The performance divergence of the three major airlines in 2025: China Southern Airlines turned a profit with a net income of 857 million yuan, why didn't China Eastern and Air China keep up?

Ask AI · Does the divestment of cargo business affect the profitability of Air China and China Eastern?

Meiri Reporter: Shu Dongni Meiri Editor: Bi Luming

Recently, the three major airlines—Air China (SH601111, stock price 7.04 yuan, market value 122.8 billion yuan), China Eastern (SH600115, stock price 4.54 yuan, market value 100.3 billion yuan), and China Southern Airlines (SH600029, stock price 5.93 yuan, market value 107.5 billion yuan)—successively released their 2025 annual reports. Overall, the aviation industry continues its recovery trend, with all three airlines achieving year-on-year growth in operating revenue, and their operational scales have basically returned to 2019 levels.

However, on the profit side, the three airlines show significant divergence: China Southern Airlines was the first to turn losses into profits, marking its first annual profit since 2020, while Air China and China Eastern remain in loss.

China Southern Airlines turns profitable, Air China and China Eastern still in loss

In 2025, the revenue of Air China, China Eastern, and China Southern Airlines was 171.5 billion yuan, 139.9 billion yuan, and 182.3 billion yuan respectively, all surpassing the levels of the same period in 2019.

But in terms of profit, none of the three airlines have recovered to their 2019 profit levels, and their performances vary greatly. In 2025, the net profit attributable to shareholders was -1.77 billion yuan for Air China, -1.63B yuan for China Eastern, and 857 million yuan for China Southern Airlines. China Southern was the first to turn profitable, but Air China and China Eastern still posted losses.

Financial reports show that the key to China Southern’s early profitability lies in its strong logistics segment—its holding subsidiary, China Southern Logistics, contributed a net profit of 3.58B yuan for the full year, bringing approximately 1.97B yuan in benefits to the listed company, making it a crucial factor in turning losses into profits; combined with rapid profit growth in aircraft maintenance and repair services, these factors jointly helped China Southern lead the industry in profitability amid overall pressure.

Both Air China and China Eastern previously had cargo business segments, but both have now been divested from the listed companies and listed separately. China Eastern Logistics was listed on the Shanghai Stock Exchange Main Board in 2021, and China Cargo Airlines was listed on the Shenzhen Stock Exchange in December 2024. Li Xiaojin, director of the Aviation Economics and Development Research Institute (AIR) at Civil Aviation University of China, believes that the profitability gap between China Southern and the other two airlines is mainly influenced by cargo and aircraft maintenance businesses. If only passenger transport is considered, China Southern’s performance may be inferior to that of Air China and China Eastern.

International routes grow collectively but still haven’t fully recovered to 2019 levels

Looking at the financial reports, one common feature of the three airlines in 2025 is the rapid growth of international routes. In terms of international passenger volume, all three airlines saw double-digit growth rates, far exceeding domestic routes.

The 2025 annual reports show that Asian regional routes recovered more prominently, becoming one of the main sources of international route growth. All three airlines continued to optimize their route networks during the reporting period, adding or restoring multiple international routes, with a focus on Asia and some international markets. For example, Air China opened 12 new or resumed international routes in 2025.

In 2025, the number of countries in China that offer visa-free entry increased to 48, and the number of countries with mutual visa exemption expanded to 29, with inbound and outbound travelers reaching 697 million, a year-on-year increase of 14.2%, setting a new record. Against this backdrop, the speed of international route recovery for the three airlines has significantly accelerated, directly reflecting the improvement in inbound and outbound tourism environments.

However, at the industry-wide level, the current level of international aviation activity has not yet fully recovered to 2019 levels. According to data from the Civil Aviation Administration of China, in 2019, China’s international passenger throughput was 139.35M, while in 2025 it was 117.8M, indicating there is still considerable room for growth.

Li Xiaojin analyzed to reporters that the low recovery rate of North American routes is mainly due to non-civil aviation factors, compounded by some Middle Eastern routes being suspended. Many wide-body aircraft have been forced to be deployed on domestic and nearby international routes. Meanwhile, the increasingly dense high-speed rail network and fierce competition have also caused the civil aviation industry to face the dilemma of “more passengers but less profit.”

In terms of overall passenger transport volume, all three airlines exceeded their 2019 levels in 2025, with volume recovery basically complete. However, the real obstacle to profit lies in revenue levels—ticket prices have not yet returned to 2019 levels, and the dilemma of “increased revenue without increased profit” remains unresolved. According to Li Xiaojin, passenger business has not yet fully recovered, which is a core challenge faced by all three airlines.

Daily Economic News