Chinese airlines in a price war race to the bottom

Chinese state-owned airlines have joined an intensifying price war, although unwillingly, amid challenges including local passengers’ weakening spending power and rising market competition.

Air China, Southern Airlines and Eastern Airlines have been facing huge losses for five years since the Covid-19 pandemic broke out in early 2020.

Although China canceled all epidemic rules in early 2023, the three firms still recorded net losses in the past two years. They carried more passengers last year than in 2023, but had to lower air ticket prices due to rising competition from budget airlines and China State Railway Group, the country’s high-speed train operator.