Air China, China Eastern Airlines and China Southern Airlines reported a combined net loss of about 8.2 billion yuan ($1.22 billion) in the first half of 2026, Reuters reported on 31 August from Hong Kong and Beijing. It is the seventh straight year the three state carriers have posted a first-half loss. In July they had warned the combined shortfall could reach as much as 9 billion yuan. Aviation Week the same day said the three carriers confirmed earlier earnings guidance and that higher fuel costs outran other line items.
Air China booked a 2.3 billion yuan net loss, versus 1.81 billion a year earlier. China Eastern lost 2.2 billion yuan, up from 1.43 billion in the first half of 2025. China Southern reported a 3.7 billion yuan loss, compared with 1.53 billion a year earlier. That reversed a first-quarter combined profit of 4.82 billion yuan, supported by Lunar New Year demand. Reuters said the carriers’ shares fell on Monday in mainland China and Hong Kong. FlightGlobal’s 31 August headline described a “severe” fuel crisis pushing the Big Three back into the red.
China Eastern said the profit environment had been “severely undermined” by disrupted international routes and high jet-fuel prices tied to conflict in the Middle East. Fuel costs rose 35 to 38 percent at all three airlines in the first half. Chinese carriers hedge only a small share of fuel purchases, unlike many Asian and European rivals. China Southern’s 28 August Hong Kong exchange interim report said there is currently “no effective means” to manage domestic jet-fuel price moves; FlightGlobal’s headline carried the same warning. Under IFRS, Southern’s fuel bill was 34.886 billion yuan, up from 25.334 billion, while operating revenue rose 9.72 percent to 94.679 billion yuan.
Revenue was still stronger on international demand: Air China up 10.5 percent, China Eastern 11.1 percent and China Southern 9.7 percent. Reuters said Europe routes were especially busy as some passengers avoided Middle East hubs because of the Iran war. Weak domestic demand and competition from high-speed rail and holiday road travel made it hard to push U.S.-style domestic fare increases without losing traffic. Jet fuel has come off its second-quarter peak but remains more than 50 percent above pre-war levels.
The third quarter is usually the most profitable period for Chinese carriers. Reuters wrote that an unusually strong typhoon season disrupted domestic flying at the summer peak: 21 typhoons had formed so far this year in the Northwest Pacific and South China Sea, nine above the historical average for the same stretch. Aviation data firm Flight Master forecast July–August passengers would fall 3.6 percent to 142 million, which would be the first peak-season drop since the 2022 lockdowns.
Despite the losses, the three carriers kept adding COMAC C919 narrowbodies. China Eastern took three deliveries in the first half and reached 17 C919s. Air China and China Southern each operated 11, after two and three deliveries in the period. China Southern’s 28 August HKEX fleet table confirms 11 C919s at period-end, three deliveries, zero retirements and an average C919 age of 0.9 years. China Eastern said it now expects 13 fewer C919 deliveries in 2026–2028 than previously planned. Air China kept its prior forecast; China Southern did not give a new one in the interim report.
HSBC analysts expect the three carriers to lose about 16.8 billion yuan in full-year 2026, against a market consensus of 1.3 billion yuan in profit. Their Shanghai-listed shares have fallen at least 36 percent in 2026, and none declared an interim dividend. China Southern’s interim report also recorded no profit distribution for the 2026 half-year.
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