The Zhitong Finance App learned that the three major airlines continued their recent decline. As of press release, Air China (00753) fell 3.04% to HK$3.51; China Eastern Airlines (00670) fell 2.93% to HK$2.32; and China Southern Airlines (01055) fell 2.5% to HK$2.73.
According to the news, Saudi Arabia and the attacks on both sides of the strait escalated simultaneously, and Brent crude oil remained high at 105 US dollars. It is worth noting that due to the situation in the Middle East, the cumulative increase in international oil prices exceeded 30% in the third quarter of this year. According to estimates by Cathay Pacific Haitong Securities, Q3 passenger traffic increased by 3-4% year on year, and domestic fuel ticket prices fell by about 5% year on year. It is estimated that the price of fuel used by airlines increased by more than 40% over the same period last year. Due to weak demand for summer travel and the exchange of price in exchange for volume by airlines, oil price transmission is limited. It is expected that industrial operations will be under pressure.
J.P. Morgan pointed out that China's aviation industry's passenger performance during the Mid-Autumn Festival and National Day holidays fell short of expectations, and aviation continued to lose share to railways rather than a broad recovery in aviation demand. The bank maintains a cautious view, believing that demand is entering a low season, fuel surcharges will increase or further suppress demand, and high fuel costs will continue to put pressure on profits.