China Southern Airlines, the nation's largest carrier, and other Chinese airlines narrowed their combined first-quarter loss on higher fuel surcharges and rising passenger numbers.

The country's airlines had a combined loss of 820 million yuan, or $110 million, in the three months ended March 31, 1.28 billion yuan less than a year earlier, the General Administration of Civil Aviation said Tuesday. Sales rose 20 percent to 40.5 billion yuan, while costs climbed 17 percent to 41.3 billion yuan.

Higher ticket surcharges allowed Chinese airlines to pass more of their fuel costs on to passengers, while economic growth spurred a 16 percent rise in traveler numbers. A stronger yuan may also help the carriers post a full-year profit, said Guo Dongmou, an analyst at China Merchants Securities in Shenzhen.

"The next five years will be a golden period for Chinese carriers," Guo said.

The yuan has strengthened 3.9 percent against the dollar over the past year, cutting the value of Chinese airlines' dollar-denominated debt.

China's airlines have struggled to turn rising passenger numbers into profits because of factors including inefficient air-traffic management and high airport charges, according to the International Air Transport Association, which represents some 250 airlines worldwide.

Inefficient airspace design in the Pearl River Delta is costing airlines, predominately Chinese ones, 1 million Hong Kong dollars, or $130,000, a day, IATA said in a statement Wednesday. China also has some of the highest airport charges in Asia outside of Japan, it added.

Chinese carriers filled 72.7 percent of available seats in the first quarter, 1.2 percentage points more than a year earlier, the regulator said.