by XUE Bingbing

As Chinese carriers released their half-year results, a clear divide emerged: four private airlines returned to profit, while the three state-owned giants – Air China, China Southern Airlines and China Eastern Airlines – remained in the red.

Spring Airlines, known for its low-cost model, led the profit chart with 1.17 billion yuan (US$160 million) despite a year-on-year drop. Hainan Airlines, still recovering from bankruptcy restructuring, posted a modest profit of 56.9 million yuan. Regional carrier China Express Airlines saw net profit surge more than eightfold to 251 million yuan on government-backed operations.

Within the state-owned trio, however, the long-struggling China Eastern staged a rare turnaround. Traditionally the weakest of the three, it outperformed "flagship" Air China and China Southern, which brands itself as Asia's largest airline. China Eastern's first-half loss was 375 million yuan smaller than Air China's and 102 million yuan narrower than China Southern's. Compared with a year earlier, its losses shrank by 1.34 billion yuan – the sharpest improvement among the three.

The key driver was international recovery. China Eastern's interim report said losses narrowed mainly due to further expansion of international operations, improved cost control, and stronger operational indicators. The carrier has become the mainland airline with the most international destinations, with flights from Shanghai surpassing 110 per cent of 2019 levels.

Unlike private rivals that focus on short-haul routes to Japan, South Korea and Southeast Asia, the big three operate extensive long-haul services to Europe, North America, Australia, the Middle East and Africa. That makes them heavily reliant on wide-body aircraft – expensive to buy and operate, but profitable when filled on long-haul routes. With the pandemic grounding many wide-body jets, domestic oversupply and fare wars left the state-owned trio deep in losses, from which they are still struggling to recover.

China Eastern's strategy this year has been to "fly farther, fly international, fly into emerging markets." It launched 14 new routes, including Shanghai–Abu Dhabi, Geneva and Copenhagen, as well as Xi'an–Istanbul and Tashkent. International passenger numbers rose 28 per cent in the first half, outpacing Air China's 18.6 per cent and China Southern's 25 per cent. International revenue grew 20.34 per cent, the fastest among the three.

"China Eastern's turnaround is driven by better utilisation of wide-bodies, higher yields on long-haul flights, transfer traffic through the Shanghai Pudong hub, and more efficient fuel use," said HAN Tao, a civil aviation analyst with the Guangdong Transport Association, in an interview with Jiemian News. He noted that international fares remain two to three times higher than domestic ones, with long-haul customers less sensitive to price.

The carrier also pushed ancillary revenue and cost-cutting. It set up a new division for cross-industry partnerships and rolled out tie-ups with Starbucks, cultural attractions such as the Emperor Qinshihuang's Mausoleum Museum, and Bilibili, a Chinese video platform popular with younger audiences. Online sales reached 6.1 billion yuan, up 30 per cent, while new retail brought in 2.26 billion yuan, up nearly 25 per cent. Fuel savings were achieved through single-engine taxiing and optimised flight levels.

Still, analysts warn challenges remain. High-speed rail continues to divert business travellers in China's eastern region, while international recovery is uneven, with Europe and North America lagging. China Southern, for its part, attributed wider losses partly to the reversal of deferred tax assets under accounting rules.

"China Eastern has made real progress, but part of the gap with rivals comes from non-operating items elsewhere," said one industry insider. Han Tao added that sustaining momentum will require sharper international network management, cost efficiency and differentiated products.

The industry overall is still struggling with overcapacity, weaker business demand and price-sensitive leisure travellers. Unless demand rebounds strongly and fuel prices stay low, China Eastern's bid to turn losses into profit this year will remain a tough fight.