Hong Kong-listed aviation stocks rebounded again as of press time, $CHINA EAST AIR (00670.HK)$ 、$CHINA SOUTH AIR (01055.HK)$ with gains exceeding 6%. $AIR CHINA (00753.HK)$ Surged nearly 5%.
On the news front, U.S. President Trump stated in a recent interview that the war between the United States and Iran has “ended.” Influenced by the easing tensions in the Middle East, international oil prices fell sharply on April 14. By the close of trading that day, WTI crude oil futures were at USD 91.28 per barrel, down 7.87%; Brent crude oil futures were at USD 94.79 per barrel, with a drop of 4.6%. Fuel costs are known to be the largest expense for airlines.
Changjiang Securities released a research report stating that following the implementation of the fuel surcharge, the revenue increase in the domestic market exceeded expectations. Considering the 73.1% year-on-year rise in the ex-factory price of domestic aviation kerosene, which drove up unit costs by 26%, the increase in unit seat revenue almost fully offset the cost pressures brought by rising oil prices, with the first week’s data showing better-than-expected performance. However, the rise in prices still negatively impacted downstream consumers, with some routes experiencing sluggish price increases. Airlines opted to suspend flights, dragging down utilization rates.
Editor/Jayden