The performance of the three major airlines in 2025 shows divergence: China Southern Airlines turned a profit with a net income of 857 million yuan, why didn't China Eastern and Air China keep up?

Each Daily Reporter｜Shu Dongni Intern Chen Siqing Each Daily Editor｜Bi Luming

Recently, China Air (SH601111, stock price 7.04 yuan, market cap 1228 billion yuan), China Eastern Airlines (SH600115, stock price 4.54 yuan, market cap 1003 billion yuan), and China Southern Airlines (SH600029, stock price 5.93 yuan, market cap 1075 billion yuan) have successively released their 2025 annual reports. Overall, the aviation industry continues to maintain a recovery trend. The three airlines all recorded year-on-year growth in operating revenue, and their operating scale has basically recovered to the level of 2019.

But on the profit side, the three airlines show a clear divergence: China Southern Airlines was the first to swing to a profit, which is also China Southern’s first full-year swing to profit since 2020, while China Air and China Eastern are still in the red.

In 2025, the operating revenues of China Air, China Eastern, and China Southern were 171.5 billion yuan, 139.9 billion yuan, and 182.3 billion yuan, respectively—each already exceeding the level of the same period in 2019.

But on the profit side, none of the three airlines has recovered to the profit level of 2019, and their performances differ greatly. In 2025, the net profit attributable to shareholders of China Air, China Eastern, and China Southern were -1.77 billion yuan, -1.633 billion yuan, and 0.857 billion yuan, respectively. China Southern was the first to achieve profitability, but China Air and China Eastern are still loss-making.

The financial reports show that China Southern’s key to being the first to turn profitable lies in the strong support from its logistics segment—its controlling subsidiary China Southern Airlines Logistics contributed net profit of 3.575 billion yuan for the full year, bringing about 1.966 billion yuan in benefits to the listed company, becoming the key driver behind the turnaround; together with the relatively fast growth in profits from aircraft repair and maintenance businesses, this helped China Southern achieve profitability first amid overall industry headwinds.

China Air and China Eastern also once had cargo business segments, but they have both now been spun off from their listed companies and listed separately. China Eastern Logistics was listed on the Shanghai Stock Exchange’s main board in 2021, and Sinocargo Airlines was listed on the Shenzhen Stock Exchange in December 2024. Li Xiaojin, Director of the Aviation Economics and Development Research Institute (AIR) at the Civil Aviation University of China, believes that the profitability gap between China Southern and the other two airlines is mainly affected by the cargo business and aircraft maintenance and repair business. If only the overall passenger business is considered, China Southern’s performance may be weaker than China Air and China Eastern.

Looking at the financial reports as a whole, one of the common characteristics of the three airlines in 2025 is that international routes all achieved relatively rapid growth. In terms of passenger numbers on international routes, the growth rates for the three airlines are all in double digits, and the growth pace is far higher than that of domestic routes.

The relevant 2025 annual reports show that the restoration of routes in the Asia region is particularly prominent, becoming one of the main sources of growth for international routes. During the reporting period, all three airlines continued to promote optimization of their route networks, adding or restoring multiple international routes, and focusing on Asia and certain international markets. For example, China Air newly opened and resumed 12 international routes in 2025.

In 2025, the number of China’s unilateral visa-free countries increased to 48, and the number of mutually visa-free countries expanded to 29. The number of entries and exits reached 697 million person-times, up 14.2% year on year, hitting a historic high. Against this backdrop, the recovery of the three airlines’ international routes accelerated noticeably, directly echoing the improvement in the environment for inbound and outbound tourism.

However, at the industry level as a whole, the current level of international passenger air transport has not actually fully recovered to the 2019 level. According to data from the Civil Aviation Administration of China, in 2019, China’s international routes completed passenger throughput of 139.355 million person-times, while in 2025 it was 117.796 million person-times, indicating that there is still ample room for further growth.

Li Xiaojin analyzed to reporters that the main reasons are that non-civil-aviation factors lead to a lower recovery rate on North America routes, and that this is compounded by the suspension of some routes in the Middle East. As a result, large numbers of wide-body aircraft have been forced to be deployed on domestic and nearby international routes. Meanwhile, the high-speed rail network is becoming increasingly dense and competition is intense, which has also pushed the civil aviation industry into a dilemma of “busy schedules but not strong profits.”

From the perspective of total passenger transportation volume, in 2025 all three airlines have exceeded the level of the same period in 2019, and the recovery in volume has basically been completed. But what truly constrains profits is the level of revenue—ticket prices have not yet returned to the 2019 level, and the “more revenue but not more profit” dilemma has not been fundamentally resolved. In Li Xiaojin’s view, the passenger business has not been fully repaired, which may be the core challenge faced by all three airlines.

Cover image source: Liu Guomei

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