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<Research> HSBC Research: Mainland Travel Demand Persists but Shifts to Rail; Big Three Airlines Expected to Post Losses in 2Q26
HSBC Research said in a report that overall travel demand in Mainland China during the May Day holiday remained intact, but due to high fuel surcharges, average airfares rose 9.7% ...
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<Research> HSBC Research: Mainland Travel Demand Persists but Shifts to Rail; Big Three Airlines Expected to Post Losses in 2Q26
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HSBC Research said in a report that overall travel demand in Mainland China during the May Day holiday remained intact, but due to high fuel surcharges, average airfares rose 9.7% YoY. Aviation performance lagged behind rail, with average daily air passenger traffic falling 5.7% YoY during the period, while average daily rail passenger traffic increased 4.6% YoY.

The broker expects the three major domestic airlines to return to losses in 2Q26. It estimates that for every 10% increase in fuel prices, their full-year combined losses could widen by an average of 38%, and return on equity could be dragged down by 7.8 ppts.

Related News M Stanley Cuts TP on Three Major Chinese Airlines, Sector Upcycle Seen Delayed to 2027
On stocks, the broker assigned Trip.com Group Limited (TCOM.US)      a Buy rating, as it benefits from growth in long-haul and cross-border travel. It also gave TONGCHENGTRAVEL (00780.HK)  -0.620 (-3.580%)    Short selling $24.81M; Ratio 16.798%   a Buy rating, citing its solid growth prospects in lower-tier domestic markets and margin recovery. The asset-light models of both companies shield them from the impact of rising fuel costs.

In contrast, the broker rated AIR CHINA (00753.HK)  -0.190 (-3.808%)    Short selling $18.19M; Ratio 13.781%   (601111.SH)  -0.280 (-3.989%)   , CHINA EAST AIR (00670.HK)  -0.240 (-6.091%)    Short selling $12.10M; Ratio 13.311%   (600115.SH)  -0.210 (-4.839%)   and CHINA SOUTH AIR (01055.HK)  -0.180 (-4.380%)    Short selling $5.90M; Ratio 7.457%   (600029.SH)  -0.120 (-2.186%)   as Reduce, as they face multiple structural headwinds, including increased price sensitivity among Chinese customers, weak pricing power, rising fuel costs without hedging, and limited ability to pass through higher ticket prices. (ss/j)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-15 16:25.) (A Shares quote is delayed for at least 15 mins.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)

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