21st Century Business Herald reporter Gao Jianghong, intern Zhang Heyun
On March 31, China Eastern Airlines and China Southern Airlines released their 2025 financial reports, completing the financial disclosures of the three major airlines. The recovery trajectory of the industry has become increasingly clear, with some airlines achieving profitability ahead of others, while some companies are steadily reducing losses and approaching profitability, presenting a mixed yet hopeful report card.
Among them, China Southern Airlines broke the profitability deadlock since 2020 with a net profit of 857 million yuan, becoming the first company among the three major airlines to achieve an annual turnaround, although there are still hidden worries amidst the joy; China Eastern Airlines and Air China have not completely eliminated losses, but the improvement in performance is significant, and the effects of loss reduction are gradually becoming apparent.
It is noteworthy that all three major airlines achieved year-on-year revenue growth: Air China's operating revenue increased by 2.87% year-on-year, China Eastern Airlines' operating revenue increased by 5.92% year-on-year, and China Southern Airlines' operating revenue increased by 4.61% year-on-year. The strong recovery of the international market has become the core engine driving performance, and behind this recovery are not only precise efforts in route layout but also continuous deepening of cost reduction and efficiency enhancement.
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<h4>International Routes as the Core Growth Engine</h4>
In 2025, all three major airlines achieved year-on-year revenue growth, and the operating fundamentals are steadily recovering, with the restoration of international routes becoming a key driver of performance.
China Southern Airlines not only achieved a turnaround in net profit attributable to the parent company but also reached a net profit of 145 million yuan after excluding non-recurring gains and losses, achieving a &#34;double turnaround&#34;; China Eastern Airlines reported a net loss attributable to the parent company of 1.633 billion yuan, a reduction of 2.593 billion yuan from the previous year, with a total profit of 274 million yuan for the period, achieving a year-on-year turnaround; Air China reported a net loss attributable to the parent company of 1.77 billion yuan, but its operating cash flow performed well, with a net cash flow from operating activities of 42.045 billion yuan for the year, a year-on-year increase of 21.71%, and in the third quarter of 2025, all three major airlines achieved collective profitability in a single quarter, laying the foundation for annual recovery.
However, it should be pointed out that the &#34;double turnaround&#34; of China Southern Airlines has some &#34;water content&#34;; the subsidiary that contributed the most to its profits, China Southern Logistics, was originally scheduled to go public last year but withdrew its IPO due to poor market conditions, thus remaining within the China Southern Group and contributing a net profit of 3.575 billion yuan.
Fortunately, the explosive growth of international routes has become the core driving force for the performance recovery of various airlines. The comprehensive recovery of international travel demand in 2025 provides core support for the growth of international routes. According to data from the Ministry of Commerce, the scale of China's travel service exports reached 393.98 billion yuan in 2025, a year-on-year increase of 49.5%, making it the fastest-growing sector in service exports, which includes consumer travel such as personal tourism, studying abroad, and medical treatment, as well as various business trips, comprehensively driving the increase in international passenger demand. Meanwhile, China continues to introduce measures such as visa facilitation and international payment optimization to enhance the international consumption environment, further stimulating inbound consumption potential, making &#34;China Travel&#34; a new trend for overseas tourists, forming a dual demand pull of &#34;outbound + inbound.&#34;
From the actual operating data of the three major airlines, the effectiveness of demand recovery is particularly evident. China Eastern Airlines has the largest year-on-year increase in international transport turnover, reaching 19.77%, with a significant growth in international revenue. China Southern Airlines' international passenger capacity (measured in available seat kilometers) increased by 18.46% year-on-year, while international passenger turnover (measured in revenue passenger kilometers) grew by 19.57%, and the passenger load factor on international routes increased by 0.78 percentage points year-on-year. Air China's international passenger revenue increased by 14.13% year-on-year, and international capacity input grew by 4.8%.
In terms of operational efficiency, the recovery of international routes is a double benefit for airlines, as it not only enhances the utilization of wide-body aircraft but also reduces capacity deployment in the domestic market, alleviating competitive pressure. The recovery of international routes effectively revitalizes the idle wide-body aircraft assets of airlines, significantly improving operational efficiency and addressing the issue of asset idleness.
At the same time, the domestic civil aviation market is highly competitive, and ticket prices are under pressure, forcing airlines to turn to the international market to seek new growth opportunities. The relatively stable revenue levels of international routes have become key to alleviating domestic competitive pressure. The price war in the domestic market has led to pressure on airlines' revenue levels, while international routes, especially long-haul routes, have relatively stable unit prices and lower demand elasticity, effectively compensating for the revenue shortfall in the domestic market. The layout of the three major airlines also confirms this logic, as China Southern Airlines plans to increase several international hot routes such as Zhengzhou to Bangkok, Hanoi, and Singapore during the 2026 Spring Festival travel season.
With the Ministry of Commerce and relevant departments issuing the &#34;Policy Measures to Promote Travel Service Exports and Expand Inbound Consumption,&#34; focusing on various inbound scenarios and improving inbound facilitation services, there is broad space for the three major airlines to expand routes to countries along the lines. All three major airlines intend to open and increase international routes in 2026 to consolidate growth. China Eastern Airlines has made it clear that in 2026, it will optimize its domestic market layout, expand international and emerging markets, optimize capacity allocation, enhance aircraft utilization, deepen industrial collaboration, and establish a dynamic cost control system.
<h4>Exchanging price for volume, dual pressure of competition and costs</h4>
Air China's financial report shows that while the passenger load factor for the passenger transport business improved in 2025, revenue levels are still declining. Its annual passenger load factor increased to 81.88%, with the number of transported passengers exceeding 160 million, but passenger transport revenue levels simultaneously declined, with revenue per passenger kilometer dropping from 0.5338 yuan to 0.5144 yuan, a decrease of 3.6%. Overall, the company's annual operating profit improved from a loss of 3.43 billion yuan in 2024 to a loss of 2.05 billion yuan. China Eastern Airlines also experienced this contrast of &#34;increased volume and decreased price&#34; during the same period, with passenger revenue per kilometer in 2025 being 0.493 yuan per passenger kilometer, down 3.71% from 0.512 yuan per passenger kilometer in 2024. China Southern Airlines' revenue per passenger kilometer also slightly decreased from 0.48 yuan per passenger kilometer in 2024 to 0.46 yuan per passenger kilometer, confirming the impact of the domestic civil aviation market's &#34;price war&#34; on traditional airlines' revenues. The performance of the three major airlines is not an isolated case but an inevitable result of the competitive environment in the industry.
On one hand, domestic airlines are increasing capacity deployment, especially on popular domestic routes (such as Beijing-Shanghai, Beijing-Guangzhou, etc.), where homogenized competition is severe, and price wars have become the norm. To avoid a decline in load factor, the three major airlines have no choice but to lower ticket prices and increase discounted fare classes. Even if the load factor improves, the unit revenue per passenger also declines accordingly;
On the other hand, low-cost airlines continue to expand, further squeezing the pricing space of traditional airlines. Airlines such as China Eastern Airlines and Air China are forced to follow suit and lower prices on some medium and short-haul routes, leading to continued pressure on passenger revenue efficiency.
Although the recovery of international routes has directly driven an overall increase in passenger load factor, the revenue efficiency of international routes is significantly lower than that of domestic routes, resulting in an overall unimpressive level of passenger revenue.
It is also worth mentioning that the performance of the three major airlines is largely dragged down by their subsidiaries. Apart from the profitable stakes in Cathay Pacific, Ameco, and China Aviation Finance, Air China’s other subsidiaries and affiliated companies are all in the red, and the losses are substantial. Shenzhen Airlines lost 1.244 billion yuan last year, Shandong Airlines Group lost 780 million yuan, and Macau Airlines also lost 655 million yuan. Among China Southern Airlines' affiliated companies, Sichuan Airlines had the largest loss, with a net loss of 1.644 billion yuan. The performance of China Eastern Airlines' affiliated companies is slightly better in comparison, with China Eastern Jiangsu having the largest loss of 791 million yuan, China United Airlines losing 358 million yuan, and China Eastern Wuhan losing 105 million yuan, while the other four affiliated companies were profitable, including Shanghai Airlines, which had previously often reported losses.
The substantial improvement in the operating performance of the three major airlines is largely attributed to the overall decline in aviation fuel prices in 2025, with Air China’s aviation fuel costs decreasing by 3.679 billion yuan year-on-year and net foreign exchange gains reaching 328 million yuan. China Southern Airlines' aviation fuel costs decreased by 2.463 billion yuan year-on-year, while China Eastern Airlines saw a reduction of 1.739 billion yuan.
However, the chaotic situation in the Middle East at the beginning of 2026 and the closure of the Strait of Hormuz have led to a surge in aviation fuel costs, making revenue management for the three major airlines in 2026 undoubtedly challenging

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In 2025, the financial reports of the three major airlines (China Eastern Airlines, China Southern Airlines, and Air China) were released. China Southern Airlines turned a profit with a net profit of 857 million yuan, becoming the first airline to achieve annual profitability. Although China Eastern Airlines and Air China have not completely eliminated losses, their performance has significantly improved, with revenue showing year-on-year growth. The recovery of the international market has become the core driving force for performance growth, and the operational fundamentals of the three major airlines are steadily recovering, with the restoration of international routes being a key focus

腾讯新闻 - 财经

CS AVIATION ETF

China Southern CNI Transportation Industry ETF

ChinaAMC CSI All Share Transportation ETF

AIR CHINA

CHINA SOUTH AIR

CHINA EAST AIR

Air China

The three major airlines' 2025 financial report concludes: Who smiled, and who cried?