Chinese Aviation Industry Faces Tougher Challenges Amid High Oil Prices

(Central News Agency reporter Zhang Shuling, Beijing, 14th) Experts from the International Air Transport Association (IATA) pointed out that Chinese airlines have long suffered from low profitability, and high oil prices are making their situation even more difficult. They are simultaneously facing external uncertainties such as fluctuations in China-Japan relations, escalating tensions in the Middle East, and Sino-U.S. trade friction.

China's media outlet Caixin.com reported today that Willie Walsh, Director General of the International Air Transport Association (IATA), said at the 82nd Annual General Meeting, "China may be one of the few aviation markets globally that has not yet fully repaired its balance sheet post-pandemic."

He stated that Chinese airlines were already in a difficult phase of recovering to reasonable profit levels, given that the international market has not fully recovered and domestic competition remains intense. High oil prices have added another layer of burden.

Since the escalation of tensions in the Middle East, global aviation fuel prices have surged. Jet fuel costs account for about 30% of airlines' total costs, and can reach as high as 40%. IATA forecasts that global aviation fuel expenditure will increase from $252 billion in 2025 to $350 billion in 2026, an increase of nearly 40%.

The report says that even before the arrival of high oil prices, Chinese airlines already had a weak profit foundation. In 2025, China's civil aviation sector continued to see volume growth but falling prices. Among state-owned carriers, only China Southern Airlines, which still retains its unbundled freight business, made a profit, while Air China and China Eastern Airlines remained in loss, both having reported losses for six consecutive years.

A Chinese aviation industry insider who attended the aforementioned meeting said that although fuel surcharges on domestic and international routes in China's civil aviation have been raised, they are insufficient to cover the pressure brought by rising fuel costs.

He also mentioned that in addition to rising oil prices, Chinese airlines are simultaneously facing external uncertainties such as fluctuations in China-Japan relations, escalating Middle East tensions, and Sino-U.S. trade friction, meaning the recovery of the international market will still take time. (Editor: Qiu Guoqiang) 1150614