- In early Asian trading, Brent Crude oil futures prices fell, driven by optimism over a potential agreement between the US and Iran. International oil prices expanded their decline to 1.00%, quoted at $91.757 per barrel, alleviating market concerns about supply disruptions due to geopolitical tensions.
- The aviation sector of the Hong Kong stock market collectively rebounded, with China Eastern Airlines (00670:HK) leading the rise by over 6%, while Air China (00753:HK) and China Southern Airlines (01055:HK) saw gains approaching 4%. Cathay Pacific (00293:HK) also achieved a gain of over 3%.
- As the Dragon Boat Festival holiday in 2026 (June 19-21) approaches, closely followed by the peak summer season, the travel demand from students finishing exams and family trips is expected to be released in concentration. The market anticipates that high ticket prices will receive strong support, and combined with the low base effect of 2025, the summer 2026 air ticket prices are likely to continue high growth.
Cost Pressure Temporarily Eased
Influenced by expectations of US-Iran diplomatic progress, the global energy market's supply premium has declined. During the Asian trading session, Brent crude oil futures prices fell below a key level, dropping to $91.757 per barrel. As oil prices are one of the main variable costs for airlines, their movement at critical points directly alleviated the market's pessimistic expectations for airlines' second-quarter performance. Analysts point out that if geopolitical tensions further ease, both airline fuel surcharges and fuel cost lines will decrease, directly expanding the profit margins of major airlines.
Peak Season Overlap Drives High Ticket Prices
On the demand side, the 2026 Dragon Boat Festival holiday is scheduled from June 19 to 21, almost seamlessly connecting with the subsequent long summer holiday. The strong travel desire from students finishing exams and family trips is expected to trigger a new travel peak. Thanks to the temporarily tight supply-demand relationship, major airlines have significantly improved their pricing power on core routes, and the market generally expects that both the passenger load factor and average ticket prices during this summer's travel season will remain at high levels.
Base Effect Amplifies Performance Flexibility
Shenwan Hongyuan Research points out that looking back at the same period in 2025, the domestic civil aviation market was affected by local supply-demand mismatches, resulting in a relatively low base. Entering 2026, with the further recovery of international route networks and the normalization of domestic business travel, this low base effect will significantly amplify the year-on-year growth rate of this summer's transportation cycle. Institutional estimates suggest that if June's civil aviation passenger volume growth outpaces seasonal norms, the year-on-year revenue growth of major airlines could reach double digits.
Institutions Reassess Long-Term Super Cycle Logic
From an overall industry cycle perspective, several mainstream financial institutions believe that the current aviation sector is in a strategic window period of short-term pressure release and medium-term prosperity. Guotai Haitong stated in its latest research report that short-term oil price fluctuations caused by geopolitical tensions have not shaken the underlying logic of the aviation industry entering a super cycle. On the contrary, the previous stock price corrections due to high oil prices and off-season factors have provided an opportunity for long-term funds to make contrarian investments. If the deployment of international route capacity continues to optimize, the sector's valuation center is expected to experience a systematic rise.
