China's three biggest operators were adding losses to the first quarter of the year, as uncertainty surrounding competitive “pressure” and the ongoing trade war with the US as uncertainty surrounding revenue growth.
The Big 3, which consists of China, China Eastern Airlines and China Southern Airlines, was able to manage the increase in costs, but saw little revenue growth for the three months ended March 31st.
The country's largest operator, South China, even reported a quarterly revenue decline, swinging towards an operating loss of $69 million ($9.5 million). By comparison, the Guangzhou-based carrier reported operating profit of $1.5 billion over the same period in 2024.
Southern China is the only carrier in the Big Three to provide some explanation for poor performance, resulting from “multiple factors” such as “competitiveness” and “shift.” It also criticized supply chain constraints and depreciation of the Chinese Yuan.
Air China plummeted further in red, revealing an operating loss of $2.5 billion compared to a loss of $1.9 billion in the same period last year.
Quarterly revenues remained stable at CNY 40 billion, but for Star Alliance's career, operating costs rose 1.9% to $44.4 billion.
Similarly, eastern China reported revenues increased 0.7% to $33.4 billion. This marked a 2.7% increase in operating costs to $36.4 billion.
As a result, SkyTeam operators increased their first quarter loss to $1.2 billion.
In each result, the “Big 3” did not explicitly mention the ongoing trade war between China and the United States. The Trump administration's tariff policies have led to market uncertainty, and airlines around the world have warned of possible short-term consequences.
On April 29, China's Commerce Department issued a statement acknowledging that Chinese airlines and Boeing are “deeply suffering” in light of US tariffs imposed.
The statement, which is the first time that Beijing has outlined the impact of US tariff policies, comes as Chinese Boeing customers say they will not deliver new aircraft due to tariffs.
