On June 15, Air China (00753.HK) rose 7.21% in regular trading, trading at HK$4.9 per share, with turnover of HK$125 million. The rally was part of a broad sector-wide surge as the airline industry reacted to major geopolitical developments over the weekend.

On the news front, former US President Trump announced that a US-Iran agreement is planned for signing on June 14, with the Strait of Hormuz set to reopen immediately upon completion. This follows weeks of escalating Middle East tensions that had pushed Brent crude above $95 and severely pressured airline operating costs. IATA had previously slashed global aviation industry profit forecasts from $410 billion to $230 billion, citing fuel expenditure increases of nearly 39% year-over-year.

Within the Airlines sector, the overall sector rallied sharply. Among individual stocks, China Southern Air up 9.42%, China Eastern Air up 8.48%, and Cathay Pacific Air up 4.13%. Analysts noted that fuel accounts for 30%-40% of airline operating costs, meaning a 5-10% decline in oil prices could deliver significant profit elasticity for carriers.

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