---
title: "Annual Report Insight | Just as performance began to improve, oil prices surged. Will the three major airlines continue to \"recover\" in 2026?"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/281385354.md"
description: "As of April 1, Air China, China Eastern Airlines, and China Southern Airlines have all completed the disclosure of their 2025 annual reports. The data shows that in 2025, the three major airlines achieved a total revenue of 493.682 billion yuan, a year-on-year increase of 4.36%; the net profit attributable to shareholders was -2.546 billion yuan, a year-on-year increase of 58.66%. As the \"national team\" of the domestic air transport industry, the performance of the three major airlines has always been regarded as a \"barometer\" of industry prosperity. In 2025, the civil aviation industry continued its steady growth trend, with the total passenger transport volume increasing by 5.5% year-on-year to 770 million passengers. However, against the backdrop of an overall industry recovery, the performance of the three major airlines in 2025 showed significant differentiation: China Southern Airlines was the first to turn losses into profits, while Air China and others fell into the embarrassing situation of \"book losses\" due to accounting standards. In 2025, the strong recovery of international routes injected key growth momentum into the three major airlines. However, entering 2026, the risk of high oil prices has surged, becoming a \"Sword of Damocles\" hanging over the airlines. For the three major airlines, which are teetering on the line of profit and loss, whether they can continue to reduce losses and achieve overall profitability in 2026 remains a severe test. China Southern Airlines \"turned losses into profits,\" while Air China faced \"book losses.\" In 2025, the operating revenue of the three major airlines all reached historical highs. China Southern Airlines continued to lead with a revenue scale of 182.256 billion yuan, a year-on-year increase of 4.61%; Air China achieved a revenue of 171.485 billion yuan, a year-on-year increase of 2.87%; China Eastern Airlines had a revenue of 139.941 billion yuan, a year-on-year increase of 5.92%"
datetime: "2026-04-01T14:10:08.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/281385354.md)
  - [en](https://longbridge.com/en/news/281385354.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/281385354.md)
---

# Annual Report Insight | Just as performance began to improve, oil prices surged. Will the three major airlines continue to "recover" in 2026?

As of April 1, Air China, China Eastern Airlines, and China Southern Airlines have all completed the disclosure of their 2025 annual reports. The data shows that in 2025, the three major airlines achieved a total revenue of 493.682 billion yuan, a year-on-year increase of 4.36%; the net profit attributable to shareholders was -2.546 billion yuan, a year-on-year increase of 58.66%.

As the "national team" of the domestic air transport industry, the performance of the three major airlines has always been regarded as a "barometer" of industry prosperity. In 2025, the civil aviation industry continued its steady growth trend, with the total passenger transport volume in the industry increasing by 5.5% year-on-year to 770 million passengers. However, against the backdrop of an overall industry recovery, the performance of the three major airlines in 2025 showed significant differentiation: China Southern Airlines was the first to turn losses into profits, while Air China and others fell into the embarrassing situation of "book losses" due to accounting standards.

In 2025, the strong recovery of international routes injected key growth momentum into the three major airlines. However, entering 2026, the risk of high oil prices has surged, becoming a "Sword of Damocles" hanging over the airlines. For the three major airlines, which are teetering on the line of profit and loss, whether they can continue to reduce losses and achieve overall profitability in 2026 still faces severe tests.

**China Southern Airlines "turns losses into profits," Air China "book losses"**

In 2025, the operating revenue of the three major airlines reached a historical high. China Southern Airlines continued to lead with a revenue scale of 182.256 billion yuan, a year-on-year increase of 4.61%; Air China achieved a revenue of 171.485 billion yuan, a year-on-year increase of 2.87%; China Eastern Airlines had a revenue of 139.941 billion yuan, a year-on-year increase of 5.92%.

Performance of the three major airlines in 2025. Image/Beijing News Shell Finance reporter Wang Zhenzhen created

However, in terms of profitability, the three major airlines have taken completely different paths. In 2025, the net profit attributable to shareholders of China Southern Airlines was 857 million yuan, successfully turning losses into profits compared to a loss of 1.696 billion yuan in 2024, becoming the "leader" among the three major airlines. China Southern Airlines attributed its turnaround to precise deployment of passenger transport capacity and cost optimization. From the perspective of non-recurring gains and losses, its total non-recurring gains and losses in 2025 were 712 million yuan, of which other non-operating income and expenses, excluding government subsidies, contributed 842 million yuan, which was an important support for its net profit turnaround.

China Eastern Airlines continued the trend of reducing losses in recent years, with the loss in 2025 significantly narrowing by 61.36% compared to 2024. In contrast, Air China's performance was somewhat lackluster. In 2025, it reported a net loss of 1.77 billion yuan, an increase of 646.04% compared to a loss of 237 million yuan in the same period last year, marking the sixth consecutive year of losses for Air China since 2020, with a cumulative loss of 72.723 billion yuan It is worth noting that China Eastern Airlines and Air China have both achieved a turnaround or significant improvement in total profit—China Eastern Airlines is expected to have a total profit of 274 million yuan in 2025, turning a profit; Air China has a total profit of -1.597 billion yuan, with the loss amount slightly narrowing year-on-year.

According to reporters from Beijing News and Beike Finance, both Air China and China Eastern Airlines clearly stated in their annual reports that the reversal of some previously deductible losses formed deferred tax assets during the reporting period led to a significant increase in income tax expenses. Specifically, Air China's income tax expenses increased by 1.08 billion yuan year-on-year, and China Eastern Airlines also recorded high income tax expenditures for the same reason. This adjustment is a financial accounting behavior under accounting standards and does not indicate a substantive deterioration in operations. In fact, excluding the income tax factor, both companies have achieved profitability at the operational level—In the first three quarters of 2025, the three major airlines collectively turned a profit, with Air China, China Eastern Airlines, and China Southern Airlines achieving net profits attributable to shareholders of 1.87 billion yuan, 2.103 billion yuan, and 2.307 billion yuan, respectively.

Whether it is the first to turn a profit, China Southern Airlines, or Air China, which continues to record losses, the traditional off-season in the fourth quarter has dragged down their performance. In the fourth quarter, Air China reported a net loss of 3.64 billion yuan, while China Southern Airlines reported a net loss of 1.45 billion yuan. This seasonal characteristic has been reflected in annual reports over the years, and 2025 is no exception.

Net profit performance of the three major airlines in 2025 by quarter. Image/Beijing News Beike Finance reporter Wang Zhenzhen created

**International routes become the growth engine, passenger load factor improves but ticket prices are under pressure**

Looking at the annual reports of the three major airlines, the strong recovery of international routes has become a key engine driving performance. With international flights restored to over 90% of 2019 levels, international passenger transport volume is expected to grow by 21.6% year-on-year in 2025.

China Eastern Airlines' international business performance is particularly impressive, with annual international business revenue of 45.733 billion yuan, a significant year-on-year increase of 20.82%, while domestic business revenue was 90.419 billion yuan, a slight year-on-year decrease of 0.28%. Air China's international passenger revenue increased by 14.13% year-on-year, and China Southern Airlines' international business revenue increased by 15.15% to 57.603 billion yuan.

However, while both capacity input and passenger turnover have increased, ticket price levels have declined. In 2025, the three major airlines are seeking a balance between "volume" and "price," but overall present a trend of "increased volume and decreased prices."

In terms of passenger load factor, all three major airlines have shown significant improvement, with Air China, China Eastern Airlines, and China Southern Airlines' overall load factors being 81.88%, 85.86%, and 85.74%, respectively. However, there is still pressure on unit revenue due to price competition. Air China's revenue per passenger kilometer is expected to decrease by 3.6% year-on-year, mainly dragged down by a 4.9% decline in domestic routes, although the decline has narrowed compared to the first half of the year; China Southern Airlines' revenue per charged passenger kilometer is expected to decrease by 4.17% year-on-year, with domestic routes dropping from 0.48 yuan to 0.46 yuan; China Eastern Airlines' international routes have become the core of growth, with international business revenue increasing by 20.82% year-on-year, but ticket prices are also under pressure.

It is worth noting that there are signs of a recovery in industry revenue levels in the fourth quarter. A research report from Huatai Securities shows that Air China's unit revenue per passenger kilometer in the fourth quarter increased by about 0.2% year-on-year, reflecting the initial effectiveness of the industry's consensus on "anti-involution." However, after entering 2026, international oil prices are expected to rise sharply, testing airlines' ability to pass on costs through fuel surcharges, and the uncertainty of ticket price trends remains.

In addition to the main business of airlines, the performance contributions from equity stakes and subsidiaries are also important factors affecting the performance of the three major airlines.

Performance of major holding and equity stake companies of the three major airlines in 2025. Image/Beijing News Shell Finance reporter Wang Zhenzhen illustration

China Southern Airlines' net profit turning from loss to profit in 2025 is inseparable from the stable contribution of China Southern Logistics. Among the 10 holding and equity stake companies disclosed, 4 achieved profitability, with China Southern Logistics achieving a net profit of 3.575 billion yuan. Xiamen Airlines is the only profitable company among the 7 airlines held by China Southern Airlines, with a net profit growth of about 11.76% to 779 million yuan.

As for Air China, of the 9 holding and equity stake companies disclosed, only 3 achieved profitability, with the stake in Cathay Pacific achieving a net profit of 8.748 billion yuan in 2025, becoming an important support for Air China's performance. The other two are Ameco (Beijing Aircraft Maintenance Engineering Co., Ltd.) and AVIC Finance. Among China Eastern Airlines' 7 holding and equity stake companies, 4 achieved profitability, namely China Eastern Yunnan, Shanghai Airlines, China Eastern Technology, and STARCO (Shanghai Aerospace Technology Co., Ltd.).

**The biggest risk facing 2026: Oil prices**

In 2025, the decline in aviation fuel prices provided some breathing space for the cost side of the three major airlines. Air China's aviation fuel costs decreased by 6.85% year-on-year to 50.041 billion yuan, China Southern Airlines' fuel costs fell by 4.48% to 52.526 billion yuan, and China Eastern Airlines' aircraft fuel costs decreased by 3.98% to 43.690 billion yuan.

However, this favorable factor may reverse in 2026. Recently, due to geopolitical conflicts in the Middle East, international oil prices and aviation fuel costs have risen sharply, prompting several domestic airlines to successively raise international route fuel surcharges. On April 1, Xiamen Airlines and China United Airlines announced that the domestic route fuel surcharge is expected to be raised starting April 5, with a charge of 60 yuan for segments under 800 kilometers and 120 yuan for segments over 800 kilometers. This increase in fuel surcharges means that domestic route fuel fees will rise by 50 yuan and 100 yuan in April, respectively, a fivefold increase According to the annual reports of the three major airlines, if the average jet fuel price rises by 5%, Air China’s jet fuel costs will increase by approximately 2.502 billion yuan; if the average jet fuel price rises by 10%, China Southern Airlines' fuel costs will increase by approximately 5.253 billion yuan.

To cope with the risk of oil price fluctuations, the three major airlines have taken corresponding measures. China Eastern Airlines stated in its annual report that the company can lock in jet fuel costs through crude oil swap contracts, crude oil call options, collar option combinations, and crude oil futures contracts, thereby reducing the adverse effects of jet fuel price fluctuations. By 2025, the company will conduct jet fuel hedging transactions, holding an open position of 500,000 barrels that have not yet been delivered by the end of the year. In addition, China Eastern Airlines stated that to address the risk of jet fuel price fluctuations, the company can also implement lean management measures to save fuel through fleet upgrades, route optimization, single-engine taxiing, and aircraft weight reduction, as well as optimize capacity deployment and strengthen marketing to improve passenger load factors and unit revenue levels to cope with the pressure of rising jet fuel prices. The company will actively assess oil price trends and cautiously carry out jet fuel hedging business. After disclosing its annual report, China Southern Airlines announced that it plans to conduct jet fuel futures business of no more than 1.59 million tons in 2026.

In 2026, to cope with the ongoing intense market competition, the three major airlines will continue to focus on the recovery and expansion of international routes as an important direction to enhance profitability. Air China plans to increase the frequency of more than 10 routes, including Beijing-Warsaw, Milan, and Budapest; China Eastern Airlines' international and regional routes will have an average weekly scheduled departure of 1,400 flights, with over 160 weekly departures on European routes, a year-on-year increase of 24%. Meanwhile, China Southern Airlines opened the Beijing Daxing-Helsinki route on the first day of the new flight season, achieving a seat occupancy rate of 98%.

In the domestic market, the three major airlines are accelerating the deployment of domestically produced large aircraft. It is estimated that in the next three years, the three major airlines plan to introduce 110 C919 aircraft. By the end of 2025, China Eastern Airlines, as the world's largest operator of C919 aircraft, has operated 14 C919 planes, and plans to introduce 35 C919 aircraft from 2026 to 2028; Air China has a C919 fleet of 9 aircraft and plans to introduce 35 aircraft in the next three years; China Southern Airlines has a C919 fleet of 8 aircraft and plans to introduce 40 aircraft in the next three years. Notably, Air China also disclosed in its annual report that it participated in the research and development of the C929 wide-body aircraft.

The Civil Aviation Administration previously predicted that in 2026, the national civil aviation will coordinate both domestic and international markets, expecting to complete a total transportation turnover of 175 billion ton-kilometers, a passenger transport volume of 810 million people, and a cargo and mail transport volume of 10.7 million tons. For the three major airlines, which are still teetering on the edge of profit and loss, whether they can continue to reduce losses or achieve profitability in 2026 will depend on the recovery progress of international routes, cost control capabilities, and the comprehensive game of ticket price levels.

New Beijing News Beike Finance Reporter Wang Zhenzhen

Editor Yue Caizhou

Proofreader Yang Xuli

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