According to Zhitong Finance APP, the three major Chinese airlines extended their recent declines. As of press time, Air China Ltd (HK: 00753) fell 3.04% to HK$3.51, China Eastern Airlines Corp Ltd (HK: 00670) dropped 2.93% to HK$2.32, and China Southern Airlines Co Ltd (HK: 01055) declined 2.5% to HK$2.73.

On the news front, attacks on Saudi Arabia and the Strait of Hormuz have escalated simultaneously, keeping Brent crude oil at a high of $105 per barrel. Notably, due to Middle East tensions, international oil prices surged more than 30% cumulatively in the third quarter of this year. According to estimates by Guotai Haitong Securities, Q3 passenger traffic grew 3-4% year-on-year, while domestic fares including fuel costs fell about 5% year-on-year. The estimated airline fuel price rose more than 40% year-on-year. Weak summer travel demand and airlines increasing capacity at the expense of pricing limited the pass-through of fuel costs, and the industry is expected to face operational pressure.

JPMorgan pointed out that China's aviation industry underperformed the bank's expectations during the Mid-Autumn Festival and National Day consecutive holidays, with aviation continuing to lose market share to railways rather than seeing a broad recovery in aviation demand. The bank maintained a cautious view, believing that demand is entering the off-season, that increases in fuel surcharges may further suppress demand, and that elevated fuel costs continue to weigh on profitability.