BEIJING (Reuters) -China’s three biggest airlines posted their first collective quarterly profit in a year in the third quarter on the back of the peak summer season, but the recovery could be fleeting as oversupply continues to drag down the domestic aviation market.
Flag carrier Air China reported on Thursday a third-quarter net profit of 4.14 billion yuan ($581.22 million), down 5.16% from last year.
The airline also announced plans for an A-share private placement to raise up to 20 billion yuan, aiming to repay debts and replenish capital, according to a stock exchange filing.
China Eastern, the launch customer for the home-grown C919 narrow-body jet, swung back to a profit of 3.53 billion yuan after three quarters of losses, compared with a profit of 2.63 billion yuan in the same period of last year.
China Southern, which released results on Monday, booked a third-quarter profit of 3.84 billion yuan, versus 3.19 billion yuan the prior year.
The country’s three leading airlines have posted annual losses since the start of the COVID-19 pandemic, though analysts expect they could swing to a full-year profit in 2025 on the back of the strong summer performance.
Their recovery has been weaker than international peers because Chinese economic growth has slowed and intense domestic competition between the airlines and high-speed rail has pressured fares.
In the recent week-long National Day holiday, average one-way fares edged up 10% year-on-year to 910 yuan, data from VariFlight showed.
Since then, flight frequencies and fares have slipped as the market drifts into low season. From October 13-19, the average domestic fare was 768.3 yuan, 12% below its level a month earlier, according to aviation data platforms.
Data show international capacity at roughly 85% of 2019 levels, but North American services remain at less than one-third of pre-pandemic levels due to China-U.S. frictions.
($1 = 7.1230 Chinese yuan renminbi)
(Reporting by Sophie Yu in Beijing and Brenda Goh in Shanghai; Editing by Jamie Freed)
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