Hong Kong Aviation Stocks Extend Losses as May Day Holiday Traffic and Load Factors Decline

Stock News
04/23

Aviation stocks in Hong Kong continued their downward trend. At the time of writing, CHINA EAST AIR (00670) fell 7.28% to HK$3.95. BEIJING AIRPORT (00694) declined 3.74% to HK$1.80. CHINA SOUTH AIR (01055) dropped 3.98% to HK$4.10. AIR CHINA (00753) decreased 3.66% to HK$5.00. According to flight data insights, as of April 16th, the total number of scheduled flights during the May Day holiday period reached 96,400, representing a year-on-year increase of 2.9%. However, passenger volume was only 3.5772 million, a decrease of 1.6% compared to the same period last year. The average passenger load factor fell by 0.8 percentage points year-on-year to 24.0%. A research report from CITIC Securities noted that this phenomenon reflects airlines' strong willingness to increase capacity during peak travel periods, but demand has been somewhat suppressed by high fuel surcharges and rising ticket prices. Changjiang Securities commented that short-term stock prices are significantly impacted by rising fuel costs due to geopolitical conflicts. They indicated that the current market capitalization per aircraft for airlines is at a historically low level, suggesting limited downside risk. If the blockade of the Strait of Hormuz ends, leading to improved oil price expectations, and large-scale flight resumptions in the Middle East progress, airline profit expectations could gradually recover. The firm's top picks are the three major Hong Kong-listed airlines and privately-owned A-share airlines.

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