Shares of aviation companies are experiencing another downturn.

China Eastern Airlines Corporation Limited (HKG: 00670) has dropped 4.11% to HK$3.27.

Air China Limited (HKG: 00753) has declined 3.37% to HK$4.30.

China Southern Airlines Company Limited (HKG: 01055) has fallen 3.33% to HK$3.48.

Cathay Pacific Airways Limited (HKG: 00293) has decreased 2.01% to HK$12.70.

This decline is linked to rising fuel costs attributed to geopolitical tensions.

The International Air Transport Association (IATA) has revised its forecast for the global airline industry's net profit this year to $23 billion, significantly lower than its previous projection of approximately $41 billion.

IATA also anticipates the industry's total fuel expenditure will rise to around $350 billion, marking a nearly 39% year-over-year increase.

Furthermore, IATA warns that persistently high fuel costs could lead to smaller airlines facing bankruptcy or being acquired by larger carriers over the next two years.

An analysis report from Cathay Pacific's associated securities firm noted that travel demand during the May holiday period was weaker than expected due to the timing of the spring break.

The report added that airlines' ability to pass on higher oil costs is limited during the typically slower post-holiday period in May, with domestic aviation fuel prices surging 111% year-on-year that month, putting pressure on industry operations.

While the domestic aviation fuel ex-factory price was lowered by 15% in June, which aligned with expectations, the coverage ratio of the domestic fuel surcharge relative to oil prices improved compared to May.

The report suggests that the anticipated start of the summer travel season after the conclusion of the secondary school entrance exams is expected to bring a recovery in supply and demand alongside a potential decline in oil prices, which should enhance airlines' ability to pass on fuel costs.