Spring Airlines stock faces fuel pressure despite strong Q3 traffic

Spring Airlines reported resilient operating growth in its third quarter, but higher fuel costs and weaker fares reduced profitability. A report by Shenwan Hongyuan Research, republished by Futu on October 31, said the airline's supply and demand growth outpaced the broader industry in the third quarter.

Growth outpaced the industry

Spring Airlines generated RMB 7.02 billion in third-quarter revenue, up 8.5 percent year over year. Net profit attributable to shareholders fell 31.4 percent to RMB 800 million, while revenue for the first nine months reached RMB 19.35 billion, an increase of 15.4 percent.

Available seat kilometers rose 8.9 percent and revenue passenger kilometers increased 10.3 percent. The load factor improved by 1.2 percentage points to 93.7 percent, a record level, as passenger demand expanded despite challenging industry conditions.

Fuel costs pressure margins

Higher jet fuel prices and lower fares offset part of the operating improvement. The report said domestic jet fuel ex-factory prices rose 42 percent year over year in the quarter, pushing unit operating costs 11 percent higher. Gross margin declined by 8.4 percentage points to 15.3 percent, while net profit margin fell by 6.6 percentage points to 11.4 percent.

Shenwan Hongyuan Research raised its assumption for 2026 jet fuel price growth to 40 percent from 35 percent and cut its forecasts for attributable net profit for 2026 through 2028. The report retained an "Add" rating, while highlighting demand, oil-price and exchange-rate risks.

Fleet expansion continues

The fleet reached 140 aircraft at the end of the third quarter, six more than at the end of 2025. Spring Airlines planned to add seven A320neo aircraft and retire one A320ceo during 2026, supporting lower fuel consumption and continued capacity growth.

Spring Airlines operates domestic and international passenger services, along with travel-related products, flight add-on services and cargo transportation. Its official website promotes air tickets, hotel packages, baggage, onboard meals and other travel services through its China-based airline platform, as described by the Spring Airlines website. The carrier competes with larger Chinese airlines including Air China, China Eastern Airlines and China Southern Airlines, while maintaining a more focused low-cost position.

China's airline shares trade within the broader environment tracked by the Shanghai Composite.

Find more news and analyses on Spring Airlines stock.