Air China, China Eastern and China Southern posted combined first-half net losses of 8.17 billion yuan ($1.21 billion), compared with first-quarter profits boosted by strong international demand. The losses followed steep fuel-cost increases of 35-38% year-on-year driven by the Middle East conflict and Iran-Israel tensions. Air China reported a 2.29 billion yuan loss, China Eastern 2.18 billion yuan and China Southern 3.70 billion yuan, each widening from a year earlier.

Despite the losses, all three carriers posted resilient revenue growth—Air China up 10.5%, China Eastern 11% and China Southern 9.7%—driven by international traffic demand. However, weak domestic pricing in a cost-sensitive market and competition from high-speed rail remain key concerns. China Eastern outperformed peers with the highest operating margin thanks to lower domestic exposure and stronger international load factors.

The Civil Aviation Administration of China reported a 1.0% increase in passenger traffic volume to 380 million in the first half. DBS Group Research noted that shifting more capacity toward international routes may limit further yield increases as supply grows.