Aviation stocks led the declines. At the time of writing, China Southern Airlines (01055) fell 7.67% to HK$5.54; China Eastern Airlines (00670) dropped 7.12% to HK$5.22; and Air China (00753) declined 3.5% to HK$6.89. The movement follows a reminder from the Ministry of Foreign Affairs for Chinese citizens to avoid travel to Japan during the Spring Festival holiday. Data from VariFlight DAST shows that 49 flights on routes to Japan have been canceled for February.

Air China, China Eastern, China Southern, Shandong Airlines, Xiamen Airlines, and Shanghai Airlines have collectively announced an extension of their free refund and change policies for tickets on Japan-related routes until October 24. Dongxing Securities noted in a research report that with demand for Japan routes affected, some capacity has spilled over to other routes, which could more easily lead to excess capacity; therefore, airlines need to continue strengthening supply management on international routes.

Furthermore, recent volatility in oil prices and exchange rates has emerged. According to a Huachuang Securities research report, based on disclosures in the airlines' HY 2025 reports, a 10% change in oil prices corresponds to an annualized cost impact of approximately 4.3 to 5.1 billion yuan for the three major airlines, while a 1% fluctuation in the exchange rate impacts them by 1.3 to 2.6 billion yuan.