HK Stock Market Move | The three major airlines came under pressure this morning as Middle East tensions tightened and oil prices jumped again. Oil price pass-through is limited, and the industry is expected to face operational pressure.

The three major airlines came under collective pressure this morning. As of press time, Air China Limited (00753) fell 3.14% to HK$3.705; China Southern Airlines (01055) dropped 2.64% to HK$2.995; China Eastern Airlines (00670) declined 2.06% to HK$2.615. On the news front, Middle East tensions have tightened once again. On the evening of September 13 local time, Oman's Foreign Ministry announced that a regional meeting originally scheduled for the 14th in Salalah, a port city in southern Oman, would be postponed. In addition, Saudi Arabia said its East-West oil pipeline had been attacked multiple times and that preventive shutdown measures had been taken. Sources noted that the disruption to Saudi pipelines could result in the loss of 4% of global oil supply. Affected by this, international oil prices jumped during Asian trading hours, with Brent crude once touching $108. Guotai Haitong pointed out that airline fuel prices in Q3 rose more than 40% year-on-year. Weak summer travel demand, combined with airlines adding capacity and trading price for volume, led to limited oil price pass-through, and the industry is expected to face operational pressure. In addition, the National Day holiday is still in the early pre-sale stage. Observed hotel bookings rose more than 10% year-on-year, reflecting strong demand for private travel. The effect of extending holidays before and after the festival is significant, which may boost medium- and long-haul air travel, but will affect business travel before and after the holiday, and staggered travel may affect peak ticket price performance.