Aviation stocks in Hong Kong continued their recent decline, with China Eastern Airlines (00670) falling 5.95% to HK$3.48, China Southern Airlines (01055) down 4.43% to HK$3.88, Air China (00753) dropping 3.98% to HK$4.58, and Cathay Pacific Airways (00293) decreasing 2.71% to HK$11.84 at the time of writing. According to data from the International Air Transport Association, the average jet fuel price in the Asia-Pacific region reached $204.95 per barrel between the 14th and 20th, marking a 16.6% increase from the previous week and a surge of 129.8% compared to the previous month's average. Reports indicate that the pace and magnitude of the rise in aviation fuel prices have significantly exceeded the global benchmark Brent crude oil. Last Thursday, Brent crude settled at $108.65 per barrel, having risen approximately 50% since the onset of Middle East conflicts. J.P. Morgan previously noted in a research report that Chinese airlines are entering their strongest supply-demand environment in over a decade. However, the risk of conflict between Iran and the U.S. has emerged as a dominant short-term risk, with Brent crude surging about 50% to $115 per barrel. Chinese carriers, which have no hedging in place, face substantial cost pressures as fuel accounts for roughly one-third of their operating expenses. The bank's base case forecasts oil prices at $80 per barrel for 2026-2027, which would likely result in the three major mainland airlines recording losses or nearing break-even in 2026. J.P. Morgan maintains a cautious outlook until there is greater clarity on oil price trends.