China's Three Largest Airlines Project Full-Year 2026 Losses
Air China, China Eastern, and China Southern project annual losses for 2026 due to surging fuel costs and weak domestic demand.
China's three largest carriers—Air China, China Eastern Airlines, and China Southern Airlines—are projected to post full-year losses for 2026. The downturn follows a sharp decline in third-quarter results, a period that typically serves as the industry's most profitable window.
Financial losses are primarily driven by a doubling of jet fuel prices following military campaigns by the United States and Israel against Iran in February. These costs are compounded by weak domestic fares, disruptions from typhoons, and continued competition from high-speed rail. The carriers remain particularly vulnerable to oil price volatility because they employ limited fuel hedging compared to their international competitors.
Air China and China Eastern are facing their seventh consecutive annual net loss since the COVID-19 pandemic. Air China reported a 92.6% drop in third-quarter net profit, while China Eastern saw its third-quarter net profit fall 98.2%. China Southern Airlines, which saw a brief recovery in 2025, swung to a third-quarter net loss of 609 million yuan and is expected to return to annual losses.
