Air China's stock price plummeted 5.01% during the intraday trading session on Thursday. The decline was part of a broader sell-off in aviation stocks.
The sharp drop followed U.S. President Trump's televised address on the Middle East situation, where he warned of delivering a severe strike against Iran and threatened to bomb local power plants if an agreement is not reached. This hardened rhetoric dampened market hopes for a swift end to the conflict, triggering a significant surge in international oil prices.
As fuel costs constitute approximately 35% of airline operating expenses, the spike in oil prices is expected to substantially impact airline profitability, leading to the sell-off in aviation stocks including Air China.
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