Flying Abroad, Paying for Fuel: China Southern Airlines in 2025-2026

Summary

China Southern Airlines, China's largest airline by fleet with 973 aircraft, returned to profit in 2025: RMB855 million for shareholders, after losses in 2023 and 2024. Most of the growth came from international routes, whose revenue rose from RMB35 billion in 2023 to RMB58 billion in 2025. In the first half of 2026 fuel cost 38% more and the airline lost RMB3.7 billion. It flies up to 29 times a week to Almaty and Astana and on 30 October 2026 signed a joint venture with Air Astana.

Key findings

1. After losses of RMB4.1 billion in 2023 and RMB1.8 billion in 2024, China Southern earned RMB855 million for shareholders in 2025. Revenue rose 4.6%, to RMB182 billion.
2. International routes drove the growth. Their revenue rose from RMB35.2 billion in 2023 to RMB57.6 billion in 2025, and international passengers from 9.1 million to 21.1 million.
3. In the first half of 2026 jet fuel cost 38% more, revenue grew 9.7%, and the loss widened to RMB3.7 billion.
4. China Southern flies up to 29 times a week to Almaty and Astana and signed a joint venture with Air Astana on 30 October 2026.

A big airline with a thin margin

China Southern is based in Guangzhou and is one of China's three large state-controlled airlines. At the end of June 2026 it had 973 aircraft, including 11 Chinese-built C919s and 40 C909 regional jets. In 2025 it carried 173.7 million passengers, eighteen times as many as Air Astana.

The airline is large but earns little on each yuan of revenue. In 2025 its operating profit was RMB9.6 billion on revenue of RMB182 billion, and after interest, tax and the share of minority owners, RMB855 million was left for shareholders. Total liabilities were 84% of total assets, and the board paid no dividend for 2025.

IFRS figures. Sources: China Southern, 2025 results; Interim Report 2026; 2024 results.

Growth came from abroad

Domestic revenue was flat in 2025, at RMB122 billion, and the average fare per kilometre at home fell 4%. International revenue grew 15%, to RMB57.6 billion, and the number of international passengers rose 20%, to 21.1 million (Figure 2). The company says flights on Belt and Road routes, which include Central Asia, rose 15.4% in 2025.

The trend continued in the first half of 2026: international passenger revenue grew 27%, to RMB22.4 billion, and international cargo revenue 20%.

2026: fuel took the gain

Revenue rose 9.7% in the first half of 2026, to RMB94.7 billion. Jet fuel, the airline's largest cost, rose from RMB25.3 billion to RMB34.9 billion, which the company attributes to high and volatile oil prices. The loss attributable to shareholders grew from RMB1.5 billion to RMB3.7 billion, and no interim dividend was declared.

China Southern in Kazakhstan

China Southern is the main Chinese airline on routes to Kazakhstan. In peak season it flies up to 29 return flights a week from Urumqi, Beijing, Guangzhou and Xi'an to Almaty and Astana. Its codeshare with Air Astana covers 50 weekly flights, and the joint venture signed on 30 October 2026 goes further: the airlines plan to align schedules, fares and rules on routes between the two countries. China Southern's executive vice president called it "a substantive achievement" under the Belt and Road framework. A separate note on Air Astana looks at the Kazakh side.

Valuation

China Southern's Hong Kong shares closed at HK$2.72 on 30 October 2026. Applying that price to all 18.1 billion shares gives a market value of about RMB42 billion (Table 2), 49 times the small 2025 profit and 1.17 times book value. Because the airline lost money over the twelve months to June 2026, the price-to-earnings ratio says little; the market is valuing the fleet and an expected recovery.

Hong Kong price applied to all A and H shares; HK$ converted at 0.848 yuan. Book value is equity attributable to shareholders at 31 December 2025. Sources: Stock Analysis; National Bank of Kazakhstan; China Southern, 2025 results.

How it compares

Of the seven companies covered on this site, China Southern Airlines is the most expensive by price to 2025 profit. The table ranks them from lowest to highest.

P/E is the market value divided by 2025 profit; P/B uses the latest reported equity, where shown in the notes. A low P/E can mean a cheap share or a profit the market expects to fall. Sources: KASE; Stock Analysis; National Bank of Kazakhstan exchange rates.

Who owns the company

China Southern Airlines is controlled by China Southern Air Holding, a state-owned company. It holds 51.9% directly in A shares listed in Shanghai and another 14.6% in Hong Kong H shares through its subsidiaries Nan Lung Holding and Perfect Lines, 66.5% in all.

Risks

1. Fuel is the largest cost and most of it is bought in China at spot prices, which the company says it has no effective way to hedge.
2. Average fares at home are falling, so growth depends on international routes.
3. Debt is high: liabilities were 84% of assets at the end of 2025.
4. New aircraft orders, including 137 Airbus A320neo family jets still subject to shareholder approval, will need more borrowing.

This note is independent research for information and learning. It is not investment advice or a recommendation to buy or sell any security.

Notes and method

• All company figures come from China Southern's IFRS results announcements and Interim Report 2026, listed under Sources. Money is in Chinese yuan (RMB). Profit is attributable to the company's equity shareholders. The 2023 loss of RMB4.14 billion is the IFRS figure; under Chinese accounting standards the company reported a loss of about RMB4.2 billion.
• International revenue follows the company's geographical split: traffic with origin or destination outside China, Hong Kong, Macau and Taiwan, plus services performed abroad.
• The company has A shares in Shanghai and H shares in Hong Kong. Valuation applies the Hong Kong price to all 18.12 billion shares; A shares usually trade at a different price, so this is an approximation. Ratios and percentage changes are calculated by the author.

Sources

1. China Southern Airlines, Annual results announcement for the year ended 31 December 2025 (HKEXnews, 30 March 2026)
2. China Southern Airlines, Interim Report 2026 (HKEXnews, 28 August 2026)
3. China Southern Airlines, Annual results announcement for the year ended 31 December 2024 (HKEXnews, 26 March 2025)
4. Hong Kong closing prices for Geely Automobile (0175) and China Southern Airlines (1055), 30 October 2026, via Stock Analysis
5. National Bank of Kazakhstan, official exchange rates set on 30 October 2026

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