Chinese Airline Sector: Potential positive impact from US-Iran ceasefire agreement on China‘s airline sector

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Chinese Airline Sector: Potential positive impact from US-Iran ceasefire agreement on China‘s airline sector

Global Research

16 June 2026ab

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EquitiesChinese Airline Sector

Potential positive impact from US-Iran ceasefire China

agreement on China's airline sector Airlines

Xin Chen

Analyst

xin.chen@ubs.com

US-Iran ceasefire agreement +86-21-3866 8864

According to news reports, US President Trump on 14 June (US time) and Pakistani Prime Beini Du

Minister Sharif on 15 June (Pakistan time) announced via social media that the US and Associate

Iran had agreed to end hostilities. Iran also officially confirmed the info. A signing S1460525090002

ceremony for a memorandum on ending hostilities is due to take place in Switzerland on betty-za.du@ubs.com

19 June. +86-213-866 8753

Jarrod Castle, CFA

Oil price surge from Middle East conflict driving losses across Chinese airlines Analyst

The sudden conflict in the Middle East has led oil prices to increase sharply from around jarrod.castle@ubs.com

+44-20-7568 8883US$60/bbl in Feb to over US$100/bbl in May. As fuel costs represent Chinese airlines'

single largest operating cost, accounting for 30-40% of the total, our sensitivity analysis Bruce Mi

on crude oil price fluctuations quantifies the earnings impact: we estimate every US$1 Analyst

per barrel rise in Brent oil reduces 2026E full-year net profit by Rmb362-426m for the Big S1460522060001

3, and Rmb50m for Spring Airlines. As a result, we assume an average monthly loss of bruce.mi@ubs.com

+86-21-3866 8851

cRMB1.2-1.5bn for each Chinese Big 3 airline in Apr to May. While this loss trend

persisted into early June, with the subsequent pullback in oil prices, we anticipate an

improvement in airlines' profitability in late June.