Aviation Shares Slide as U.S.-Iran Tensions Persist and Oil Prices Surge Over 30% in Q3

Stock News
2 hours ago

Aviation stocks are leading the declines, with China Eastern Airlines Corporation Limited (00670) falling 6.27% to HK$2.465, Air China Limited (00753) dropping 5.57% to HK$3.73, China Southern Airlines Company Limited (01055) losing 4.97% to HK$2.87, and Cathay Pacific Airways Limited (00293) declining 2.1% to HK$14.43 as of press time.

On the news front, uncertainty surrounding the U.S.-Iran situation persists. U.S. President Trump recently stated that if a satisfactory agreement cannot be reached, he may intensify bombing after the midterm elections rather than ending the war. Separately, reports indicate that the Pentagon is deploying a third carrier strike group and additional Marine amphibious vessels to the Middle East, with an expected 9,000 to 10,000 additional U.S. troops. The relevant ships, aircraft, and personnel are expected to arrive by the end of November.

Notably, driven by geopolitical conflict, international oil prices surged more than 30% in the third quarter. Elevated oil prices will directly impact airlines' cost structures. According to historical financial reports from major airlines, jet fuel costs typically account for 30% to 40% of operating costs. In the first half of this year, the three major airlines all achieved double-digit year-on-year revenue growth, but due to multiple factors including high volatility in jet fuel prices, they remained in a state of overall losses, with combined net losses reaching 8.161 billion yuan.

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