Chinese Airlines Achieve Profit for Second Consecutive Year, CAAC Reports

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China’s civil aviation industry reported profitability for the second consecutive year after experiencing four years of losses. The industry regulator announced plans to focus on reducing aggressive pricing battles to further improve profit margins this year.

Last year, Chinese airlines generated approximately 6.5 billion yuan (around 930.8 million USD), marking a year-over-year increase in earnings driven by steady growth in passenger numbers, cargo volume, and mail throughput, along with declining fuel costs, according to the Civil Aviation Administration of China during its annual conference.

From 2020 to 2023, airlines incurred losses totaling about 420 billion yuan (roughly 60.1 billion USD) due to the COVID-19 pandemic, but these losses narrowed by 20.6 billion yuan (about 2.8 billion USD) in 2024 as the pandemic’s impact lessened.

Passenger traffic increased by 5.5% last year to reach 770 million travelers, and freight and mail volumes surged by 13% to 10.2 million tons, the regulator stated. The industry aims to serve 810 million passengers and handle 10.7 million tons of freight and mail in 2025.

Following a recovery to pre-pandemic levels in 2023, air travel in China hit record highs in 2024 and 2025. Many airlines responded by lowering ticket prices to attract more travelers, with economy class fares dropping by an average of 13% in 2024 and an additional 3% last year, according to flight data provider Flight Master.

The regulatory authority emphasized the importance of addressing this ‘race to the bottom’ in pricing to safeguard industry profits, with Director Song Zhiyong highlighting efforts to curb detrimental price competition this year.

Furthermore, authorities plan to develop methods for surveying passenger transportation costs, establish a fare monitoring and warning system, and enhance oversight of online ticket sales platforms, Song stated.

To support these initiatives, the Civil Aviation Administration is gathering data from airlines on route-specific costs to create a basis for a fare monitoring system that will prevent prices from falling below operational costs, several airline representatives confirmed.