Aviation Stocks Decline Across the Board as Analyst Notes June Base Fares Turn Negative Year-on-Year, July Domestic Fuel Surcharge Potentially Cut by Up to 40 Yuan

Shares of aviation companies are experiencing a broad-based decline.

As of the time of writing, China Eastern Airlines Corporation Limited (HKG: 00670) fell 5.26% to HK$3.24.

China Southern Airlines Company Limited (HKG: 01055) dropped 5.56% to HK$3.40.

Air China Limited (HKG: 00753) decreased by 5% to HK$4.18.

Cathay Pacific Airways Limited (HKG: 00293) declined 1.01% to HK$11.82.

On the news front, the National Development and Reform Commission announced on June 18th that the retail price ceilings for gasoline and diesel would be lowered by 515 yuan and 495 yuan per ton, respectively.

The reduction in oil prices is expected to trigger a corresponding adjustment in fuel surcharges.

According to a forecast from VariFlight's DAST, the domestic route fuel surcharge in China for July 2026 is projected to be lowered by 20 yuan and 40 yuan, respectively.

Huatai Securities released a research note stating that June is an off-peak season for the industry, leading to a decline in airline revenue levels.

Based on VariFlight data, domestic route fares including fuel for the second week of June increased 16.1% year-on-year, but the firm's calculations indicate the base fare component turned negative year-on-year to approximately -3%.

However, following June 11th, international oil prices retreated swiftly.

This trend is expected to lead to a further decrease in China's aviation kerosene ex-factory price in July, alleviating cost and operational pressures for airlines.

Market focus will subsequently shift to the pre-sale data for the peak season in July.