Post by : Rameen Ariff

China’s three largest airlines—Air China, China Eastern, and China Southern—reported their first collective quarterly profit in a year during the third quarter, buoyed by strong summer travel demand. However, analysts warn the recovery may be temporary, as oversupply continues to weigh on the domestic aviation market.

Flag carrier Air China announced a third-quarter net profit of 4.14 billion yuan ($581.22 million), marking a 5.16% decline from the same period last year. The airline also revealed plans for an A-share private placement to raise up to 20 billion yuan to repay debts and bolster capital reserves.

China Eastern, the launch customer for the domestically manufactured C919 narrow-body jet, returned to profitability with 3.53 billion yuan, compared with 2.63 billion yuan in the prior year, following three consecutive quarters of losses. Meanwhile, China Southern reported a Q3 profit of 3.84 billion yuan, up from 3.19 billion yuan a year ago.

The three carriers have faced annual losses since the onset of the COVID-19 pandemic, but the summer peak has sparked hopes for a full-year profit in 2025. Still, the recovery lags behind international peers due to slower Chinese economic growth and stiff domestic competition from both rival airlines and the country’s high-speed rail network, which continues to pressure fares.

During the recent week-long National Day holiday, average one-way fares rose 10% year-on-year to 910 yuan, according to VariFlight. However, fares and flight frequencies have since declined with the onset of the low season, dropping 12% compared to the previous month.

International flight capacity has recovered to approximately 85% of 2019 levels, but services to North America remain under one-third of pre-pandemic volumes due to ongoing China-U.S. tensions.

Industry experts caution that while China’s airlines have made encouraging progress, domestic oversupply and low-season pressures may temper growth, suggesting that the recent profitability surge could be fleeting.

#world news #Global News