Air China Ltd., the nation's largest international airline, rose the most in three months in Hong Kong trading on speculation that Chinese carriers may add more flights to Taiwan, following the start of services last week.

The world's biggest airline by market value advanced 9.3 percent to HK$3.88 at the close. China Southern Airlines Co., which flew the mainland's first regular flight to Taiwan on July 4, gained 6.9 percent to HK$3.10.

In Shanghai trading, all five of the listed carriers serving Taiwan jumped by the 10 percent limit on hopes that a 59-year-old restriction on flights may be eased further. Chinese carriers are aiming to add more Taiwan services as they battle to cope with rising fuel costs and slowing demand.

"The market expects Chinese airlines to expand their flights to Taiwan," said Mao Ang, a Beijing-based China Galaxy Securities Co. analyst. "Adding more services will improve their business."

China Eastern Airlines Corp., the nation's third-biggest carrier, rose 4.5 percent to HK$2.33 in Hong Kong trading. Its Shanghai stock closed at 7.37 yuan. Shanghai Airlines Co. climbed 10 percent to 6.18 yuan in the city. Hainan Airlines Co. rose to 5.24 yuan.

Most Valuable

Air China's Shanghai stock rose to 9.52 yuan. The company has reclaimed its position as the world's most valuable listed carrier. Singapore Airlines Ltd. took the spot for the first time in a year last week.

Beijing-based Air China has fallen about two-thirds in both Hong Kong and Shanghai this year on concerns that rising fuel prices and slowing travel demand may crimp profit. China Southern, the nation's largest carrier, has dropped 70 percent in Hong Kong and 72 percent in Shanghai, making it the second-worst performer in the CSI 300 Index.

"Chinese airlines shares are very attractive" following the sell-off, said Martin Wang, an analyst at Guotai Junan Securities Co. in Hong Kong. "They are relatively undervalued compared to other international carriers, but the growth potential is there for the next three to five years."

Chinese airlines are able to operate 18 return flights a week to Taiwan under the current agreement. China and Taiwan are set to hold talks after the Olympics in August to discuss increasing the frequencies, Tony Su, chairman of the Taipei Airlines Association, which represents Taiwan-based carriers, said on July 4. Taiwan airlines also fly 18 flights a week to China.