Falling oil prices reduce airline fuel costs, civil aviation industry profitability is expected to continue to improve

① Brent crude oil futures once fell more than 3.5% intraday, the lowest since December 2021. Boosted by the fall in international oil prices, U.S. stock airlines collectively surged overnight.
② Goldman Sachs said that falling oil prices will reduce fuel costs for airlines, air transportation and shipping, and is optimistic about COSCO Haineng and Air China China.

WTI crude oil futures once fell more than 4% in intraday trading, and the settlement price closed down 2.86%, at US$66.31/barrel. Brent crude oil futures once fell more than 3.5% in intraday trading, the lowest since December 2021, and the settlement price closed down 2.45% at US$69.30/barrel. Boosted by the fall in international oil prices, U.S. stock airlines surged sharply overnight, with JetBlue rising more than 6%, and American Airlines rising more than 5%.

Goldman Sachs said that falling oil prices will reduce fuel costs for airlines, air freight and shipping, and is optimistic about COSCO Haineng and Air China China. Huatai Transportation and Transportation Team pointed out that due to the slow recovery of production capacity of upstream aircraft manufacturers Airbus and Boeing, it is expected that my country’s aircraft growth will remain at a low level. Taking into account the fleet and utilization rate, supply growth will decline significantly in 25 years and is expected to continue in the medium to long term. Demand for domestic routes on the demand-side is expected to grow steadily, and there is still room for recovery on international routes, driving demand to pick up. Overall, the industry may face a shortage of demand, providing support for the improvement of airlines ‘revenue levels.

According to the Cailian theme library, among the relevant listed companies:

Air China ChinaIt is the largest airline in China. As of the end of June 2024, the company operated a total of 915 aircraft.

Jixiang airlinesIn 2024, the fleet size will reach 101, and the annual passenger traffic will exceed 21 million for the first time.

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