Beijing: China’s top three airlines are bracing for a further margin squeeze as softer travel demand pressures passenger yields and a weakening yuan currency inflates costs, analysts said, as many of them slashed their annual profithe outlook revision—for which analysts also cited an economic slowdown amid a US-China trade war and fears of rising oil prices—comes after China Southern Airlines, Air China and China Eastern Airlines turned in lower net profits for the January-June period last week, erasing first-quarter gains.

China Southern, the country’s largest carrier by passenger numbers, posted a 20.9 percent year-on-year drop in profit to 1.69 billion yuan ($238 million), while China Eastern posted a 14.9 percent drop to 1.94 billion yuan.

Air China, the country’s flagship carrier, saw a smaller 9.5 percent drop in net profit to 3.14 billion yuan due to positive returns from its investment in Hong Kong’s Cathay Pacific Airways Ltd, which swung to its first profit for the January-June period since 2016.