Air China Stock Falls to 22-Year Low as Iran War Fuels Losses

Air China's Hong Kong-listed shares (0753.HK) sank to a 22-year low of HK$3.78 on Monday, tumbling almost 5% after the Beijing-based flag carrier reported a first-half net loss that widened 26.8% year-on-year to roughly RMB2.29 billion (about $340 million).

Loss per share widened to RMB0.13 from RMB0.11 a year earlier. Revenue still climbed 10.5% to RMB89.27 billion on stronger passenger capacity and better load factors, Air China said in its interim results — a sign the airline's cost problem, not demand, is driving the loss.

It wasn't just Air China. China Eastern Airlines posted a RMB2.2 billion first-half loss and China Southern Airlines lost RMB3.7 billion, according to Reuters, putting the three state carriers' combined first-half losses at about RMB8.2 billion ($1.22 billion) — a seventh consecutive year of first-half red ink. HSBC now expects the trio to post a combined RMB16.8 billion loss for all of 2026, against an earlier market forecast for a RMB1.3 billion profit. None of the three declared an interim dividend.

Jet fuel costs rose between 35% and 38% at each of the three carriers, Reuters reported, as prices stayed elevated through the war between the United States, Israel and Iran, which has added an estimated $330 billion to the world's combined oil, fuel and LNG import bill since March, according to OilPrice.com. A fresh jump in oil prices on Monday added to the pressure on Air China and its peers, Investing.com reported, with China Eastern and China Southern shares also down roughly 5% and Cathay Pacific slipping 2.2% in Hong Kong trading.

OilPrice.com reported the war was not over as of Friday, with elevated fuel costs likely to persist even once fighting ends because of damaged refining capacity in the Middle East and Russia — a signal that Air China's cost pressure may not ease before its next results.