HK Stock Market Move | Aviation stocks continue to decline, with China Eastern Airlines (00670) falling by 35% this month. Airlines have increased international fuel surcharges consecutively.

The aviation sector continues to decline, with China Eastern Airlines' (00670) cumulative decline exceeding 35% this month. As of the time of reporting, China Eastern Airlines fell by 6.07% to 3.56 Hong Kong dollars; Air China Limited (00753) fell by 5.16% to 4.78 Hong Kong dollars; China Southern Airlines (01055) fell by 4.21% to 4.1 Hong Kong dollars; and CATHAY PAC AIR (00293) fell by 2.18% to 12.13 Hong Kong dollars. On the news front, recently, due to the sharp increase in international aviation fuel prices, many mainstream airlines such as Juneyao Airlines, Changlong Airlines, Spring Airlines, and Xiamen Airlines have announced the upsurge of international flight fuel surcharges. CMSC previously released a research report stating that, according to the current collection mechanism, the coverage rate of aviation fuel costs is relatively high. However, in the process of collecting fuel surcharges, the formation of actual ticket prices also needs to consider consumers' affordability and the actual market supply and demand. Sealand stated that in 2026, the tightening supply and stable growth of travel demand are expected to lead to an improvement in supply and demand and high passenger load factors, which will support the bottoming out and rebound of low ticket prices, bringing high elasticity growth to airline performance. The current aviation industry is facing significant cost pressures due to the rapid increase in oil prices in the short term, but there are certain hedging measures to alleviate this pressure. Additionally, with the trend of improving supply and demand, the prospects for profit recovery and elasticity in the aviation industry's seat revenue are promising.