Major Chinese airlines face full-year losses

China’s three largest airlines, Air China, China Eastern Airlines, and China Southern Airlines, are projected to face full-year losses following weak third-quarter results. The downturn is attributed to surging jet fuel costs, weak domestic airfares, and disruptions caused by typhoons.

Air China and China Eastern Airlines are expected to record their seventh consecutive annual net loss since the COVID-19 pandemic. Air China reported a third-quarter net profit of 270.6 million yuan, a 92.6% decrease from the previous year, while China Eastern’s third-quarter net profit fell 98.2% to 64 million yuan.

China Southern Airlines, which had previously returned to profitability, is also expected to slip into the red, reporting a third-quarter net loss of 609 million yuan. Analysts note that Chinese airlines are particularly vulnerable to oil price volatility because they hedge less fuel than their Asian and European counterparts. Additionally, intense competition from high-speed rail has contributed to declining domestic yields.