The Zhitong Finance App learned that aviation stocks rose collectively. As of press release, China Eastern Airlines (00670) rose 5.24% to HK$2.51; China Southern Airlines (01055) rose 4.80% to HK$2.95; Air China (00753) rose 4.28% to HK$3.78; and Cathay Pacific (00293) rose 2.60% to HK$14.20.

According to the news, international oil prices fell sharply on the 2nd due to rising market optimism about negotiations between the US and Iran. For the aviation industry, the price of oil is the most direct variable on the profit table. In the first three quarters of this year, the three major airlines lost a total of 8.435 billion yuan, all citing a sharp rise in aviation fuel costs as the main reason for the change in performance; in the first half of the year, the total aviation fuel costs of the three major carriers exceeded 96.8 billion yuan, which is equivalent to about 37.5% of the revenue for the same period.

Wanlian Securities previously pointed out that if oil prices fall later and the core factors suppressing aviation stocks are mitigated, the sector is more resilient to repair. The total turnover of civil aviation continued to grow steadily in the first three quarters. In September, air ticket prices rose 6.5% year on year, and flight plans for the winter season declined. It is expected that ticket prices will continue to rise under volume control and insurance measures. Currently, sector valuations are at a historically low level.

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