China Southern Airlines (01055) stock plummeted 5.17% during Monday's intraday trading session, extending recent losses for the Hong Kong-listed aviation stock.

The sharp decline comes as jet fuel prices in the Asia-Pacific region have surged dramatically, with data from the International Air Transport Association showing average prices reached $204.95 per barrel recently - representing a 16.6% increase from the previous week and a staggering 129.8% surge compared to the previous month's average. Chinese carriers like China Southern Airlines face substantial cost pressures since fuel accounts for approximately one-third of their operating expenses and they have no hedging mechanisms in place to mitigate price volatility.

J.P. Morgan maintains a cautious outlook on Chinese airlines until there is greater clarity on oil price trends, noting that the rapid rise in aviation fuel costs has significantly outpaced global benchmark Brent crude oil prices. The investment bank's analysis suggests that continued high fuel costs could pressure airline margins despite what it describes as the strongest supply-demand environment in over a decade for Chinese carriers.