The performance divergence of the three major airlines in 2025

Ask AI · How can China Southern Airlines' logistics segment become the key to turning losses around?

Meiri Economic News Reporter: Shu Dongni Meiri Editor: Bi Luming

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

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However, on the profit side, the three airlines show clear 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 Airlines remain in loss.

Notably, on April 1, several airlines including Air China, Xiamen Airlines, and China United Airlines announced adjustments to the fuel surcharge standards for domestic passenger transportation. Starting from tickets sold on or after April 5, 2026, the fuel surcharge for domestic routes will be adjusted to: for segments of 800 kilometers (inclusive) or less, 60 yuan per passenger; for segments over 800 kilometers, 120 yuan per passenger. The surcharge start date is based on the original ticket issue date. For domestic tickets sold before April 5, 2026, if changed to sales on or after April 5, 2026, the collected fuel surcharges will not be refunded or supplemented.

Revenues all exceed 2019 levels

In 2025, the revenues of Air China, China Eastern, and China Southern were 171.5 billion yuan, 139.9 billion yuan, and 182.3 billion yuan respectively, all surpassing the same period in 2019.

However, in terms of profits, none of the three airlines have recovered to their 2019 profit levels, and their performances vary significantly. In 2025, the net profits attributable to the parent company were -1.77 billion yuan for Air China, -1.63B yuan for China Eastern, and 857 million yuan for China Southern. China Southern was the first to turn profitable, but Air China and China Eastern still remain in loss.

According to financial reports, the key reason for China Southern’s early profitability is its strong support from its logistics segment — its holding subsidiary, China Southern Logistics, contributed a net profit of 3.58B yuan for the full year, bringing about 1.97B yuan in benefits to the listed company, making it a crucial factor in turning losses around; additionally, profits from aircraft maintenance and repair services grew rapidly, jointly helping China Southern achieve profitability ahead of the industry’s overall pressure.

Both Air China and China Eastern also had freight business segments, but these have now been spun off 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 at Civil Aviation University of China, believes that the profitability gap between China Southern and the other two airlines is mainly influenced by their freight and aircraft maintenance businesses. If only considering passenger transport overall, China Southern’s performance may be inferior to that of Air China and China Eastern.

International routes grow rapidly

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

Among these, the recovery of Asian regional routes is particularly prominent, 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 or resumed 12 international routes in 2025.

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

However, on the industry-wide level, international aviation has not yet fully recovered to 2019 levels. According to data from the Civil Aviation Administration of China, in 2019, China’s international route 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, with many wide-body aircraft being forced to operate 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 “busy but not profitable.”

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 profits lies in revenue levels — ticket prices have not yet returned to 2019 levels, and the dilemma of “increased revenue without increased profit” remains unresolved. Li Xiaojin believes that the incomplete recovery of passenger transport business is a core challenge faced by all three airlines.

(Intern Chen Lijing also contributed to this article)

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