Currency hit proves drag on airlines

China's top three carriers seen posting loss of combined $1.3 billion on weaker yuan

China's three biggest airlines are poised to report losses totaling 8.5 billion yuan ($1.3 billion) from currency swings this year as a weaker yuan proves a drag amid rising traffic and cheaper fuel. The silver lining: the losses are narrowing.

Flagship carrier Air China Ltd may face 3 billion yuan in foreign-exchange losses, while China Southern Airlines Co, Asia's biggest by passengers, is looking at a potential hit of 4 billion yuan and China Eastern Airlines Corp may lose about 1.5 billion yuan, according to Capital Securities Corp. That compares with a combined loss of 16.2 billion yuan in 2015. The carriers are scheduled to announce their first-half earnings this week.