Mainland China and HK Airlines: Back to square one

Research evidence excerpt

Mainland China and HK Airlines: Back to square one

26 June 2026

Mainland China and HK Airlines Equities Aviation

Back to square one China

◆ Jet fuel has corrected 54% from its war peak, albeit still 29%

above pre-war, but this lifts prospects of lower losses in 2H Parash Jain*

Global Head of Transport & Logistics Research

◆ Soft traffic in the short-term, but falling fuel surcharges and The Hongkong and Shanghai Banking Corporation Limited

parashjain@hsbc.com.hk

summer peak should support rebound in demand +852 2996 6717

◆ Upgrade to Hold, from Reduce, for the Big 3 after 35‑38% H- DeepakAnalyst,Maurya*,Asia TransportCFA

share price decline in the past six months; prefer CX over Big 3 The Hongkong and Shanghai Banking Corporation Limited deepakmaurya@hsbc.com.hk

+852 2822 4292

Fall in fuel prices is the dominant catalyst: The US/Iran de-escalation has

Bruce Chu*, CFA

triggered a dramatic fall in oil prices, with jet fuel declining 54% from its conflict peak Analyst, Asia Transport

to cUSD110/bbl, despite 29% above the Jan-Feb (pre-war) average. For airlines The Hongkong and Shanghai Banking Corporation Limited

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

where fuel typically accounts for 30-35% of operating costs, this swing fundamentally +852 2996 6621

reshapes the profit trajectory for the rest of the year and offsets the persistent

Cathy Huang*, CFA

operational headwinds that have kept us cautious over the past quarters. Associate, Asia Transport

The Hongkong and Shanghai Banking Corporation Limited

Demand: short-term soft, but fuel-led recovery ahead: The latest traffic data cathy.m.y.huang@hsbc.com.hk

remains subdued – in week 25 (15‑21 June) total flights declined 5.4% y‑o‑y +852 2996 4506

(domestic -5.8%) and passenger volume was also down 5.4%, while load factor Kevin Li*