The windowless freighter, derived from Airbus’s A350 long-haul passenger family, took off from Toulouse, France, on a four-hour maiden flight. The aircraft will now begin an intensive certification campaign lasting about nine months, with Airbus targeting certification and first customer deliveries in 2027.

The first flight marks a significant milestone for Airbus, which has faced challenges in establishing a foothold in the large-freighter segment.

Boeing has dominated the market with aircraft including the 747 freighter, 767 freighter and 777F, while Airbus’s previous attempts to build a comparable presence have not matched the US manufacturer’s success.

“This maiden flight is a major milestone for the A350F and for our customers worldwide. As the latest development of our highly successful A350 platform, the A350F is a true game-changer for the air cargo market, combining unmatched operational flexibility, fuel efficiency, and range,” stated Lars Wagner, CEO Commercial Aircraft at Airbus.

“I am immensely proud of the extraordinary dedication and hard work of all the teams who have made this achievement possible,” he stated further.

The second A350F prototype (MSN 701) is now at an advanced stage of final assembly and will enter the paint shop in the next few weeks, the planemaker remarked.

The A350F is designed to change that equation. Airbus says it has already secured 115 orders for the aircraft from 14 customers, according to figures reported around the maiden flight.

That compares with 81 orders for Boeing’s forthcoming 777-8F, although Boeing’s aircraft remains part of the wider 777X programme and has yet to enter service.

Among Airbus’s customers is Atlas Air Worldwide, one of the world’s largest operators of outsourced airfreight capacity.

In March, Atlas placed a firm order for 20 A350Fs, making it the aircraft’s largest customer and its first in the US.

The decision is notable because Atlas has extensive experience operating Boeing widebody freighters.

Air China Cargo has also committed to the programme, increasing its order to 10 aircraft in May.

The carrier said the aircraft would complement its existing fleet of A330-200 passenger-to-freighter conversions and provide additional capacity on international long-haul routes.

The A350F is intended to compete on both economic and cargo capabilities. Airbus says the aircraft can carry up to 111 tonnes of payload and fly up to 8,700 kilometres.

More than 70% of its airframe is made from advanced materials, helping make it substantially lighter than competing aircraft, while its Rolls-Royce Trent XWB-97 engines are designed to deliver lower fuel consumption and emissions.

The aircraft also features what Airbus describes as the largest main-deck cargo door in the industry, with its fuselage dimensions optimised around standard pallets and containers.

The design is intended to make the aircraft suitable for the growing movement of high-value and time-sensitive goods, from pharmaceuticals and electronics to semiconductors and e-commerce shipments.

Fuel efficiency is likely to be a central battleground. Cargo airlines operate in a business where fuel represents a substantial component of operating expenses, making the economics of each tonne of freight particularly important.

Airbus says the A350F will offer up to a 20% reduction in fuel consumption and carbon emissions compared with previous-generation aircraft in a similar payload-range category.

“Powered by the latest Rolls-Royce Trent XWB-97 engines, the aircraft will bring a reduction in fuel consumption and carbon emissions of up to 40% compared to competitor aircraft with a similar payload-range capability. It is the first new freighter to fully meet the latest ICAO’s CO₂ emission standards,” Airbus noted.

Regulation is another factor working in favour of new-generation freighters. The aviation industry is facing tighter emissions requirements, increasing pressure on airlines and cargo operators to replace older aircraft or convert existing passenger jets rather than continue relying on ageing freighter fleets.

Boeing nevertheless remains a formidable competitor. The company has forecast demand for about 930 new production freighters and 2,000 passenger-to-freighter conversions over the next 20 years, reflecting its expectation that global air cargo will continue expanding.

The contest will therefore extend beyond the two manufacturers’ aircraft specifications. Boeing has decades of experience in the freighter market, an established customer base and a large global ecosystem supporting its cargo aircraft.

Airbus, meanwhile, is attempting to leverage the A350 platform’s established long-haul credentials and the operating efficiencies of a clean-sheet freighter.

The A350F itself is not simply a passenger aircraft stripped of seats. Airbus has developed a dedicated main-deck cargo loading system, a large cargo door, fire and smoke protection systems, a courier area, anti-tail-tipping technology and other systems specifically for freight operations.

Ground testing has included loading the aircraft to its maximum 111-tonne payload and testing the drainage system and cargo-door operation.

The certification campaign will use two test aircraft and is expected to involve about 400 flight hours.

The first aircraft will focus heavily on aerodynamic performance and handling, while the second will undertake testing of systems such as air conditioning and fire and smoke detection.

For Airbus, the maiden flight is therefore more than just a programme milestone. It is the opening move in a bid to reshape a market where Boeing has held a powerful position for decades.

The outcome will depend on whether Airbus can translate its A350 technology, growing order book and promised fuel savings into reliable deliveries and attractive economics for cargo operators.

For airlines and logistics companies planning fleet renewal, the emergence of a credible Airbus alternative also gives them another option as the global freighter fleet enters a period of technological and regulatory change.

Image Courtesy: Airbus

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The agreement covers 100 firm Boeing 737-8 aircraft and options for a further 50 737 MAX jets. Turkish Airlines will also have substitution rights for the larger 737-10, giving it flexibility to adjust capacity as demand develops. Boeing described the agreement as the airline’s largest single-aisle order from the US manufacturer.

Deliveries are scheduled between 2033 and 2037, according to Turkish Airlines’ disclosure to Turkey’s Public Disclosure Platform. The order is part of the carrier’s strategic plan to expand its fleet and network while increasing the proportion of new-generation aircraft. Turkish Airlines has previously said its wider fleet strategy targets an average annual growth rate of about 6% and aims for a fully new-generation fleet by 2035.

The finalisation is significant because the narrow-body portion of the Boeing deal had been held up for almost a year. Turkish Airlines had completed negotiations with Boeing but made the aircraft purchase conditional on reaching an agreement with CFM International, the engine manufacturer whose LEAP-1B engines power the 737 MAX.

The dispute centred on the commercial terms of long-term engine maintenance, including pricing and the allocation of risks associated with future repairs.

Turkish Airlines had also sought to establish a maintenance facility for 737 MAX engines that would give it earlier access to advanced repair technologies.

Reuters reported earlier this month that the disagreement had put the Boeing order at risk and raised the possibility that the airline could switch the narrow-body purchase to Airbus.

The resolution removes a major obstacle for Boeing as it seeks to rebuild momentum in its commercial aircraft business. The 737 MAX remains central to Boeing’s single-aisle product line, but the manufacturer continues to face challenges in increasing production.

Boeing Chief Executive Kelly Ortberg said last week that efforts to stabilise 737 MAX production at 47 aircraft a month were taking longer than expected. The company has been dealing with supply-chain constraints, including a slower supply of wings, while it works to certify a new production line in Everett, Washington. Boeing is targeting the production of 52 737s a month next year.

For Turkish Airlines, meanwhile, the order provides additional capacity for its extensive network centred on Istanbul. The 737 MAX is designed for short- and medium-haul operations and will allow the airline to add capacity on routes where smaller single-aisle aircraft are appropriate while replacing older aircraft over time.

Boeing says the 737 MAX family can deliver fuel savings of about 20% and a similar reduction in emissions compared with the aircraft it replaces. For an airline operating a large and geographically diverse network, those efficiency gains can be significant as fuel remains one of the industry’s major operating expenses.

The order also completes the narrow-body element of a much larger Boeing purchasing plan announced in 2025. Turkish Airlines had agreed to buy 50 Boeing 787 Dreamliners and take options on another 25 aircraft while planning the 150-aircraft MAX purchase. The combined commitment could therefore reach 225 aircraft, although the Dreamliner and MAX components have been subject to separate engine and commercial negotiations.

The carrier’s Boeing relationship is already substantial. Turkish Airlines operates a mixed fleet of Boeing and Airbus aircraft and has been pursuing an aggressive expansion programme as Istanbul strengthens its position as an international connecting hub.

The 737 MAX order also gives Boeing an important customer in a strategically located aviation market. Turkish Airlines connects Europe, Asia, Africa, and the Middle East through Istanbul, making its fleet decisions significant beyond the country’s domestic market.

The agreement comes as airlines globally continue to place large aircraft orders despite supply-chain constraints and lengthy delivery schedules. Limited production capacity at the two major commercial aircraft manufacturers has made long-term fleet planning increasingly important, with carriers securing delivery positions years ahead.

Turkish Airlines has indicated that its fleet expansion will continue beyond the Boeing order. Reuters reported earlier this month that the carrier was also evaluating regional aircraft, including Embraer’s E2 family and Airbus’ A220, while considering larger wide-body aircraft such as the Boeing 777X and Airbus A350-1000 for future long-haul requirements.

The finalisation of the 737 MAX agreement, therefore, represents more than just the conclusion of a delayed purchase. It gives Turkish Airlines greater visibility over its future single-aisle fleet while securing Boeing a major long-term customer order.

With deliveries stretching into the 2030s, the deal forms part of the carrier’s broader strategy to expand its network, modernise its fleet and reinforce Istanbul’s role as a global aviation hub.

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Speaking at a media briefing last week, Fernandes said AirAsia was adept at managing cash and expected to raise more than USD 1 billion, mostly to refinance existing debt, by December or January.

“COVID was far, far worse than what we are dealing with now. We couldn’t fly then, but we can fly now, and our demand is robust,” he said.

AirAsia, like its industry peers, has suffered from a spike in jet fuel prices stemming from the Iran war.

The same phenomenon has contributed to the collapse of debt-laden US carrier Spirit Airlines in May and a Chapter 11 bankruptcy filing by Latvia’s airBaltic this month.

AirAsia’s current liabilities stood at 18.4 billion ringgit (USD 4.52 billion) as of June 30, against cash and bank balances of 954 million ringgit.

As per Fernandes, the second quarter marked the toughest period for the airline that controls about 60% of Malaysia’s domestic market.

The low-cost carrier’s CEO also forecast improving conditions as AirAsia adjusts fares to reflect higher fuel costs.

AirAsia’s fuel costs have surged 66% in the second quarter from the prior quarter to an average of USD 183 a barrel, and it has no hedging in place.

Since September 16, AirAsia’s shares have fallen about 24%, hitting the lowest level since December 2022. The stock has lost more than 70% of its value so far in 2026.

As per Reuters, Malaysia’s finance ministry has hired Alton Aviation Consultancy to assess AirAsia’s funding needs as it ‌weighs what ⁠support, if any, it could extend to the airline given its importance to the local economy.

“We’ve never received any government support in the past 25 years. And as of today, we haven’t got any, and that’s it,” Fernandes said, refuting the media reports.

He said there had been no discussions with the government, and “we do not need rescue, bailouts, or whatever.”

For Fernandes, no one can replace AirAsia’s 100 planes in the country overnight.

“You have to have our cost structure, our brand, our market, and our network,” the CEO noted.

AirAsia will be advancing discussions with financial institutions, ⁠targeting up to USD 1 billion from international debt markets plus 700 million ringgit in local credit facilities, primarily to restructure its debt.

“The refinancing is…not raising fresh capital. It’s about bringing down costs,” Fernandes added.

AirAsia also is in talks with a major global bank on a bond transaction.

Furthermore, the loss-making low-cost carrier has received an offer from a Middle Eastern investor for USD 1 billion in funding ⁠with a term sheet signed pending due diligence.

The group’s load factor, which measures an airline’s ability to fill available seats, stood at 80% in Q3, and Fernandes predicted strong bookings for the fourth quarter, with operations in Indonesia, the Philippines, and Thailand emerging as positive developments.

The carrier has been restructuring aggressively, cutting underperforming routes, returning 25 older aircraft to lessors, and renegotiating contracts with vendors to reduce costs.

Last but not least, AirAsia is also accelerating its A321LR and XLR strategy to phase out fuel-inefficient A330s, and Fernandes said the airline expects “a pretty exciting announcement” with Airbus within the next month regarding its growth and strategy.

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As per Reuters, discussions between the government and Malaysia Airlines and Batik Air have increased recently, with AirAsia’s growing financial pressures emerging as the key topic.

The airline has been hit by soaring jet fuel costs, with the latter surging 66% in the second quarter from the prior quarter to an average of USD 183 a barrel.

The talks, which involve the Southeast Asian country’s finance ministry and state-linked airport operator Malaysia Airports Holdings Berhad (MAHB), are part of broader scenario planning around AirAsia’s financial strains.

The stakeholders are also mulling options like the government providing some form of endorsement to bolster the airline’s plan to raise fresh capital from external investors.

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Through the latest move, the airline now seeks to restructure its debt pile and survive a deepening sector-wide crisis brought on by the Iran war.

AirBaltic has secured a commitment for 350 million euro (USD 405 million) in financing from lenders including Strategic Value Partners, Barclays, Hayfin Capital Management, Morgan Stanley and Oaktree Capital Management to support its operations during the restructuring.

AirBaltic CEO Erno Hilden announced at a press conference that the court must approve the funding, which carries a rate of approximately 12%.

“In the coming months, we will engage with all our stakeholders to agree on sustainable terms,” he said, adding that the company is looking at a 44 million euro profit improvement annually.

AirBaltic said flights would operate as scheduled during the court-supervised process which the flag carrier expects to finish by June 2027.

A volatile Middle East has caused jet fuel prices ⁠to shoot up significantly since March this year, sparking the air travel sector’s worst crisis since the COVID-19 pandemic.

While investors and executives have been warning that carriers with stretched balance sheets risk collapse, American low-cost carrier Spirit Airlines became the first one to shut down its operations in May 2026.

AirAsia, South-east Asia’s largest budget carrier, on the other hand, is seeking fresh capital.

“AirBaltic has been experiencing acute financial stress due to a combination of financial and geopolitical factors,” the airline’s board wrote in a filing with the bankruptcy court.

The Latvian carrier has approximately USD 583 million in funded debt and finance lease liabilities, and it owes 106 million euro in payroll taxes and airline taxes and fees. Its 2025 revenue was approximately 779 million euro.

The Latvian government holds the majority ownership of AirBaltic, which operates a fleet of approximately 50 Airbus A220-300 planes, while Germany’s Lufthansa owns a 10% minority stake.

In the lead-up to the bankruptcy filing, AirBaltic’s bondholders were due to vote on the company’s plan to raise up to 257 million euros through new super-senior debt due in February 2027, at a rate of 25%.

Latvian Prime Minister Andris Kulbergs said the Chapter 11 proceedings were initiated after bondholders with over 70% of the value of the debt decided to opt for liquidation instead.

“I view this solution as one of the best options ‌for ensuring ⁠airBaltic’s viability, as it provides the necessary tools and time to implement the restructuring plan,” Kulbergs said.

“The government is continuing to look for a strategic investor as airBaltic reduces its fleet and reorganises its obligations,” he added.

Hilden, who led Scandinavian airline ⁠SAS through its Chapter 11 proceedings from 2022 to 2024, said AirBaltic is “targeting the same process.”

The airline had aimed to grow its fleet to 100 planes and was expecting to develop transit traffic from Russia, Belarus and Ukraine through Riga.

However, the ongoing Russia-Ukraine war has also hindered the roadmap.

As per Prime Minister Kulbergs, by April 2026, AirBaltic had “burned through” 380 million euro raised via bonds issued in 2024.

Another 30 million euros in emergency government loans ran out in June. As a response, the airline was looking to lease out its excess aircraft.

“Serving Baltic and Latvian routes requires only 30 aircraft, not 100,” Kulbergs concluded.

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As per a Reuters report, the proposed conditions, which would be negotiated with Air India’s majority owner Tata Sons, could contain greater board voting power and requirements for the Indian carrier to narrow its losses.

Temasek, Singapore Airlines’ majority shareholder, is looking to stay away from the entire process. Neither would it provide the capital itself nor intervene in the carrier’s decisions concerning Air India.

While Air India is seeking about USD 1.5 billion in fresh equity from its owners, majority holder Tata had already approved a USD 1.1 billion infusion, representing its pro-rata share. Singapore Airlines, on the other hand, holds the remaining 25.1% stake in the former state-owned full-service carrier.

In a statement, Singapore Airlines said its board would carefully evaluate any request for additional capital, taking into account Air India’s business strategy, the group’s operating cash flow, and its other capital requirements.

Singapore Airline’s tough stance also comes amid the airline facing growing pressure back home to justify the increase in its investment in Air India, which posted a USD 2.33 billion loss in the financial year ended March, weighing directly on the Singaporean carrier’s profits.

While Singapore Airlines has lost money on several past overseas investments, what makes its investment in the Indian carrier another tricky prospect is the fact that, as per Tata’s estimates, the business’ turnaround could take up to a decade.

Air India recently appointed former Ethopian Airlines head Tewolde Gebremariam as its new CEO to replace former Singapore Airlines executive Campbell Wilson.

Singapore Airlines has limited formal influence over Air India. Under a 2022 merger agreement that folded its 49%-owned Indian carrier Vistara into ‌Air India, ⁠it received a single board seat, taken up by its CEO Goh Choon Phong.

However, it has a stake of over 25% in the airline, which gives it the power under Indian company law to block special resolutions covering major corporate matters, including mergers, share buybacks, and voluntary winding up.

An opposition Singaporean lawmaker called for Temasek’s funds to refrain from supporting Air India’s funding request.

As of now, Singapore Airlines’ investments in Air India will continue to be funded by its internal resources.

The venture possesses SUSD 10.48 ⁠billion (USD 8.29 billion) in cash reserves and SUSD 3.24 billion in undrawn credit lines as of the end of June.

Singapore’s Senior Minister K. Shanmugam has said while it is up to Singapore Airlines to make decisions on investing in Air India, Temasek expects the airline to make the moves “⁠responsibly.”

It is worth mentioning that Temasek has a significant exposure to India, covering sectors including healthcare, financial services, consumer and technology. The investment giant has cited the South Asian country as a key growth market in its portfolio.

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However, hubs have warned that it would take time for operations to ‌return to normal after the disruption left aircraft in “the wrong places.”

The hours-long disruption has increased the pressure upon the NATS, with airlines ramping up their criticism of Britain’s aviation infrastructures, while the Andy Burnham government, taking a grim view of the situation, has summoned Martin Rolfe, the agency’s chief, to explain the shutdown.

The disruption resulted in the cancellation of 2,000 flights, apart from leaving hundreds of thousands of passengers stranded at major airports across the European country.

Ryanair, Europe’s biggest airline, has called for Rolfe’s removal, while citing his role in the last system meltdown in August 2023, when cancelled flights cost operators 100 million pounds (USD 135 million).

Transport minister Heidi Alexander will reportedly hear directly from Rolfe after she summoned him to explain the fault, amid ​concerns over the resilience of the British aviation sector’s infrastructure and technological resilience.

As operations restarted, Heathrow Airport said passengers should check with their airline before heading to the airport, as schedules would have changed ‌due ⁠to the problems on Tuesday.

“We are expecting knock-on impacts as aircraft and crew reposition,” the UK’s busiest hub said in a statement.

“We know how frustrating this situation is and … are working closely with our ⁠local NATS team and airline partners to recover normal operations as quickly as possible.”

London Gatwick, Britain’s second busiest airport, remarked while advising passengers to ⁠check with their airline first.

While 150,000 Ryanair passengers got affected by the outage after it cancelled ⁠more than 200 flights, British Airways had to cancel and divert 100 flights, with another tens of thousands impacted.

Two of NATS’ previous operational glitches resulted in shutdowns in August 2023 and in July 2025. On both occasions, major airports, including Britain’s largest, Heathrow, got affected.

“I am seeking assurances that lessons will be learned and systems that support aviation are up to the job,” Alexander said on X (formerly Twitter).

Michael O’Leary, group CEO of Ryanair, told Reuters the outage was “an absolute rerun” of ​what happened in 2023, when a rogue flight plan caused the shutdown.

“Fire him. He’s been there since 2015. He is useless,” he said of ​Rolfe.

NATS said that the issue, which had impacted its flight data processing system, was resolved. It also dismissed talks about a potential cyber breach affecting its digital architecture.

“It was not the same issue as 2023. This one affected our flight data system at Swanwick. We will conduct a ‌full investigation ⁠to establish the root cause and identify any further action required,” a NATS spokesperson said.

“Recovery from today’s system issue has taken longer than we had hoped. Our system issue is now resolved; we are operating normally and working as hard as possible to clear the backlog of flights,” the agency further clarified on X.

The traffic control provider later said in another X update that it would take time to recover from the disruption, adding that “this ⁠has been a very complex recovery and has created difficulties for the entire aviation network.”

Rolfe also termed the cause of the disruption a new one. While speaking with the BBC Radio, he apologised for what had gone wrong without giving details of what had happened, apart from saying a cyberattack had been ruled out.

He later told Sky News that NATS had not “fully done the investigation” to find the reason behind the technical issue that caused the disruption.

“We don’t have an idea yet of exactly what went wrong,” the NATS boss remarked.

Airlines attack the NATS boss

Forgetting their fierce rivalry, European budget carriers Wizz Air and Ryanair came together to attack NATS and Rolfe while calling for an “overhaul” of the air traffic control provider.

“A critical national infrastructure provider should not repeatedly bring the aviation system to a standstill. NATS is simply not fit for purpose in its current form,” Wizz Air remarked.

“Following the 2023 collapse, we were told lessons would be learned. We were told that resilience would improve. We were told that the systems had been fixed. Yet here we are again,” Ryanair Chief Operations Officer Neal McMahon said.

As per Ryanair’s estimates, the losses from Tuesday’s outage were 3 million pounds so far, after it cancelled 260 flights affecting 48,000 passengers.

In 2024, Britain’s aviation regulator asked NATS to review its outage-related contingency plans after the automatic processing of flight plans malfunctioned a year earlier, causing chaos across the British airports.

The Civil Aviation Authority (CAA) too jumped into the action on Tuesday by “getting in touch” with NATS over the incident and expects the latter to share a full report.

“We will then consider ⁠whether any further steps need to be taken to help secure the safe reliability of the UK’s air traffic control system,” a CAA spokesperson said.

The outage, as per the data from the flight-tracking website Flightradar24, caused the cancellation of 1,300 flights to and from the United Kingdom.

“Another 177 flights got cancelled for Wednesday, nearly all of them at Heathrow, the country’s largest airport,” it added.

Another data point on the flight-tracking platform FlightAware said some 490 departures were delayed at six airports, including Heathrow, Gatwick, London City, Luton, Edinburgh, and Bristol, as of 1518 GMT Tuesday. Some 525 arrivals at those six airports were either cancelled or delayed.

British Airways on Tuesday cancelled/diverted 100 flights with tens of thousands impacted and said on Wednesday 190 flights had been ​cancelled as disruption continued.

NATS, a public-private partnership that ⁠is partially owned ​by airlines including British Airways and easyJet, pension funds, and the British government, paid its ​owners dividends of 175 million pounds in 2025.

Ryanair has decided to sue NATS at London’s High Court and is seeking over 7 million pounds over the 2023 outage.

The carrier, apart from aggressively pitching for the agency’s leadership overhaul, has called on NATS to reinvest its profits ​into performance improvements and hiring more staff.

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American, looking to increase its profitability, said the first retrofitted aircraft will begin commercial service this month from New York to Buenos Aires. American expects to complete upgrades of all 20 of its 777-300ERs sometime in 2027.

The revamped aircraft will have 144 premium seats, up from 116 under the current layout, with the total percentage rising to about 44% from 38%.

The new arrangement also includes 70 ⁠Flagship Suite business-class seats with privacy doors, along with 44 Premium Economy seats and 30 Main Cabin Extra seats, American’s extra-legroom economy product.

While the American’s current 777-300ER aircraft has 52 business-class seats and eight “Flagship First” seats to constitute the carrier’s top-tier international first-class cabin, the airline will be eliminating those seats as part of the retrofit, with the product no longer sold on 777-300ER flights for travel beginning November 19.

The retrofitting will also increase the aircraft’s capacity to ⁠330 passengers from 304. The number of standard economy seats, on the other hand, will edge down to 186 from 188.

American will be the last among the “Big Three US Carriers” to retire its first-class offerings. Delta Air Lines, in 1998, combined its international first- and business-class cabins, while United Airlines stopped selling international first class in 2018 as it transitioned its long-haul fleet to Polaris business class.

American’s retrofitted 777-300ERs, while serving long-haul markets including London, Tokyo, Sao Paulo, Buenos Aires and Sydney, will also offer upgraded in-flight entertainment, while members of American’s AAdvantage loyalty programme will get access to free high-speed Wi-Fi.

American was forced to take the call in 2022 as international customers were not buying the product, with business-class seats becoming their new favourite. Delta and United have already taken a lead over American when it comes to cashing upon premium travel.

Premium travellers generated nearly half of American’s ticketed revenue in Q2 while accounting for about 30% of its seats. Learning from that, the carrier is now looking to apply the same formula to its domestic flights too, by increasing the seats to about 40% in the coming years, up from roughly 25% now.

In the American aviation circle, revenue from higher-end products has been growing faster than from more price-sensitive offerings at some of the largest airlines, reflecting a widening divide as wealthier customers keep spending while budget-conscious travellers pull back.

And the Big Three are not alone in making changes as per the new industry trend.

Budget carrier Southwest Airlines has unveiled plans to open its first-ever airport lounges to attract higher-spending premium travellers and diversify revenue streams.

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Air China, China Eastern Airlines, and China Southern Airlines have posted combined first-half net losses of about 8.2 billion yuan (USD 1.22 billion), having warned in July about the figure potentially reaching nearly 9 billion yuan.

So severe were the losses that they ended up sharply reversing the airlines’ combined first-quarter profit of 4.82 billion yuan, which was boosted by strong Lunar New Year demand.

Flag carrier Air China reported a net loss of 2.3 billion yuan, widening from a 1.81 billion yuan loss a year earlier. China Eastern posted a loss of 2.2 billion yuan, versus a ⁠1.43 billion yuan loss in the same period of 2025. China Southern reported a loss of 3.7 billion yuan, compared with a loss of 1.53 billion yuan a year earlier.

In a desperate bid to overturn the poor financial run, Air China has decided to increase flights to Europe and North America in ⁠the second half of the year.

As per the airline’s board director, Xiao Feng,⁠ international routes, during the summer travel ⁠season, performed better for the flagship carrier than their domestic counterparts. However, the overall results did not meet expectations.

The weak results further complicate the post-pandemic recovery efforts of China’s aviation sector. For China Eastern, the trio confronted a profit environment “severely undermined” by disrupted international routes and persistently elevated jet fuel prices linked to the Middle East conflict.

Fuel costs at each of the carriers rose between 35% and 38% in the first half of 2026.

Unlike their Asian and European rivals, Chinese airlines hedge little of their fuel purchases, leaving them more exposed to oil price swings.

China Southern said in its filing there was currently “no effective means available” to manage its exposure to fluctuations in jet fuel prices.

Revenue growth was strong at the carriers, with Air China up 10.5%, China Eastern up 11.1%, and China Southern up 9.7%, which somehow compensated for these businesses.

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