Photo: Reuters, Aly Song

China’s largest three airlines all missed profit expectations Thursday, on US$1.6 billion worth of foreign exchange losses, reports Reuters.

Strong demand in the world’s fastest growing aviation market drove large orders of new aircraft, but loans for purchases were mostly denominated in US dollars. This came as the yuan lost 6.6% against the dollar last year, the biggest drop since 1994.

The global oil price recovery has also weighed on the carriers’ fuel bills.

Air China’s profits rose 0.6%, while China Eastern’s profits dipped 0.7%. China Southern’s profit rise of 30% also missed expectations, though the airline mitigated the pain of yuan depreciation by adjusting its debt structure ahead of schedule.