China’s Top Airlines Swing to Profit in Q1...China Southern Airlines, Xiamen Airlines Sign Agreement for 137 Airbus planes...Geely Joins Chery, BYD in Profit Decline as Subsidies Dry Up

Key Takeaways

• Air China, China Southern, China Eastern each posted >RMB1bn Q1 profit
• China Southern/Xiamen ordered 137 Airbus A320neo jets worth $21.4bn
• Geely profit fell 27% to $610m as EV subsidies end
• Ming Yang's 2025 profit rose 91% to $92m on higher turbine prices
• Chinese steelmakers' Q1 profit dropped 5% to $3.2bn amid cost hikes

Pulse Analysis

The first‑quarter earnings of China’s flagship airlines underscore a swift rebound in passenger demand, driven by the Lunar New Year holiday and the inability of Western carriers to use Russian airspace. By securing shorter Europe‑Asia routes, Chinese airlines have mitigated the impact of soaring fuel prices linked to the Iran conflict. The massive Airbus order—102 aircraft for China Southern and 35 for Xiamen—represents a $21.4 billion commitment to a more fuel‑efficient fleet, positioning the carriers to capture a larger share of the Belt‑and‑Road travel market.

In the automotive arena, Geely’s 27% profit drop to $610 million highlights the fragility of China’s electric‑vehicle boom once generous purchase subsidies are withdrawn. Although the company posted a record RMB 83.8 billion in revenue, higher export sales and premium‑model growth could not offset the loss of tax incentives and foreign‑exchange headwinds. The trend signals a pivot toward profitability through product differentiation and cost control rather than reliance on state‑driven demand, a shift that will test the resilience of other EV manufacturers such as BYD and Chery.

Renewable energy and heavy industry present a mixed picture. Ming Yang Smart Energy’s near‑doubling of net profit to $92 million reflects a recovery in wind‑turbine pricing after years of domestic price wars, bolstered by robust on‑shore and offshore installations. Conversely, China’s steel sector recorded a 5% profit decline to $3.2 billion as raw‑material costs rise and the EU’s carbon border adjustment mechanism squeezes margins. Together, these dynamics illustrate how China’s push for greener production is colliding with external cost pressures, forcing firms across sectors to balance growth ambitions with tighter fiscal and environmental constraints.