China’s three largest operators were loss-making for the first quarter of the year, as competitive ‘pressures’ and the uncertainty surrounding an ongoing trade war with the USA weighed on revenue growth.
While the ‘Big Three’ – comprising Air China, China Eastern Airlines and China Southern Airlines – were able to keep cost increases under control, they saw little revenue growth for the three months ended 31 March.
The country’s largest operator China Southern even reported a revenue decrease for the quarter, swinging to an operating loss of CNY69 million ($9.5 million). By comparison, the Guangzhou-based carrier reported a CNY1.5 billion operating profit in the same period in 2024.
China Southern was the only carrier among the ‘Big Three’ to offer some explanation for the poorer performance, attributing it to “multiple factors”, including “competitive pressures” and “shifts” in travel patterns. It also blamed supply chain constraints and the depreciation of the Chinese yuan.
Air China plunged further in the red, posting an operating loss of CNY2.5 billion, compared to a CNY1.9 billion loss in the year-ago period.
Its revenue for the quarter held steady at CNY40 billion, but the Star Alliance carrier saw a 1.9% rise in operating costs, to CNY44.4 billion.
Similarly, China Eastern reported a 0.7% rise in revenues to CNY33.4 billion, which was outpaced by a 2.7% increase in operating costs to CNY36.4 billion.
Consequently, the SkyTeam operator widened its first-quarter loss to CNY1.2 billion.
In the respective results, the ‘Big Three’ made no explicit mention of the ongoing trade war between China and the USA. The Trump administration’s tariff policies have led to market uncertainty, and airlines around the world have warned of the likely near-term impact.
On 29 April, China’s commerce ministry issued a statement acknowledging that the Chinese airline sector and Boeing “have suffered greatly” in light of the tariffs imposed by the USA.
The statement, which is the first time Beijing has outlined the impact of the USA’s tariff policies, comes as several Boeing customers in China said they would not take delivery of new aircraft due to the tariffs.
