HK Stock Market Move | Airline stocks collectively retreated, fuel surcharges raised as scheduled, institutions say domestic demand has limited capacity to absorb overall ticket price increases.

Airline stocks collectively retreated. As of press time, CHINA SOUTH AIR (01055) fell 3.96% to HK$3.035; CHINA EAST AIR (00670) fell 3.82% to HK$2.645; Air China Limited (00753) fell 3.43% to HK$3.94; CATHAY PAC AIR (00293) fell 1.73% to HK$15.32. On the news front, starting November 5, the levy standards for fuel surcharges on domestic route passenger transport were adjusted. For segments of 800 kilometers (inclusive) or less, a fuel surcharge of RMB80 is collected from each adult passenger, while for segments over 800 kilometers, a fuel surcharge of RMB140 is collected from each adult passenger, up by RMB30 and RMB50 respectively from before. Changjiang noted that raising the surcharge helps airlines pass on jet fuel costs, but also directly raises the total price of passenger travel. As of November 7, the domestic seven-day moving average all-in fare rose 12.1% year-on-year, while the bare fare after deducting fees on a daily basis fell 0.5% year-on-year, and domestic passenger volume fell 3.5% year-on-year. Bare ticket prices were basically flat year-on-year, and the supply-demand relationship in the domestic market improved month-on-month, but the main lever for airlines to improve revenue currently remains the surcharge, and domestic demand has limited capacity to absorb overall ticket price increases.