Air China, China Eastern and China Southern Warn of First-Half Losses on High Fuel Costs

Air China, China Eastern and China Southern each warned of first-half losses as surging fuel costs and Middle East tensions hit margins, according to Jiemian News. Air China预计 a net loss of about 2.1 billion yuan to 2.6 billion yuan, China Eastern 1.8 billion yuan to 2.4 billion yuan, and China Southern 3.473 billion yuan to 3.973 billion yuan, putting the three carriers' combined first-half losses at at least 7.3 billion yuan. They had all been profitable in the first quarter.

Jiemian News reported that Brent crude briefly rose to around $119.5 a barrel in early March and aviation kerosene climbed from about 5,600 yuan per metric ton in March to around 9,800 yuan in April before easing to 8,030 yuan in July. The article said fuel typically accounts for 30% to 40% of an airline's total costs, while international air travel demand remained stronger than domestic demand in the first half, and China Railway said nationwide rail passenger traffic reached 2.348 billion in the first half, up 5% year on year.

The three state-backed carriers are also accelerating international expansion. Air China, China Eastern and China Southern increased international available seat kilometers by 4.1%, 5.93% and 13.06%, respectively, while their international revenue passenger kilometers rose 14%, 12.18% and 13.29%. Air China said it operates 32 Europe routes and 53 round-trip flights a day between China and Europe, while China Eastern added routes from Shanghai to Adelaide and Tbilisi and is expanding into Central Asia.

The carriers also stepped up wide-body aircraft purchases. Air China said on July 17 it will buy 15 Airbus A350 wide-body jets for delivery in 2030-2032, and China Eastern said on June 26 it will buy 25 Airbus A330neo aircraft for delivery in 2029-2032. The article said Chinese airlines have disclosed orders for 476 aircraft since the end of 2025.