Aviation stocks in Hong Kong continued their decline, with CATHAY PAC AIR (00293) falling 4.89% to HK$12.46, CHINA EAST AIR (00670) down 2.44% to HK$4.81, AIR CHINA (00753) dropping 1.77% to HK$6.12, and CHINA SOUTH AIR (01055) decreasing 1.33% to HK$5.18. The downturn follows military actions by the United States and Israel against Iran, prompting several Middle Eastern nations to close airspace. Three major aviation hubs have fully or partially suspended operations, stranding local travelers and disrupting global flight schedules, leading to passenger backups at airports worldwide. Daiwa noted that escalating military conflicts could further disrupt global supply chains as shipping and airline services are halted in affected regions. HSBC Research highlighted that Middle Eastern carriers account for 13% of global air cargo and 9% of passenger traffic in 2025, but the impact may be broader when considering foreign airlines. The bank warned that rising oil prices would erode profits, particularly for Asian carriers with limited hedging. A 10% increase in oil prices could reduce profits for mainland Chinese airlines by approximately 68%. Analysts added that while airlines typically engage in fuel hedging, escalating fuel costs, flight cancellations, and rerouting expenses remain significant operational pressures.