HK Stock Market Move | Aviation stocks rose in the afternoon, with continued downward oil prices helping to reduce the burden on airlines' costs. Institutions are expecting policy efforts to accelerate demand.

In the afternoon, airline stocks rose, as of the time of publication, China Eastern Airlines (00670) rose by 5.41% to HK$2.34; Capital Airlines (00694) rose by 4.74% to HK$2.65; Air China Limited (00753) rose by 3.91% to HK$4.52; China Southern Airlines (01055) rose by 1.94% to HK$3.16. On the news front, recently, oil prices have plummeted significantly due to Trump's tariff policy and OPEC+'s May production increase exceeding expectations. CITIC SEC pointed out that considering the lag of Brent crude oil changes transmitted to aviation fuel by one month, it is expected that the year-on-year decline in aviation kerosene in May may further expand. For every 10% fluctuation in oil prices, the three major airlines may reduce their fuel costs by 45.5-55.0 billion yuan by 2024, which could be the largest performance variable for listed airlines in 2025. In addition, since March, the year-on-year decline in industry ticket prices has gradually stabilized and narrowed, with Flight Butler expecting a possible 7.9% decline in ticket prices during the Qingming Festival, confirming a trend of lower pricing and looking forward to the industry's gradual transition from "industry self-discipline" to "supply-demand optimization", expecting pro-cyclical and consumption-boosting policies to be transmitted to the demand side. Huachu Securities pointed out that the logic of the supply side of airlines is still clear, with low growth rates and demand not yet showing strong momentum. In the context of "tariff hikes", if policies continue to drive demand and push for speed, along with demand-supply differentials, it may promote price elasticity. According to the 2024 annual report of the three major airlines, if ticket prices increase by 10%, the corresponding revenue increase for the three major airlines would be 121-152 billion yuan, with after-tax profit increasing by 91-114 billion yuan.