The Big Three Airlines' 2025 Financial Reports Wrap Up: Who's Laughing, Who's Crying?

March 31, China Eastern and China Southern’s 2025 financial reports were released one after another, and by then all three of the “big three” airlines’ financial reports had been collected. The thread of industry recovery is becoming increasingly clear: some airlines were first to cross the line to achieve profitability, while others steadily reduced losses and edged closer to turning profitable, delivering a mixed yet hopeful set of results.

Among them, China Southern led the way by breaking the profitability deadlock since 2020 with an 857M yuan net profit margin, becoming the first company among the three to achieve annual turnaround profitability, but even amid the cheers there are still hidden concerns; although China Eastern and Air China have not completely escaped losses, the scale of their performance improvement is significant, and the effectiveness of loss reduction has gradually begun to show.

Of particular note is that revenue for all three airlines grew year over year: Air China’s operating revenue rose 2.87% year over year, China Eastern’s operating revenue rose 5.92%, and China Southern’s operating revenue rose 4.61%. A strong rebound in international markets has become the core engine driving performance, and behind this recovery are not only precise boosts in route planning, but also ongoing deep cultivation in cost reduction and efficiency improvement.

International routes become the core growth engine

In 2025, revenue for all three airlines grew year over year, underlying business fundamentals continued to recover steadily, and the restoration of international routes became a key lever for driving performance.

China Southern not only turned around its attributable net profit, its non-recurring profit (after deducting non-recurring items) also reached 1.45 billion yuan, achieving “both turnarounds”; China Eastern’s attributable net loss was 145M yuan, reducing losses by 274M yuan compared with the previous year, with the total profit for the period at 2.74 billion yuan, turning around year over year; Air China’s attributable net loss was 1.77B yuan, but its operating cash flow performance was impressive. Its net cash flow from operating activities for the full year reached 42.05B yuan, up 21.71% year over year. Moreover, in the third quarter of 2025, all three airlines achieved collective quarterly profitability, laying a foundation for full-year recovery.

However, it needs to be pointed out that China Southern’s “both turnarounds” have a bit of “water content.” The China Southern Logistics segment—originally slated for a listing last year—was withdrawn from its IPO due to unfavorable market conditions, and therefore it remains within the China Southern Group, contributing net profit of 3.58B yuan.

Fortunately, the explosive growth of international routes has become the core driving force behind performance recovery across airlines. In 2025, a full-fledged rebound in international travel demand provided core support for growth in international routes. Data from the Ministry of Commerce shows that in 2025, the export scale of China’s travel services reached 393.98 billion yuan, up 49.5% year over year, becoming the fastest-growing segment within service exports. This includes consumption-based travel such as personal tourism, studying abroad, and medical treatment, and also covers all kinds of business travel, driving an improvement in international passenger demand from every angle. At the same time, China has continuously introduced measures such as visa facilitation and internationalization of payments, optimizing the environment for international consumption and further stimulating the potential for inbound consumption—making “China Travel” a new trend among overseas visitors, forming a two-way demand boost for both outbound and inbound travel.

From the actual operating data of the three airlines, the results of demand recovery are especially evident. China Eastern’s international transport turnover saw the largest year-over-year increase, reaching 19.77%, with international revenue surging significantly. China Southern’s input of international passenger capacity (measured by available seat-kilometers) grew 18.46% year over year; its international passenger turnover (measured by revenue passenger-kilometers) grew 19.57% year over year; and its international passenger load factor rose by 0.78 percentage points year over year. Air China’s international passenger revenue grew 14.13% year over year, while its international capacity input grew 4.8% year over year.

In terms of operating efficiency, the restoration of international routes is a win-win for airlines: it not only improves the utilization rate of widebody aircraft, but also reduces the deployment of capacity in the domestic market, easing competitive pressure. The recovery of international routes effectively reactivated airlines’ idle widebody aircraft assets, significantly improving operating efficiency and addressing the pain point of asset idleness.

Meanwhile, competition in the domestic civil aviation market is fierce and ticket prices are under pressure, forcing airlines to shift toward international markets to find new growth space. International routes, with relatively stable revenue levels, have become a key factor in easing domestic competitive pressure. Price wars in the domestic market have put pressure on airlines’ revenue levels, but on international routes—especially long-haul routes—average revenue per customer is comparatively stable and demand elasticity is relatively small, allowing them to effectively make up for the revenue shortfall in the domestic market. The three airlines’ route plans also confirm this logic: for example, during the 2026 spring festival travel period, China Southern added multiple international hot routes such as Zhengzhou to Bangkok, Hanoi, and Singapore.

As the Ministry of Commerce, together with relevant departments, issued the policy measures “to promote the export of travel services and expand inbound consumption,” focusing on various inbound scenarios, improving inbound facilitation services, and providing broad space for the three airlines to develop routes to countries along the route network. All three airlines intend to launch and increase the frequency of international routes in 2026 to consolidate growth. China Eastern stated clearly that in 2026 it will optimize domestic market layout, expand into international and emerging markets, optimize capacity allocation, improve aircraft utilization, deepen industrial coordination, and establish a dynamic cost control system.

Swap price for volume: pressure from both competition and costs

Air China’s financial report shows that in 2025, while the passenger load factor in its passenger business increased, the revenue level still declined. Its full-year passenger load factor rose to 81.88%, and passenger volume exceeded 160 million people, but passenger revenue per unit deteriorated in parallel. Revenue per passenger-kilometer fell from 0.5338 yuan to 0.5144 yuan, a decline of 3.6%. Overall, the company’s operating profit for the full year narrowed losses from -3.43B yuan in 2024 to -2.05B yuan. China Eastern saw a similar “more volume, lower price” contrast in the same period: in 2025, its revenue per passenger-kilometer was 0.493 yuan per passenger-kilometer, down 3.71% year over year from 0.512 yuan per passenger-kilometer in 2024. China Southern’s revenue per passenger-kilometer also edged down slightly—from 0.48 yuan per passenger-kilometer in 2024 to 0.46 yuan per passenger-kilometer—confirming the impact of domestic civil aviation “price wars” on traditional airlines’ revenues. This performance among the three airlines is not an isolated case, but rather an inevitable outcome under industry competition conditions.

On one hand, domestic airlines have been stepping up capacity deployment, especially on popular domestic routes (such as Beijing–Shanghai, Beijing–Guangzhou, etc.), where homogeneous competition is severe and price wars have become the norm. To prevent the passenger load factor from falling, the three airlines had no choice but to cut ticket prices and increase the deployment of discounted cabin seats. Even if passenger load factors increased, unit passenger revenue still fell accordingly. On the other hand, low-cost airlines continue to expand, further squeezing the pricing space of traditional airlines. In some mid- and short-haul routes, airlines such as China Eastern and Air China were forced to follow price cuts, leaving passenger revenue efficiency under continued pressure.

Although the recovery of international routes directly boosted overall passenger load factors, at the same time, the revenue efficiency of international routes was significantly lower than that of domestic routes, so overall passenger revenue performance is not encouraging.

Another point worth mentioning is that the performance of the three airlines has often been dragged down by their subsidiaries. For Air China, besides the profits from its equity investments in Cathay Pacific, Ameco, and AVIC Finance, other subsidiaries and equity-invested companies are all loss-making, and the losses are substantial. Shenzhen Airlines lost 1.24B yuan last year, Shandong Airlines Group lost 0.78 billion yuan, and Macau Airlines also lost 655M yuan. Among China Southern’s equity-invested companies, the largest loss came from China Southern’s unit Jichang? (Chuanhang), with a net loss of 1.64B yuan. Compared with the above, China Eastern’s equity-invested companies performed slightly better: China Eastern Jiangsu’s largest loss was 791M yuan; China United Airlines? (Zhonglian) lost 358M yuan; China Eastern Wuhan lost 105M yuan. The other four equity-invested companies were profitable, including Shanghai Airlines, which had often been loss-making previously.

The three airlines’ operating performance improved materially, largely benefiting from the overall decline in jet fuel prices in 2025. Air China’s aviation fuel costs decreased by 3.68B yuan year over year, and it achieved net foreign exchange gains of 328M yuan. China Southern’s aviation fuel costs decreased by 2.46B yuan year over year, while China Eastern’s decreased by 1.74B yuan.

However, the turmoil in the Middle East at the start of 2026 and the closure of the Strait of Hormuz caused aviation fuel costs to surge. Therefore, China Eastern, Air China, and China Southern’s revenue management in 2026 will undoubtedly face significant challenges.

(Author: Gao Jianghong; Intern: Zhang Heyun; Editor: Gao Mengyang)

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