(Yicai) Jan. 7 -- China's civil aviation sector was profitable for the second year in a row last year, according to the industry’s watchdog, which is now turning its focus to curbing cutthroat fare competition to shore up earnings across the sector.

China’s airlines made CNY6.5 billion (USD930.8 million) between them in 2025, thanks to growth in passenger numbers, cargo volume, and mail throughput, as well lower oil prices, the Civil Aviation Administration of China said at its annual work conference yesterday. 

They lost about CNY420 billion (USD60.1 billion) between 2020 and 2023 as a result of the Covid-19 pandemic and returned to profit in 2024 after shrinking losses by CNY20.6 billion (USD2.8 billion).

Passenger traffic rose 5.5 percent to 770 million last year, while freight and mail jumped 13 percent to 10.2 million tons, the CAAC noted, adding that this year’s targets are 810 million passengers and 10.7 million tons of freight and mail.

Passenger traffic hit record highs in 2024 and 2025 after having returned to pre-pandemic levels in 2023. But to capture market share, most carriers cut ticket prices, leading to average economy class fares dropping 13 percent in 2024 and 3 percent last year, according to flight information provider Flight Master.

To prevent price wars from eroding industry profits, the CAAC’s focus this year will be on rectifying this "involution-style competition,” said Director Song Zhiyong.

The regulator will study and develop methods for investigating passenger transportation costs this year, explore setting up a fare monitoring and early warning system, and strengthen the supervision of online sales platforms, Song pointed out.

It is gathering data from carriers to calculate route-by-route operating expenses, a step intended to lay the groundwork for the new system, which will prevent fares from dropping below cost, several airlines told Yicai.

Editors: Dou Shicong, Martin Kadiev