Significant improvement in performance: The three major airlines see a glimmer of turning losses into profits

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Source: Beijing Business Daily

The three major airlines’ path to reducing losses has finally seen an early breakthrough. As of the evening of March 30, the three major airlines had submitted their 2025 performance results. China Southern Airlines achieved full-year turnaround into profit with net profit of 857 million yuan. While China Eastern Airlines and Air China were unable to achieve full-year turnaround, their performance improved markedly. In 2025, all three major airlines stepped up their efforts to expand into international markets, and key indicators such as capacity deployment, passenger turnover volume, and load factor all saw obvious year-on-year increases. Among them, China Southern’s passenger business gross margin increased by 2.37 percentage points year-on-year. In 2026, the three major airlines did not stop digging into international markets; they successively opened multiple key routes in the summer–autumn seasons. At the same time, the three major airlines also stated in their financial reports that they will focus on improving market operations capability, optimizing capacity allocation, increasing aircraft utilization rates, and upgrading and optimizing the service standards system.

China Southern Airlines’ profit of 857 million yuan

In 2025, the operating revenue of all three major airlines increased. Air China’s operating revenue increased 2.87% year-on-year; China Eastern’s operating revenue increased 5.92% year-on-year; and China Southern’s operating revenue increased 4.61% year-on-year.

Among them, China Southern was the first to achieve full-year turnaround into profit, with a net profit margin of 857 million yuan. This is also China Southern’s first annual profit since 2020. China Eastern reduced losses by 2.593 billion yuan, with a full-year loss of 1.633 billion yuan, but its total profit turned into positive, reaching 274 million yuan. Air China had a full-year loss of 1.77 billion yuan.

Beijing Business reporter combed through the financial report data and found that in 2025, the main business revenue of the three major airlines improved significantly. Air China’s financial report showed that the group’s main business revenue (air passenger, cargo, and mail) was 169.064 billion yuan, up 2.73% year-on-year; China Eastern’s air transportation business revenue was 137.114 billion yuan, up 6.08% year-on-year; and China Southern’s main business revenue (air passenger and related services, cargo, and mail) was 176.358 billion yuan, up 4.72% year-on-year.

In terms of passenger revenue, growth in the international market became the key engine driving the performance of the three major airlines. Taking China Southern as an example, during the reporting period, the group’s newly added major routes or destinations included Guangzhou—Madrid, Guangzhou—Darwin, Fuzhou—Phnom Penh, Hangzhou—Kuala Lumpur, and Chongqing—Jakarta, among others. The number of flights built for countries along the “Belt and Road” saw a year-on-year growth of 15.4%. International passenger capacity input (measured by available seat kilometers) increased 18.46% year-on-year; international passenger turnover volume (measured by revenue passenger kilometers) increased 19.57% year-on-year; and the load factor on international routes increased 0.78 percentage points year-on-year.

Air China’s international passenger revenue increased 14.13% year-on-year. China Eastern also said in its financial report that the company’s international revenue from its main business grew significantly; it opened multiple new international routes, and its international transport turnover volume increased 19.77% year-on-year.

Industry insiders in civil aviation said that the recovery of international routes plays an important role in improving airlines’ performance. On one hand, it can raise the utilization rate of wide-body aircraft; on the other hand, it can reduce the deployment of domestic capacity, to a certain extent easing the intense competition in the domestic market.

Sustained open-source while practicing cost discipline

Besides the boost from the international market, the three major airlines also achieved solid results in areas such as business management, operational services, and cost control.

In its financial report, China Southern mentioned that it is advancing a new round of the “Five Major Structural Adjustments” to further optimize fleet structure and improve the efficiency of using real estate; enhance hub competitiveness, with Guangzhou hub and Beijing hub handling transiting passengers increasing 19.2% and 3.8% year-on-year, respectively; steadily advance digital transformation, formulate and implement an “AI+” special action plan, build an enterprise-level large-model platform, and launch 417 intelligent agents; strengthen code-sharing and joint-venture cooperation with international airlines, and roll out “one-ticket end-to-end” across airlines and baggage-through service at 11 overseas通航 points.

In terms of reducing the cost of funds, China Eastern’s financial report shows that the company deepened internal capital financing to reduce external high-cost financing; seized the market window period to issue bonds, issuing nine tranches of ultra-short-term financing bills and six tranches of medium-term notes throughout the year, with a total financing amount of 30.5 billion yuan; fully leveraged the cost advantages of bill financing, with the total discounting scale reaching 42.5 billion yuan for the year; and precisely assessed the trend of LPR rate cuts, planning ahead for low-cost funding. In 2025, the company’s interest expense decreased by 963 million yuan, down 18.71% year-on-year.

In expanding its customer base, Air China’s financial report said that the group focuses on the mainstream markets of corporate and government business travelers and Phoenix Zhi Yin members, launched 31st-anniversary privilege products, and, through an innovative delivery form of digital assets, realized an additional 37.64 million yuan in revenue during the off-season. It also promoted a customer account manager system to full coverage within the country and expanded it to overseas first- and second-tier sales branches. By the end of the reporting period, the number of effective large customers reached 7,887, achieving revenue of 15.71 billion yuan, up 7.3% year-on-year.

Expand international routes and cultivate emerging markets

Judging from the performance in 2025, the three major airlines had achieved collective profitability in a single quarter in the third quarter. The industry insiders mentioned above said that the three major airlines’ primary goal is, in every possible way, to reduce losses in the off-season; to accelerate the recovery of international routes and increase them; and to continuously promote cost reduction and efficiency gains.

According to the summer–autumn season flight schedule plan, the three major airlines are still ramping up the international market.

On the first day of the new season, China Southern opened the Beijing Daxing—Helsinki route, which is China Southern’s first route to Finland and also the first direct North Europe route opened by domestic airlines at Beijing Daxing Airport. The load factor on the inaugural flights was as high as 98%. According to information from its financial report, the main newly planned routes for the China Southern Airlines group in 2026 also include Xiamen—Vientiane, Fuzhou—Amsterdam, and Nanjing—Jakarta, among others.

Air China plans to increase the frequency of flights on more than 10 routes, such as Beijing—Warsaw, Milan, and Budapest, and add two international routes: Beijing Daxing—Frankfurt and Beijing Daxing—Milan. China Eastern’s data show that its international and regional routes have an average weekly planned first-departure frequency of 1,400 flights. Among them, Europe routes have more than 160 weekly first-departures, up 24% year-on-year.

On March 27, Air China held a 2025 annual performance briefing. In the Q&A portion of the interaction, China National Aviation Company’s President Qu Guangji said that the company will further try to improve the level of earnings and strive to achieve good returns. At the same time, it will actively respond to changes in the market, quickly adapt to market development, improve resource allocation efficiency, strengthen coordination with Air China system carriers, and actively implement the “together fly: Air, Shenzhen, Shan, and Australia.”

China Eastern, meanwhile, said in its financial report that in 2026 it will focus on refining the domestic market, expanding the international market, and cultivating emerging markets. It will continue to optimize the passenger transfer process and improve transfer connection efficiency. It will release total flight resources, optimize capacity allocation, and focus on improving aircraft utilization. It will deepen industrial coordination of “aviation + culture, tourism, exhibitions, and business fairs,” expand multi-modal transport and value-added services; and establish a refined and dynamic cost control system to strictly control both visible and hidden costs across the whole chain.

Beijing Business Daily reporter Guan Zichen Niu Qingyan

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