China's Big Three Airlines Brace for Steep Half-Year Losses Amid surging Jet Fuel Costs
Air China, China Eastern Airlines and China Southern Airlines were profitable in the first quarter of the year. China’s three largest carriers have forecast heavy losses for the first half of the year, as they confront the "formidable challenge" of significantly higher fuel costs. In separate earnings guidances, the ‘Big Three’ – comprising Air China, China Eastern Airlines and China Southern Airlines – say that despite cost management measures they were unable to fully recover the "substantial" spike in fuel costs for the six months ending 30 June. The latest forecasts suggest significant losses in the April-June quarter even though the three were profitable in the first quarter of the year on the back of strong travel demand. Significantly, net losses for the January-June period are expected to be steeper than in the year-ago period. Air China is forecasting a half-year attributable net loss of CNY2.1-2.6 billion ($310-384 million), compared to a net loss of CNY1.8 billion one year ago. China Eastern, meanwhile, estimates a half-year net loss of CNY1.8-2.4 billion, versus a CNY1.4 billion loss in the same period of 2025. China Southern, the country's largest operator, faces the steepest losses among the Big Three at CNY3.5-4 billion. This compares to its CNY1.5 billion net loss in the year-ago period. Beijing-based Air China says that while it "recorded substantial profits" in the first quarter, elevated jet fuel prices in the second "drastically" squeezed its profit margin. China Eastern adds: "Since March, rising fuel prices triggered by geopolitical tensions in the Middle East have presented formidable challenges to the aviation industry." It notes it has "promptly" implemented "practical measures" to address the spike in fuel prices, including by "adjusting and optimising flight operations”. It also “refined revenue management [and] increased the utilisation rate of fuel-efficient aircraft models".