HK Stock Market Move | Sharp rise in oil prices to erode airline profits. China Eastern Airlines (00670) fell more than 4%. Air China Limited (00753) fell more than 2%.

Airline stocks continue to be under pressure. As of the time of writing, China Eastern Airlines (00670) fell by 4.22% to HK$2.95; Air China Limited (00753) fell by 2.49% to HK$3.92; China Southern Airlines (01055) fell by 2.1% to HK$3.27. On the news front, due to the soaring geopolitical risk premium and concerns about market supply, the international oil market saw a sharp rise on July 13, with the two major benchmark crude oil futures approaching a 10% increase. Earlier, US President Trump announced on social media that the US would resume naval blockade on Iran and impose a 20% fee on all goods passing through the Strait of Hormuz. It is reported that fuel is one of the major costs for airlines, with data from multiple airlines' 2025 annual reports showing that fuel costs generally account for about one-third of operating costs. Juneyao Airlines previously announced that it expects to achieve a net profit attributable to the parent company owner of 140 million to 210 million yuan in the first half of 2026, a year-on-year decrease of 58.46% to 72.30%. This is mainly due to the impact of changes in the international energy market situation, with a significant year-on-year increase in aviation fuel prices in the second quarter, directly pushing up the company's current core operating costs, leading to a loss in the second quarter.