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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 Citi: "May Day Golden Week" Travel Data May Be Diverted by Spring Break in Some Regions; Remains Buy on Trip.com Group Limited (TCOM.US) and TONGCHENGTRAVEL (00780.HK)
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)  -0.340 (-1.918%)    Short selling $20.82M; Ratio 21.123%   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)  0.000 (0.000%)    Short selling $10.71M; Ratio 18.796%   (601111.SH)  +0.080 (+1.133%)   , CHINA EAST AIR (00670.HK)  +0.020 (+0.488%)    Short selling $9.89M; Ratio 25.813%   (600115.SH)  +0.070 (+1.577%)   and CHINA SOUTH AIR (01055.HK)  +0.010 (+0.235%)    Short selling $2.90M; Ratio 9.644%   (600029.SH)  +0.020 (+0.357%)   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 2026-05-13 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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