HK Stock Market Move | Aviation stocks rise in early trading: China Eastern Airlines (00670) up more than 4%, China Southern Airlines (01055) up more than 3%

Aviation stocks rose in early trading. As of the time of writing, China Eastern Airlines (00670) rose by 4.64% to 4.06 Hong Kong dollars; China Southern Airlines (01055) rose by 3.37% to 4.3 Hong Kong dollars; Air China Limited (00753) rose by 3.19% to 5.18 Hong Kong dollars; CATHAY PAC AIR (00293) rose by 2.24% to 11.87 Hong Kong dollars. On the news front, the situation in the Middle East was uncertain within 72 hours over the weekend. The Strait of Hormuz went from "completely open" to closed again, the US detained an Iranian cargo ship, Trump threatened to destroy Iranian infrastructure, Iran refused to confirm its participation in new negotiations, and international oil prices fluctuated significantly. As of the time of writing, Brent crude oil was hovering around $94 per barrel. In addition, according to Flight Manager predictions, during the May Day holiday in 2026, there will be nearly 16,300 daily flights, an expected increase of 0.4% compared to 2025, and the number of civil aviation passengers will be approximately 11.359 million, close to 2.272 million per day, with an expected increase of 1.9% compared to 2025. Haitong Cathay Pacific believes that recent fare increases have had limited impact on passenger flows, and the impact of oil prices may be significantly less than feared, indicating a reverse opportunity. On April 5, 2026, domestic flight routes significantly increased fuel surcharges. Recently, domestic ticket prices have also increased by over 100 yuan compared to last year. The bank estimates that domestic ticket prices including fuel have increased by over 20% compared to last year, covering the rise in oil prices to a high extent. The recent decline in passenger flows and flight cancellations has been limited, with high passenger load factors. It is recommended to pay attention to the early booking situation for the May Day holiday period. If the trends continue, there may be unexpected transmission of pressure from oil prices.