China’s three largest airlines swung back to profit in the first quarter, marking a rebound after years of pandemic-era losses. Air China, China Eastern and China Southern all posted positive results as passenger demand recovered across domestic and international routes.

The recovery faces mounting headwinds from the Middle East conflict. The Iran war that erupted in late February has driven up jet fuel costs, threatening to squeeze margins just as the carriers regained their footing. The geopolitical turmoil has disrupted air travel and heightened broader economic uncertainty.

Higher fuel prices could reverse the sector’s momentum quickly. For investors, the Q1 profitability demonstrates the airlines’ operational resilience, but the fuel cost pressure represents a structural risk that may undermine bottom lines throughout the year.