HK Stock Market Move | Airline stocks are once again trending lower, with passenger numbers and seat occupancy rates declining during the May Day holiday. High fuel surcharges and ticket prices are affecting demand.

Airline stocks fell again. As of the time of writing, China Eastern Airlines (00670) fell by 7.28% to HKD 3.95; Capital Airport (00694) fell by 3.74% to HKD 1.8; China Southern Airlines (01055) fell by 3.98% to HKD 4.1; Air China Limited (00753) fell by 3.66% to HKD 5. On the news front, according to data from Aviation Insight, as of April 16th, the total number of flights during the May Day holiday reached 96,400, an increase of 2.9% year-on-year, but the number of passengers was only 3.5772 million, a decrease of 1.6% year-on-year, and the passenger load factor decreased by 0.8 percentage points to 24.0% compared to the same period last year. China Securities Co., Ltd. released a research report stating that this phenomenon reflects that airlines have a strong willingness to add capacity during market hotspots, but demand is somewhat suppressed by high fuel surcharges and ticket price hikes. Changjiang stated that in the short term, the increase in fuel costs due to geopolitical conflicts has a significant impact, and the current single aircraft market value of airlines is at a historical low, with limited downside risks. If the blockade of the Hormuz Strait ends, the expectation of oil price improvement, and the Middle East advances in large-scale resumption of flights, the profit expectations of airlines are expected to gradually recover. The preferred options are the three major airlines in Hong Kong and private airlines in A shares.