Business
Top Chinese airlines’ profits fall as flagging economy pressures fares
Published by Jessica Weisman-Pitts
Posted on October 30, 2024
3 min readLast updated: January 29, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on October 30, 2024
3 min readLast updated: January 29, 2026
By Lisa Barrington and Sophie Yu
SEOUL/BEIJING (Reuters) – China’s top three state-owned airlines reported profit declines in the third quarter despite record summer passenger numbers and fuller planes than last year, as a slowdown in domestic economic growth pushes flyers to seek cheaper fares.
Beijing-headquartered Air China on Wednesday reported a net profit of 4.14 billion yuan ($581.34 million) in the quarter, down from 4.24 billion yuan a year earlier.
China Eastern Airlines on the same day posted a net profit of 2.63 billion yuan, down 28.2% year on year.
The country’s largest airline China Southern said on Monday there was “strong demand in the aviation market” but reported a 23.9% year-on-year drop in third-quarter net profit to 3.19 billion yuan.
China Southern added 11% more capacity to its operations over the quarter compared to the year before and planes were on average fuller than last summer, airline data shows. However, operating revenues for the quarter rose just 4.6%, indicating a decline in ticket prices.
Airlines globally have been seeing stable demand but overcapacity and sluggish yields as a post-pandemic travel boom abates and most planes are back in the skies. China has been slower than the rest of the world to return capacity to the market due to a later lifting of pandemic travel restrictions in early 2023. Domestic capacity is higher than in 2019, but international flights have been particularly slow to ramp back up.
The significant lag between increased capacity and bottom-line growth indicates that conditions are more austere (in China) than the slowdown experienced elsewhere,” said a recent note from Ishka, an aviation data and advisory business.
Chinese customers are curbing spending as a property crisis drags on and youth unemployment stays high, despite Beijing’s efforts to boost growth through economic stimulus packages.
China’s economic slowdown does not spare airlines, even if they have leveraged the continuing return of post Covid capacity to at least pull back from the unsustainable losses endured during Covid affected years,” Ishka wrote.
In July and August, the average domestic airfare in China was 17% lower than last year and 1% below 2019 levels, China-based aviation data firm FlightMaster said.
International fares were 25% lower than last summer and 12% lower than in 2019, FlightMaster said.
Another aviation data firm, ForwardKeys, said outbound airfares from China between January and September were 39% lower year-on-year.
The big three airlines saw their first quarterly profits since 2019 in the busy summer months of last year’s third quarter but fell back into losses in the subsequent winter low season that starts this week in terms of flight schedules.
China’s aviation regulator said in September that during July and August passenger numbers were 12% higher than the same period last year, and 18% higher than pre-COVID levels.
China’s largest low-cost carrier, privately owned Spring Airlines, returned to profit earlier than full-service rivals China Southern, China Eastern and Air China after the pandemic.
On Wednesday, Spring reported a 32.4% year-on-year decline in net profit to 1.2 billion yuan.
($1 = 7.1215 Chinese yuan renminbi)
(Reporting by Sophie Yu in Beijing and Lisa Barrington in Seoul; Editing by Jamie Freed and Mark Potter)
Operating revenues are the income generated from a company's core business operations, excluding any income from investments or sales of assets.
Economic growth refers to the increase in the production of goods and services in an economy over a period of time, typically measured by the rise in Gross Domestic Product (GDP).
Consumer perception is the way consumers view and interpret a brand, product, or service based on their experiences, beliefs, and feelings, which can influence their purchasing decisions.
Capacity in the airline industry refers to the maximum number of passengers or cargo that an airline can transport, often measured in available seat kilometers (ASK) or ton kilometers (TK).
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