China’s Big Three: One Profit, Two Still in Red

China Southern Airlines is the only one of the Big Three that has reported a net profit for 2025. Air China and China Eastern Airlines both reported full-year losses and have been unable to build on profitable third quarters.

China Southern reported a net profit of RMB 2.7billion compared to a very small RMB 25 million in 2024. Total revenues improved to RMB 182.3 billion from RMB 174.2 billion, while operating expenses were down to RMB 177 billion from RMB 171.8 billion. The airline recorded an operating profit of RMB 9.6 billion, up from RMB 8.3 billion in the previous year.

During 2025, China Southern carried 174 million passengers (151 million domestic, 1,8 million in Hong Kong, Macau, and Taiwan, 21,1 million international) and carried almost two million tonnes of cargo and mail. The airline benefited from China’s continued growth in air travel, with passenger numbers increasing by 10.5 percent to 770 million and cargo by 10.2 million tonnes. This upward trend was abruptly halted in November, when diplomatic tensions between China and Japan over Taiwan arose, and air travel between the two countries plummeted.

Instrumental to China Southern’s profit have been strict cost controls and improved operational performance, which translated into a 5.75-percentage-point increase in punctuality. The number of transit passengers at its Guangzhou hub increased by 19.2 percent, and by 3.8 percent at its Beijing hub.

China Southern’s 2026 outlook mainly mentions strategic initiatives, like: “The Group will comprehensively enhance its passenger operation capabilities, build core competitiveness in logistics, and deepen lean cost control. We will increase capacity deployment in the international passenger market and strive to secure additional flight slots.” However, it doesn’t predict the impact of higher jet fuel prices and inflation caused by geopolitical tensions in the Middle East, although these might be partially offset by increased demand and capacity between China and other regions.

By December 31, China Southern operated 972 aircraft, but this number had fallen to 963 by the end of February. That same month, the airline sold 10 Boeing 787-8s to lessor Avolon. The airline hasn’t disclosed its fleet renewal plans for this and the next two years.

Air China
Air China reported the 2025 results late last week, including a net loss of RMB 3.5 billion, compared with RMB 2.4 billion in 2024. Revenues were higher at RMB 176.8 billion from RMB 174 billion, with operating expenses up to RMB 177 billion. That’s not that different from China Southern, but Air China saw a change from an RMB 2.2 billion operating profit to an RMB 389 million loss. Air China also made RMB 575 million in asset and credit impairments.

Passengers carried rose by 3.4 percent to 160.1 million, of whom 136.9 million flew on the domestic network, and 4.9 million flew to Hong Kong, Macau, and Taiwan. International grew pax numbers by 15.3 percent to 18.9 million. Cargo was up by 3.9 percent to 1.538 million tonnes. The airline worked hard to improve productivity: “The Group steadfastly advanced its hub network strategy and made dedicated efforts to increase the scale of effective capacity deployment, achieving 367,600 million available seat kilometres for the year, representing a year-on-year increase of 3.24 percent.”

Air China had a fleet of 964 aircraft by December 31 after introducing 45 new aircraft and phasing out 11 older ones. It expects 40 new aircraft this year, 61 in 2027, and 70 in 2028, while phasing out 43 in the same period. In total, 68 Airbus A320neo family aircraft, 53 Boeing MAX aircraft, 15 787s, and 35 COMAC C919s are to join the airline.

For 2026, Air China upholds its four directions of “hub network, balanced passenger-cargo development, cost leadership, and brand strategy”. It identifies market fluctuations, exchange rates, competition, oil prices, and risk factors.

China Eastern
China Eastern Airlines also failed to turn a profit last year, reporting a net loss of RMB 1.95 billion, compared with RMB 4.8 billion in 2024. Revenues improved to RMB 139.9 billion from RMB 132.1 billion, while expenses grew to RMB 143.5 billion from RMB 137 billion. China Eastern still booked an RMB 274 million operating profit, compared with RMB 3.9 billion in 2024. Like China Southern, cost control and budget management were key priorities for the Shanghai-based airline.

The carrier grew its passenger count by 6.7 percent year-over-year to 149.9 million. China Eastern domestic was up 4.69 percent to 125.3 million passengers, regional was up 2.62 percent to 3.8 million, and international was up 21.4 percent to 20.8 million. Cargo grew by 7.7 percent to 10.2 million tonnes.

In the earnings release, China Eastern says: “Adhering to the guidelines of ‘more long-range flights, more international flights and more flights in emerging markets’, the Company continued to strengthen its routes in major hubs and improve the layout of domestic and international aviation networks. For international aviation networks, the Company opened 24 new international routes, bringing the total number of international (regional) routes to 249, covering 40 countries and 93 overseas destinations, and became the domestic airline covering the most international destinations.

China Eastern operated 826 aircraft by December 2025, introducing 48 aircraft and retiring 26. The airline had 14 C919 in the fleet that “completed more than 45 thousand hours of safe flights and transported over 2.6 million passengers, achieving large-scale and routine operation.” This year, China Eastern expects to introduce 51 aircraft and retire 22, in 2027 71 and 18 respectively, and in 2028 25 and 19. Over these three years, 35 C919s, 4 C909s, 67 A320neo family aircraft, 9 787s, and 32 MAX aircraft will be delivered. The airline disclosed an order for 101 Airbus A320neo aircraft last week.

Looking forward to 2026, China Eastern says that “the global economic growth will remain resilient in the short term. However, the rise of trade protectionism has exacerbated the vulnerability of the economic structure. The impact of geopolitical conflicts will persist, and the overall momentum of global economic growth will remain insufficient.” The earnings report includes scenarios for jet fuel prices, but they are out of sync with reality.

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About The Author

Richard Schuurman

Richard Schuurman is a freelance aviation reporter since 2016 and covers commercial aviation and the aerospace industry. He has contributed before to AirInsight between 2018-2024.

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