses. Despite this, Chinese airlines are expected to remain in net loss during the traditionally weaker fourth quarter due to the impact of spiking jet fuel prices and soft consumption demand.