China Galaxy Securities: Q3 Travel Demand May Recover as Oil Prices Ease

China Galaxy Securities said oil prices have been gradually falling, which could help China’s travel-related sectors recover in the third quarter, according to Jiemian News. The brokerage said a sharp rise in oil prices lifted travel costs and hurt the broader travel chain in the second quarter. Based on high-frequency data, it said the impact of oil prices and weather was particularly evident from May to early June. In weeks 22–23 of 2026 (late May to early June), reduced airline capacity led to a double-digit decline in domestic civil aviation passenger trips. As oil prices eased from mid-June, the decline in passenger trips narrowed to a single-digit range in weeks 24–25 of 2026 (mid-to-late June). The report added that in July, China’s domestic aviation fuel surcharge and gasoline prices are expected to fall further to levels seen before the U.S.-Israel-Iran conflict, and with an autumn holiday approaching, third-quarter passenger-trip growth is expected to turn positive, supporting a marginal earnings improvement across the travel chain.