Shares of China’s largest airlines have come under heavy pressure as jet fuel costs rise and domestic travel demand weakens. According to CNBC, citing LSEG data, leading Chinese carriers have lost about 30% since late February, underperforming many regional peers. Over the same period, Singapore Airlines fell around 9%, Korean Air declined 7%, and Japan Airlines lost about 20%.

The main pressure point is fuel. Higher oil and aviation fuel prices linked to the Middle East conflict and disrupted energy flows have raised operating costs across the sector. HSBC analysts now expect China’s “Big Three” airlines — Air China, China Eastern and China Southern — to post a combined net loss of 22 billion yuan, or roughly $3.2 billion, in 2026. That would wipe out the benefit of a strong first quarter, when all three carriers returned to profit.

The impact is sharper because Chinese airlines have limited fuel hedging. Unlike many global peers, Air China and China Southern entered the fuel shock with little protection, while China Eastern’s hedging exposure was reportedly small. Raising fares is also difficult: China’s domestic travel market is highly price-sensitive, and high-speed rail continues to compete with airlines on major routes.

State backing remains the key buffer. HSBC expects government-linked carriers to stay more resilient than private airlines in similar conditions, but higher fuel costs and weaker demand still threaten earnings.