China's Big Three Airlines Face Losses as Jet Fuel Costs Surge

China's three largest airlines — Air China, China Eastern Airlines and China Southern Airlines — could end 2026 in the red as jet fuel prices climb, Reuters reports.

Third-quarter results came in far below last year's, hit by sharply higher fuel costs, weak domestic fares and typhoon disruptions during what is normally the most profitable stretch of the year. Air China and China Eastern are now heading for a seventh straight year of losses; China Southern had returned to profit in 2025, its first since the pandemic.

Air China's quarterly net profit fell 92.6 percent year on year to 270.6 million yuan ($40.62 million). China Eastern earned 64 million yuan, down 98.2 percent. China Southern posted a net loss of 609 million yuan, against a 3.84 billion yuan profit a year earlier.

All three pointed to the jump in jet fuel prices. Chinese carriers hedge their fuel far less than many Asian and European peers, leaving them more exposed to oil swings. Domestic fares were also depressed by stiff competition, including from high-speed rail. Shares in Air China, China Eastern and China Southern have fallen 38, 46 and 39 percent this year.

That exposure matters beyond China: Goldman Sachs analysts expect the Middle East escalation to trigger a global fuel shock, with jet fuel and diesel prices rising faster than crude — a squeeze that would hit airlines, farmers and households alike.