HK Stock Market Move | Airline stocks broadly declined; institutions expect airlines' fourth-quarter operating environment to remain under pressure amid high oil prices and weakening demand.

Airline stocks broadly declined. As of press time, China Eastern Airlines (00670) fell 4.3% to HK$2.56; Air China Limited (00753) fell 2.67% to HK$3.83; China Southern Airlines (01055) fell 2.3% to HK$2.98; CATHAY PAC AIR (00293) fell 1% to HK$14.9. On the news front, HSBC Research released a report stating that during the peak travel season in the third quarter, weighed down by surging fuel costs and weak pricing power, the quarterly profits of mainland China's three major airlines nearly evaporated, overshadowing the positive of still-resilient passenger load factors. The bank noted that the three major airlines' revenue rose 2% to 8% year-on-year last quarter, but the ex-factory price of mainland China's aviation kerosene rose 42% year-on-year, causing operating expenses to rise 14% to 18%, with all three major airlines recording operating losses. HSBC Research also said that airline data weakened in October, and it expects the fourth-quarter operating environment to remain under pressure amid high oil prices and weakening demand. It accordingly cut its profit forecasts and expects the three major airlines to record combined fourth-quarter losses of about RMB11.7 billion and combined second-half losses of RMB11.9 billion.