China Southern Airlines reported on Friday its first quarterly profit in more than three years, as a pickup in international flights complemented a recovery in its home market.

The result, coupled with similarly encouraging figures from Air China, is helping to fan industry hopes for the big three state carriers to finally return to profit in the second half of 2023, after years of losses brought by the COVID-19 pandemic.

China Southern, based in the southern city of Guangzhou, reported third-quarter profit of 4.2 billion yuan ($573.89 million), versus a loss of 1.0 billion yuan in the prior quarter, and a loss of 6.1 billion in the year-earlier quarter.

Meanwhile, the Hong Kong-listed shares of flagship Air China rose almost 6% in their biggest jump in four months, but gave back some gains to close up 4.7%, after the airline reported its first quarterly profit in nearly four years.

Air China booked third-quarter net profit of 4.24 billion yuan on Thursday, versus a loss of 600 million yuan in the previous quarter and 8.67 billion yuan in the year-ago period.

The third of the carriers, Shanghai-based China Eastern Airlines, with a smaller fleet, is set to report earnings on Monday.

Another welcome bit of news on Friday came from the aviation regulator, which said air passenger numbers in the third quarter reached 180 million, or 2.6% higher than the level in 2019 before the pandemic, and a record for any quarter ever.

However, the number of international flights, especially to developed countries, is still markedly smaller than in 2019, said Li Hanming, an independent expert on Chinese aviation.

"Those routes are the most lucrative," Li said.

Air China and China Southern did not give a breakdown of revenue contributions from domestic and international travel.

In a client report, brokerage Jeffries said Air China's profit followed 15 quarters of losses, and turned earnings positive for the nine months of this year with a profit of nearly 800 million yuan.

Increased passenger capacity, a stable currency and investment income contributed to the profit, Jefferies added.

While domestic travel rebounded quickly to pre-2019 levels after the government abandoned its zero-COVID policy at the end of last year, international flights have been increasing only gradually.

The number of international flights with China is still just 50% to 60% of those before the pandemic, data from tracking app Flight Master showed.

Resumption of international flights also varies with destination.

By early October, the number of flights to Britain or Italy was about 110% of 2019, whereas the number to the United States, at a time of troubled ties, was 5% to 10%, industry experts said.

Airlines will further resume, and even add, international routes in the fourth quarter as they shift to new winter-spring schedules on Oct. 29.

China Eastern, for example, will restart Shanghai-Brisbane flights on Oct. 31, while Air China will resume flights between Beijing and San Francisco on Nov. 1.

China Eastern said it expected international and regional flights to recover in the new aviation season to 80% of the levels of 2019 by year-end. ($1=7.3185 Chinese yuan renminbi) (Reporting by Sophie Yu and Brenda Goh; Editing by Clarence Fernandez)