Mainland China and HK Airlines Demand fades, fuel bites

Research evidence excerpt

Mainland China and HK Airlines Demand fades, fuel bites

11 June 2026

Mainland China and HK Airlines Equities Aviation

Demand fades, fuel bites China

◆ High-frequency data confirms a clear softening in domestic air

Parash Jain*

travel demand in China, with falling aircraft utilization Global Head of Transport & Logistics Research

The Hongkong and Shanghai Banking Corporation Limited

◆ We see large 2Q losses for the Big 3 given limited fuel pass- parashjain@hsbc.com.hk

+852 2996 6717

through; share price reaction to Swire’s CX CB looks overdone Deepak Maurya*, CFA

Analyst, Asia Transport

◆ Retain Buy on CX; retain Reduce on A and H shares for Air The Hongkong and Shanghai Banking Corporation Limited

China, CEA and CSA on high fuel price and weak pricing deepakmaurya@hsbc.com.hk+852 2822 4292

Bruce Chu*, CFA

Demand weakness confirmed: Tongcheng guided for a double digit y-o-y decline in 2Q Analyst, Asia Transport

domestic air traffic, as price-sensitive travellers cut low-season trips amid higher fares. The Hongkong and Shanghai Banking Corporation Limited

bruce.y.h.chu@hsbc.com.hk

BCIA’s May domestic traffic fell 6% y-o-y, and Flight Master data (from 27 April to 7 June) +852 2996 6621

showed air pax volume down 7% y-o-y, with domestic flights -8% and int’l -3%. Load Cathy Huang*, CFA

factor (LF) was flat at 84% in the period, but aircraft utilisation fell 0.7hrs/day to just 7.2hrs, Associate, Asia Transport

indicating capacity cuts are insufficient to offset demand weakness. These data points The Hongkong and Shanghai Banking Corporation Limited cathy.m.y.huang@hsbc.com.hk

suggest demand destruction from elevated fuel surcharges and higher fare levels. +852 2996 4506

Dragon Boat festival offers only marginal support: A RMB10-20 fuel surcharge cut KevinAssociateLi*