China’s airlines entered the final quarter of 2026 with revenue growth and bottom-line losses running in opposite directions. In the first nine months of the year, the country’s three largest state-controlled carriers — Air China, China Eastern Airlines and China Southern Airlines — posted a combined attributable net loss of about RMB 8.435 billion, a swing from profit in the same period of 2025, even as each carrier grew its top line by high single digits, according to their quarterly reports published between October 29 and October 31. The common culprit, cited by all three carriers in their filings, was an unprecedented fuel shock: jet-kerosene ex-factory prices at Chinese refineries climbed from roughly RMB 5,450 per tonne over January–February to RMB 8,946 per tonne on October 1, after Middle East conflict pushed crude oil sharply higher. Globally, the International Air Transport Association (IATA) halved its 2026 industry profit forecast in June, projecting net profit of USD 23.0 billion — down from USD 41 billion previously and from USD 45 billion in 2025 — alongside an average jet-fuel price of USD 152 per barrel, nearly 70% above 2025, and a record-high refining crack spread of USD 57 per barrel. Against that backdrop, Chinese carriers leaned into international expansion while domestic fares stayed soft through the summer peak, regulators intensified their anti-“involution” campaign, and a steadily appreciating renminbi emerged as one of the few relief items on carriers’ balance sheets. This analysis reviews the performance of China’s main passenger airlines in 2026, based on company interim reports released in late August, quarterly reports released in late October, and CAAC and IATA industry data; all figures are current as of November 3, 2026.
Industry performance: traffic up, profits down
China’s civil aviation regulator set an ambitious 2026 work plan at the national civil aviation work conference on January 6, targeting 175 billion tonne-kilometres of total turnover, 810 million passenger trips and 10.7 million tonnes of cargo and mail. The targets follow a 2025 in which the industry handled 770 million passengers, posted a modest aggregate profit of RMB 6.5 billion, and became the world’s largest aviation market by population.
Interim data released by the CAAC at its mid-year work conference on July 15 show traffic growth but near-flat demand. In the first half of 2026, the industry completed 83.37 billion tonne-kilometres of total turnover (+6.4% year on year), carried 380 million passengers (+1.0%) and moved 5.073 million tonnes of cargo and mail (+6.0%). The scheduled flight load factor reached 85.7%, up 1.6 percentage points, while seat-kilometre revenue rose 7.7% and the flight completion rate stood at 93.5%. The half-year tally also covered 7.146 million block hours flown over 2.683 million flights, with an overall load factor of 74.0% (up 1.4 points). The demand picture softened mid-year, however: Ministry of Transport statistics show June passenger traffic fell 6.5% year on year and June passenger-kilometres fell 3.3%, even as capacity continued to expand.
Through the first three quarters, industry total turnover reached about 129.83 billion tonne-kilometres (+6.4%), with international routes growing 12.7% — the clearest growth engine in the network. Traffic at the three state carriers tracked closely: Air China carried 123 million passengers in the nine months (+4.8%), China Eastern 114 million (+0.96%) and China Southern 132 million (+0.89%), according to aggregations of the carriers’ operating-data announcements.
The global backdrop was bleaker. In its June 2026 Global Outlook for Air Transport, released in Rio de Janeiro on June 7, IATA projected a global airline net profit of USD 23.0 billion for 2026, a net margin of just 2.0% (against 4.2% in 2025 and a 3.9% forecast made as recently as February), operating profit of USD 48.0 billion and industry revenue of USD 1.165 trillion (+9.4%). Global passengers are expected to reach 5.1 billion (+2.4%) at a record-high load factor of 84.0%, but the fuel bill is forecast at USD 350 billion, about 40% above 2025, lifting fuel’s share of operating expenses to 31.4% from 25.4%. Passenger yield is expected to rise about 7%, yet underlying RPK demand growth is only 2.1%. For the Asia-Pacific region, IATA projected net profit of USD 6.6 billion, down from USD 9.8 billion in 2025, with RPK growth of 5.1% and ASK growth of 3.6%; the Middle East region is projected to lose USD 4.3 billion. IATA noted that only about one-third of global fuel consumption is hedged. Per-passenger profit is expected to fall to USD 4.50 from USD 9.10 in 2025, the operating margin to 4.1% from 7.2%, and return on invested capital to 4.3% — below the industry’s weighted average cost of capital of 8.5%. Europe and North America are projected to earn USD 9.6 billion and USD 9.4 billion respectively, the two most profitable regions.
The Big Three: revenue up, profits squeezed
All three state-controlled carriers published interim reports in late August and quarterly reports between October 29 and October 31. Their combined first-three-quarter attributable net loss of about RMB 8.435 billion was the headline, but the Q3 split told a story of divergence: Air China scraped out a small profit, China Eastern barely broke even, and China Southern alone posted a quarterly loss. All three attributed the deterioration to fuel.
Air China. In the first half, revenue rose 10.54% to RMB 89.268 billion, but attributable net loss deepened to RMB 2.288 billion from RMB 1.81 billion a year earlier; the ex-nonrecurring loss was RMB 2.79 billion. Operating costs reached RMB 88.886 billion, up 13.45%, nearly matching revenue — the company did not officially disclose a gross margin, and a simple calculation implies a margin of only about 0.4%. Passenger revenue was RMB 80.33 billion (+9.75%), split between international RMB 22.708 billion (+18.07%), domestic RMB 54.825 billion (+6.41%) and regional RMB 2.796 billion (+14.64%); cargo revenue grew 21.46% to RMB 4.345 billion. Capacity (ASK) rose 1.75% to 180.676 billion seat-kilometres while demand (RPK) grew 6.82% to 153.109 billion revenue passenger-kilometres, lifting the load factor to 84.74% (+4.02 percentage points; international load factor 83.71%, up 7.25 points). Passengers totalled 79.6983 million (+3.35%); cargo and mail traffic was 735,700 tonnes (+0.05%); yield was RMB 0.5247 per passenger-kilometre (+2.74%); unit cost per ASK rose 11.51% to RMB 0.4920, driven by fuel. The group operated 972 aircraft with an average age of 10.6 years (the parent company 536), introducing eight and retiring five in the half; operating cash inflow was RMB 13.667 billion (-23.36%). A RMB 650 million foreign-exchange gain helped, and finance costs fell 31.30% to RMB 1.722 billion. Strategically, Air China opened or resumed seven international routes in the half and expanded its Belt-and-Road network to 77 routes serving 32 countries; from October 26 it added a Beijing Capital–Copenhagen–Reykjavik service (three weekly flights) and plans frequency increases on more than 20 international routes including Sydney, Melbourne, Auckland and Bangkok during the winter season.
For the first nine months, Air China reported revenue of RMB 140.963 billion (+8.58%) and an attributable net loss of RMB 2.015 billion, swinging from a RMB 1.870 billion profit a year earlier. In Q3 alone, revenue was RMB 51.695 billion (+5.35%) and net profit RMB 271 million, down 92.64% year on year. The nine-month load factor climbed to 85.2% (+3.9 points), passengers reached 123 million (+4.8%), and international passengers grew 8% to 14.873 million with international capacity up 6.2% and international RPK up 14.8% — evidence that growth is being chased where the yield is.
China Eastern. The carrier reports on two bases: CAS revenue of RMB 74.234 billion (+11.09%) and IFRS total revenue of RMB 78.474 billion (+11.77%). Attributable net loss widened to RMB 2.18 billion from RMB 1.43 billion a year earlier; the ex-nonrecurring loss was RMB 3.20 billion, and IFRS net loss including minority interests was RMB 2.416 billion, a net margin of -3.1%. EBITDA was RMB 13.573 billion with a margin of 17.3%, while EBIT was RMB -417 million. Transport revenue reached RMB 73.896 billion (+10.7%), of which passenger revenue RMB 70.766 billion (+10.3%) — domestic RMB 45.420 billion (+6.1%) and international and regional RMB 25.346 billion (+18.8%) — and cargo RMB 3.130 billion (+21.5%). ASK rose 1.74% to 157.720 billion seat-kilometres and RPK 4.29% to 137.120 billion passenger-kilometres, giving the highest load factor among the Big Three at 86.94% (+2.13 points); RASK including fuel was RMB 0.449 (+8.45%) and daily aircraft utilization eased to 9.00 hours (-0.32 hours). The fuel line was stark: aircraft fuel cost RMB 29.165 billion, up 36.2%, and accounted for 36.6% of total operating costs against 30.7% a year earlier; total operating costs rose 14.2% to RMB 79.657 billion. The fleet stood at 833 aircraft (net +7 in the half), including 114 widebodies, and gearing was 87.01%. Management responses included a dedicated high-oil-price task force and “nine fuel-saving measures” that cut half-year fuel burn by 70,000 tonnes, worth about RMB 520 million. Network expansion was aggressive: 14 new, four resumed and five upgraded international routes, average stage length lengthened 4.4% to 1,845 kilometres, and Pudong transfer passengers rose 9.4% to 5.953 million. For the second half of 2026 the carrier plans to take 30 aircraft and phase out 22, including three C919s, and in 2027 to take 49 and retire 23, including six C919s.
China Eastern’s first-nine-month revenue reached RMB 117.066 billion (+10.01%) and attributable net loss RMB 2.115 billion. In Q3 the carrier posted revenue of RMB 42.832 billion (+8.18%) and a barely positive attributable net profit of RMB 64 million, down 98.19% year on year; on an ex-nonrecurring basis Q3 was still a RMB 59 million loss. International passengers grew 3.93% to 16.1056 million, international capacity 6.75% and international tonne-kilometres 11.6%. The company did not disclose a cumulative nine-month load factor in its quarterly report.
China Southern. The worst performer of the three. First-half operating revenue rose 9.72% to RMB 94.679 billion (transport revenue RMB 90.244 billion, +9.85%; cargo revenue RMB 10.773 billion, +18.65%), but attributable net loss more than doubled to RMB 3.696 billion from RMB 1.533 billion, a 141% widening; the ex-nonrecurring loss was RMB 4.710 billion and total profit swung to RMB -2.030 billion from +0.596 billion. Passenger gross margin turned negative at -2.85%, down 7.35 points, while cargo gross margin held at 31.10%. Split by region, domestic passenger revenue grew 2.49% to RMB 56.028 billion, international jumped 27.49% to RMB 22.375 billion and regional grew 25.06% to RMB 1.068 billion. ASK totalled about 192.498 billion seat-kilometres, with domestic capacity up only 0.80% but international capacity up 13.06%, the fastest international expansion of the three. Yet the load factor fell 0.62 points to 84.85% — the only Big Three carrier with a declining load factor — as capacity growth outpaced revenue recovery; yield rose 6.52% to RMB 0.49 per passenger-kilometre. Passengers reached 83 million, including 11.242 million international. The fuel bill was the decisive factor: RMB 34.886 billion, up 37.70%, and the carrier disclosed that every 10% move in average fuel price changes operating costs by RMB 3.489 billion. Fleet changes in the half were modest (19 deliveries, 18 exits; net +1), but the C919 fleet grew to 11 aircraft, and management signed an order for 137 A320neo in April and seven B777F/B777-8F freighters in June; the full-year plan is 60 deliveries, 44 exits and a year-end fleet of 988. Finance costs fell 40.97% to RMB 1.680 billion, helped by foreign exchange and debt restructuring — the carrier discloses that every 1% move in RMB/USD changes equity by RMB 237 million. Gearing rose 1.64 points to 85.91%. Loss-making mainland operations were partly cushioned by subsidiaries: China Southern Logistics earned RMB 1.906 billion and Xiamen Airlines RMB 36 million in the half. Q1 had been profitable at RMB 1.481 billion.
For the first nine months, China Southern reported revenue of RMB 147.212 billion (+6.93%) and an attributable net loss of RMB 4.305 billion, down 286.61% from a RMB 2.307 billion profit a year earlier. Q3 revenue was RMB 52.533 billion (+2.26%) and attributable net loss RMB 609 million — the only quarterly loss among the Big Three. The nine-month load factor was 85.4% (-0.22 points; September alone 85.85%, -0.45 points). Passengers totalled 132 million (+0.89%), while international passengers grew fastest of the three at 10.43% to 17.1459 million, with international capacity up 11.8% and international tonne-kilometres up 11.68%. On October 12 the carrier launched Guangzhou–Changsha–Addis Ababa and plans further winter-season additions to Jeju and Langkawi.
HNA Holdings: a profitable parent, a strained balance sheet
HNA Holdings (600221.SH), which emerged from its 2021 bankruptcy restructuring without an ST designation, reported first-half revenue of RMB 35.517 billion (+7.36%; transport revenue RMB 32.616 billion, +7.30%) and attributable net profit of RMB 270 million, up 374.43%. The quality of that profit was thin: ex-nonrecurring net profit was only RMB 29.2 million, net profit including minority interests RMB 101 million, and gross margin just 2.06%. Operating cash inflow was a healthier RMB 6.231 billion. Traffic actually contracted — 33.54 million passengers, flights down 2.77% and block hours down 3.31% — implying better unit yield on less capacity. The fleet stood at 367 aircraft (68 widebody, 299 narrowbody) at June 30. For the first nine months, revenue reached RMB 55.732 billion (+4.29%), attributable net profit was about RMB 800 million, and operating cash inflow totalled RMB 10.068 billion; Q3 alone delivered revenue of RMB 20.21 billion and net profit of RMB 550 million. For reference, the group posted 2025 full-year revenue of RMB 68.471 billion and net profit of about RMB 1.98 billion, second only to Spring Airlines among Chinese listed passenger carriers.
The balance sheet remains the story. Gearing stood at 96.46% at June 30, up 1.15 points quarter on quarter and the highest among the seven A-share listed passenger carriers (Spring Airlines’ gearing is 65.69%; the Big Three are below 90%). Long-term borrowings of RMB 42.35 billion dwarf the billion-scale debt of peers and are largely restructured legacy debt from the 2021 bankruptcy proceedings: a 10-year facility with semi-annual interest and scheduled annual principal repayments ramping 2%/4%/4%/10%/10%/15%/15%/20%/20% from 2022. Because 2026 is the fourth repayment year, the scheduled principal step-up jumps from 4% to 10%. To manage the burden, the carrier announced a RMB 15.154 billion syndicated-loan framework in June combining new working capital and debt replacement. Asset disposals continued: on September 11 it announced the sale of two E190 aircraft by subsidiary Urumqi Airlines to AfricaWorld Airlines for about RMB 132 million; reports also cite locked-in aircraft purchase orders worth USD 5.36 billion, largely A320neo-family jets. In May the company launched a RMB 66,666 “Golden Peng Shunxin Card” prepaid travel product; reports in July of mandatory internal sales quotas drew controversy, and the product listing was withdrawn on September 22. Contract liabilities rose 36.9% to RMB 4.13 billion, read by analysts as partly prepaid-ticket cash inflow.
Below the parent, the group’s smaller carriers all lost money in the half: Xinhua Airlines RMB -384 million, Lucky Air RMB -243 million, Chang’an Airlines RMB -171 million, Shanxi Airlines RMB -137 million, Fuzhou Airlines RMB -114 million, Beibu Gulf Airlines RMB -114 million and Urumqi Airlines RMB -2 million. West Air, deconsolidated at end-2025 (HNA retains a 13.94% equity-method stake), was a bright spot: January–July revenue of RMB 4.619 billion and net profit of RMB 197 million, with gearing falling from 106.41% in September 2025 to 92.6% by end-July after a RMB 1.5 billion capital injection. Standalone 2026 financial data for Tianjin Airlines and Capital Airlines were not disclosed.
Low-cost carriers: Spring resilient, Juneyao hit
Spring Airlines remained the country’s most profitable listed passenger airline. First-half revenue rose 19.72% to RMB 12.336 billion while attributable net profit fell 10.81% to RMB 1.042 billion. Its industry-leading load factor improved 2.1 points to 92.59%, ASK grew 15.36% (domestic +18.38%, international +4.10%, regional +41.24%), and yield rose 2.34% to RMB 0.385 per passenger-kilometre. Cost discipline softened the fuel blow: unit cost rose 8.0% to RMB 0.327, of which unit fuel cost jumped 33.2% (the domestic average fuel purchase price rose 38.5%), while unit non-fuel cost fell 4.8% to RMB 0.192 on a 10.2% rise in aircraft utilization. Gross margin compressed 3.5 points to 10.4%. Other income, mostly route subsidies, was RMB 669 million; the board proposed an interim dividend of RMB 3.3 per 10 shares and repurchased about RMB 500 million of shares in July. The fleet grew from 138 aircraft at end-June to 140 by end-September; 12 A320-family deliveries are planned for 2026, alongside a signed order for 30 A320neos for 2028–2032 delivery. The international network covers nine countries and 20 cities; China–Thailand capacity is back to about 90% of 2019, and foreigners account for nearly 80% of passengers on China–Korea routes. For the first nine months, revenue reached RMB 19.35 billion (+15.4%) and net profit RMB 1.84 billion (-21.1%); Q3 net profit was RMB 800 million (-31.4%). The nine-month load factor reached 93.0% (+1.7 points), but Q3 yield turned negative at RMB 0.397, down 2.1% — monthly one-way ticket prices moved -5.0%, 0.0% and +4.1% across July, August and September — the clearest yield-management warning signal in the sector that domestic price pressure has not fully cleared.
Juneyao Airlines felt the shock more sharply. First-half revenue rose 9.16% to RMB 12.081 billion, but attributable net profit plunged 70.27% to RMB 150 million. The load factor improved 1.83 points to 87.00%, and operating cash inflow grew 39.31% to RMB 4.329 billion, but jet fuel accounted for 40.10% of operating costs — the heaviest disclosed fuel exposure among listed Chinese carriers. Management attributed the profit drop to fuel-cost inflation and to a deliberate contraction of international capacity with lower international passenger numbers. The Juneyao mainline fleet comprises 93 A320-family aircraft (about 30 of them A320neo) plus 10 Boeing 787s (five owned, five finance-leased). Wholly owned 9 Air operates 28 Boeing 737s (21 737-800 and seven 737 MAX 8) to 49 destinations across 11 countries; 9 Air’s standalone 2026 half-year financials were not disclosed. For context, Juneyao’s 2025 full-year revenue was RMB 22.499 billion and net profit RMB 1.040 billion.
Regional and distressed carriers
Huaxia Airlines, the regional feeder specialist, reported first-half revenue of RMB 3.729 billion (+3.29%) but attributable net profit of only RMB 43.54 million, down 82.64% (ex-nonrecurring RMB 30.16 million, -86.7%); Q2 alone swung to a quarterly loss. Management blamed the external cost shock from higher oil prices even as it operated a record number of routes.
Shandong Airlines, delisted and now quoted in the over-the-counter market as “Shandong B3” (code 420178), continues to publish half-year reports. First-half revenue was RMB 10.159 billion (+6.16%), net loss was about RMB 1.241 billion, gross margin was -7.49% and the operating margin -12.2%; the fleet numbers 142 aircraft and total assets are about RMB 29.83 billion, a balance sheet that is insolvent.
Fuel costs and the surcharge pass-through
The 2026 fuel trajectory explains almost everything. Jet-kerosene ex-factory prices averaged about RMB 5,450 per tonne over January–February; by late March, after two March price adjustments, PetroChina’s price was RMB 5,562 per tonne and Sinopec’s RMB 5,602. The Middle East conflict then drove prices sharply higher through the second quarter. July’s ex-factory price was RMB 8,030 per tonne, down 17.54% month on month but still up 46.08% year on year, according to Sinolink Securities’ transport weekly citing Wind data. The climb had been steep: on March 9 domestic refined-product ex-factory prices were raised by RMB 695 and RMB 670 per tonne at the two majors, followed on March 23 by a temporary adjustment of RMB 1,160 and RMB 1,115 per tonne. August was estimated near RMB 8,500; September 1 is derived at about RMB 8,170; October 1 stood at RMB 8,946, up 9.5% versus September 1 and near the year’s peak. Prices eased in early November as Brent crude retreated, but November’s official ex-factory price had not been published at the time of writing; the April–June monthly exact figures were not publicly retrievable and are treated as estimates.
Domestic passengers shared the burden through fuel surcharges, adjusted by ticket-issue date. Before April 5 the levy was only RMB 10/20 for short-/long-haul routes; on April 5 it jumped fivefold to RMB 60/120; on May 16 it peaked at RMB 90/170; in early June it was trimmed to RMB 80/150; on July 5 it fell to RMB 50/100; and on August 5 it was cut for the third time to RMB 40/70, below the RMB 100 level. The mechanism is formulaic: a baseline of RMB 5,000 per tonne, with 80% of any excess passed to passengers via the surcharge, lagged to the prior month’s average price — which is why the August cut arrived even as international crude was still rising, a move Caixin described as partly policy-driven. At the carrier level, the Big Three’s combined first-half fuel bill exceeded RMB 96.8 billion, roughly 37.5% of their combined revenue. On the supply side, Sinopec’s first-half jet-fuel sales volume grew 1.3% even as total domestic refined-product sales fell about 9%, underscoring how central aviation demand had become for refiners.
Domestic versus international: a diverging recovery
International remained the industry’s growth engine. First-half international passenger traffic grew 5.7% year on year; during the 2026 Spring Festival holiday, outbound international flights recovered to 92.3% of the 2019 Spring Festival level, serving 73 countries; in the summer-autumn season starting March 29, 191 airlines scheduled 21,047 weekly international flights (+1.8%) to 86 countries, including newly added Cyprus. Through the first three quarters, industry international tonne-kilometres grew 12.7%. Disruption persisted: during the May Day holiday the international cancellation rate jumped from 3.6% to 7.4% amid Middle East conflict, and Chinese carriers’ international cancellations reached 10.7%.
The winter season, starting in late October, marked a strategic flip on domestic supply: domestic passenger slots were cut 5.8% year on year, while international slots stood at 89% of 2019 levels — a deliberate “control volume, defend price” stance that brokerages expect to support fares. Against that backdrop the Big Three expanded international traffic counter-cyclically: in the first nine months Air China carried 14.873 million international passengers (+8%), China Eastern 16.1056 million (+3.93%) and China Southern 17.1459 million (+10.43%), with international capacity growth outpacing total capacity growth at all three.
Pricing: a soft summer, then stabilization
Fare data trace the year’s tension. First-half economy-class average fare including taxes and surcharges was about RMB 808, up 8.7% year on year (and 0.9% above 2019); research by TMTPost estimated that the surcharge and taxes contributed about 5.2 percentage points of the incl-tax rise. July’s incl-surcharge average was RMB 834.7, down 0.7% year on year; during the July–August summer peak, the ex-surcharge average fell to RMB 719, down 8.4%, while the incl-surcharge average of RMB 855.4 was up only 1.1% — a textbook volume-up, price-down pattern after weak demand readings (May Day holiday traffic fell 5.74%; June industry passengers fell 6.5%). September reversed the trend: the average fare rose 6.5% year on year to RMB 742.1. The National Day holiday week delivered an incl-tax average of RMB 929.7, up 11.2% (naked fare RMB 820.2, +6.0%). The CAAC’s own mid-year gauge — seat-kilometre revenue up 7.7% in H1 — confirms the pricing weakness was concentrated in Q3.
Regulation kept pace. At the January 2026 work conference the CAAC pledged to curb “involutionary” below-cost competition, to study a passenger-transport cost-survey mechanism and a fare-adjustment mechanism, and to tighten rights on low-efficiency routes. In March the Big Three jointly introduced a “free refund if you find a cheaper fare within 24 hours” pledge, seen as a transparency move. In the October winter season, the CAAC’s Optimized Domestic Route Review Measures elevated the anti-involution effort from window guidance to a formal review system built on carrier count, load factor and traffic, targeting “busy-but-unprofitable” routes. Spring Airlines’ Q3 yield turning negative at -2.1% is the sector’s reminder that pricing stabilization is uneven.
FX and macro backdrop
The renminbi appreciated steadily through 2026. Onshore spot closed at 6.6458 per US dollar on November 2, up about 4.9% year to date (offshore traded as strong as 6.6425 intraday); the central bank raised the FX deposit reserve requirement ratio to 6% on November 2, its first such use in nearly five years, to slow the pace of appreciation; the central parity rate on November 3 was 6.7150. For Chinese carriers — heavy users of US-dollar aircraft debt and US-dollar-priced fuel — appreciation is a near-term tailwind: Air China reported a RMB 650 million first-half foreign-exchange gain; China Southern’s first-half finance costs fell 40.97% partly on FX and debt restructuring, and it discloses that every 1% move in RMB/USD shifts equity by RMB 237 million. IATA’s own outlook assumed a roughly 5% weaker US dollar globally this year.
On the macro side, the government set a 2026 GDP growth target of 4.5–5% at the March Two Sessions. Actual readings tracked within range: +5.0% in Q1, +4.3% in Q2 and +4.5% in Q3, leaving first-three-quarter GDP at RMB 107.1071 trillion, up 4.6%. Holiday traffic tracked the uneven demand picture: the 40-day Chunyun carried 94.39 million air passengers (+4.6%); the nine-day Spring Festival holiday 22.05 million (+7.7%); May Day 10.54 million (-5.74%); the 62-day summer rush 151 million (+2.9%); and the National Day week about 16.95 million, roughly flat year on year, though October 1 itself set a same-day record of more than 2.51 million passengers. Society-wide cross-region mobility, for context, reached 1.517 billion trips over the May Day break and 2.142 billion over the National Day holiday.
Debt and cash flow
Balance-sheet stress remained concentrated at HNA Holdings: 96.46% gearing, RMB 42.35 billion of long-term restructured debt with the 2026 principal-amortization step-up from 4% to 10%, the RMB 15.154 billion syndicated-loan refinancing, a string of loss-making subsidiaries, and contract liabilities of RMB 4.13 billion (+36.9%) boosted by prepaid-card sales — a short-term cash comfort that carries embedded refund obligations. By comparison, the Big Three carried gearing of roughly 86–87% (China Southern 85.91%; China Eastern 87.01%), while Spring Airlines’ gearing stood at 65.69%. Despite paper losses, operating cash flows stayed positive across the board: Air China RMB 13.667 billion in the half, China Southern RMB 12.596 billion, China Eastern’s EBITDA margin at 17.3%, Juneyao RMB 4.329 billion (+39.31%), HNA Holdings RMB 6.231 billion, and Spring Airlines RMB 6.148 billion over nine months (+10.94%).
Outlook and risks
Q4 2026 begins with mixed signals. On oil, the October ex-factory peak of RMB 8,946 per tonne was easing as Brent retreated in early November, and market participants expect a lower oil centre to release profit elasticity — but Middle East supply risks remain the dominant uncertainty, and Chinese ex-factory prices adjust with a lag. On capacity, the winter season’s 5.8% domestic slot cut, together with the CAAC’s tightened route reviews, should support fares; September’s +6.5% and the National Day +11.2% readings suggest pricing is stabilizing, though Spring’s negative Q3 yield warns the recovery is uneven. Seasonal expectations had run ahead of reality: early July pre-sale estimates had projected a record incl-tax summer average near RMB 1,197, but realized settlement fares came in far lower, and by the first week of September average prices were about 35% below the summer peak while deeply discounted fares remained widely listed on online platforms. On international, continued slot rebuild toward 89% of 2019 and the Big Three’s double-digit international traffic growth provide a volume offset. On FX, further renminbi appreciation would keep easing USD-debt burdens, though translation gains may fade as the base effect runs off. On regulation, the anti-involution campaign should discourage destructive fare wars but also caps pricing upside. HNA’s refinancing and its 2026 amortization step-up remain a discrete watch item. Low-cost carriers, with the lowest gearing and the strongest unit non-fuel cost discipline, look best positioned to absorb another leg higher in fuel — yet even Spring Airlines’ earnings fell double digits this year, a reminder that in 2026 almost no Chinese airline was immune to the fuel shock.
Data sources
Key figures in this analysis are drawn from company interim and quarterly reports, CAAC and Ministry of Transport releases, and the following media reports, all accessed on November 3, 2026:
- CAAC mid-year work conference data (July 15, 2026): http://www.caac.gov.cn/PHONE/XWZX/MHYW/202607/t20260715_231267.html
- CAAC 2026 work plan (January 6, 2026): https://www.gov.cn/lianbo/202601/content_7054010.htm
- IATA Global Outlook for Air Transport, June 2026: https://www.iata.org/en/pressroom/2026-releases/06-07-middle-east-disruptions-high-fuel-prices-halve-airline-industry-profitability
- Industry aggregate nine-month review (November 3, 2026): https://finance.huanqiu.com/article/4TsDSlsRMqI
- Big Three nine-month results aggregation (November 3, 2026): http://m.toutiao.com/group/7703765994547855882/
- Air China interim report data (August 31, 2026): http://www.cnfin.com/announ/detail/index.html?announ=lc&code=601111&dannoun=lcdetail&id=841419174572
- Air China Q3 report commentary (October 29, 2026): https://finance.sina.com.cn/stock/estate/integration/2026-10-29/doc-iniwxekt5146117.shtml
- China Eastern interim results materials (August 31, 2026): https://www.ceair.com/global/static/AboutChinaEasternAirlines/intoEasternAirlines/InvestorRelations/mediaRelease/mediaReleaseHome/ShanghaiStockExchangeReleased2026/202609/P020260914572986083256.pdf
- China Eastern Q3 report commentary (October 30, 2026): https://finance.sina.com.cn/stock/zqgd/2026-10-30/doc-iniwzazv4589152.shtml
- China Southern interim results announcement (August 28, 2026): https://www1.hkexnews.hk/listedco/listconews/sehk/2026/0828/2026082803261_c.pdf
- China Southern H1 data interpretation (September 8, 2026): https://stock.stockstar.com/RB2026090800019038.shtml
- China Southern Q3 report (October 30, 2026): https://www1.hkexnews.hk/listedco/listconews/sehk/2026/1030/2026103002248_c.pdf
- HNA Holdings H1 results (August 25, 2026): https://www.cs.com.cn/ssgs/01/2026/08/25/detail_2026082510033970.html
- HNA debt and restructuring analysis (October 10, 2026): https://finance.sina.com.cn/stock/zqgd/2026-10-10/doc-iniutcvr7464101.shtml
- HNA group subsidiary H1 results (August 25, 2026): https://finance.sina.com.cn/jjxw/2026-08-25/doc-inipqaak5487766.shtml
- West Air deconsolidated results (September 8, 2026): https://finance.sina.com.cn/stock/relnews/cn/2026-09-08/doc-inircrns9286101.shtml
- Spring Airlines research summary (updated November 2, 2026): http://basic.10jqka.com.cn/601021/worth.html
- Juneyao Airlines interim report PDF (August 30, 2026): https://pdf.dfcfw.com/pdf/H2_AN202608301828734568_1.pdf
- Juneyao H1 interpretation (September 9, 2026): https://stock.stockstar.com/RB2026090900030401.shtml
- Huaxia Airlines interim results (August 27, 2026): http://www.cnstock.com/commonDetail/775872
- Shandong Airlines H1 report PDF (August 28, 2026): http://file.finance.sina.com.cn/211.154.219.97:9494/MRGG/SBGG/2026/2026-8/2026-08-28/12568354.PDF
- Shandong Airlines financial analysis (September 12, 2026): https://finance.sina.com.cn/jjxw/2026-09-12/doc-inirqwer1081964.shtml
- Jet-fuel price trajectory and surcharge history (August 1, 2026): https://www.caixin.com/2026-08-01/102470534.html
- July jet-fuel ex-factory price (July 12, 2026): https://finance.sina.com.cn/wm/2026-07-12/doc-inihpymz2834383.shtml
- Fuel surcharge mechanism explanation (August 5, 2026): https://news.cctv.com/2026/08/05/ARTIRidm0tMy9hmojpERH0RQ260805.shtml
- National Day fare data (October 3, 2026): https://finance.sina.com.cn/jjxw/2026-10-03/doc-inityccx0614318.shtml
- Spring Festival international recovery (February 24, 2026): https://m.thepaper.cn/newsDetail_forward_32649383
- May Day international cancellations (April 21, 2026): https://m.gmw.cn/2026-04/21/content_1304427214.htm
- CAAC anti-involution policy (January 9, 2026): https://m.gmw.cn/2026-01/09/content_1304296942.htm
- Q3 GDP data (October 20, 2026): https://www.stats.gov.cn/zwfwck/sjfb/202610/t20261020_1965658.html
- Renminbi exchange rate and FX reserve requirement (November 3, 2026): https://news.ifeng.com/c/8xkMs04YfjI
- Summer season traffic data (September 1, 2026): https://www.gov.cn/lianbo/202609/content_7079879.htm