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华泰证券:民航旺盛需求延续 期待小长假表现

Huatai Securities: Strong demand for civil aviation continues to look forward to small holiday performance

Zhitong Finance ·  09/20/2023 07:47

The Zhitong Finance App learned that Huatai Securities released a research report saying that in August, demand for civil aviation continued to be strong, and the passenger occupancy rate further increased month-on-month. The volume and price in the domestic market rose sharply during the short-term peak summer travel season. Profits are expected to break through in the third quarter, and strong demand is expected to continue during the Mid-Autumn Festival and National Day holiday, continuously verifying the logic of the boom in the civil aviation industry. In the medium to long term, the bank believes that demand is resilient, and that the slowdown in fleet growth is highly predictable. China's airlines are expected to make full use of the fare flexibility brought about by the relaxation of full economy class fares, driving up the profit center. We recommend the aviation sector, which continues to rise in prosperity.

The main views of Huatai Securities are as follows:

The scale of passenger transportation in the industry reached another record monthly high, and the passenger occupancy rates of the three major airlines increased slightly from month to month

According to data from the Civil Aviation Administration, the scale of passenger traffic reached another record high in August. The industry carried 63.964 million passengers, an increase of 4.5% over the same period in 2019. Passenger traffic on domestic routes in China exceeded 11.2% in the same period in '19; passenger traffic on international routes recovered to 52.0% in the same period in '19. Strong demand from the industry led to a further increase in the operations of the three major airlines. The overall supply/demand of the three major airlines recovered to 106%/97% in the same period in 2019 (104%/99% in July), up 1.8%/2.0% from the previous month, and the passenger occupancy rate was 78.4%, up 0.2 pct from the same period in '19. However, it is still 6.9 pct lower than the same period in '19.

The occupancy rate for lucky spring and autumn has further increased, close to the same period in '19

The passenger occupancy rate of the small to medium airlines increased slightly from month to month, and is still clearly better than that of the three major airlines. Supply/demand in Chunqiu and August recovered to 126%/124% (July 124%/125%), with a passenger occupancy rate of 92.5%, an increase of 0.2 pct over the previous year, 1.4 pct lower than the same period in '19 (0.6 pct higher in July); its domestic passenger occupancy rate in China was 92.8%, 1.5 pct lower than in the same period in '19, and the international passenger occupancy rate was 90.7%, up 3.8 pct from the same period in '19, 3.1 pct lower than in the same period in '19. In auspicious August, supply/demand recovered to 130%/127% (July 125%/127%), with a passenger occupancy rate of 87.7%, an increase of 0.4 pct over the same period in '19, 1.5 pct lower than in the same period in '19 (1.2 pct higher in July); its domestic passenger occupancy rate in China was 88.2%, 2.1 pct lower than in the same period in '19, 2.1 pct lower than in the same period in '19, and the international passenger occupancy rate was 83.5%, up 5.1 pct from the same period in '19.

Strong demand during the Mid-Autumn Festival and National Day holiday is expected to continue, continuously verifying the logic of improving supply and demand

In September, civil aviation entered an off-season, and high-frequency data such as flight volume declined. According to accurate flight data, as of September 16, China's airlines operated an average of 13,806 flights per day, returning to 93.3% in the same period in 2019. Compared with the recovery level of the July-August summer travel season, the China/International+ region recovered to 103.0%/49.5%, respectively. Compared with the July-August summer travel season, the recovery level was -9.8/+0.8 pct, respectively. However, strong demand during the Mid-Autumn Festival and National Day holidays is expected to continue, demonstrating its resilience. According to the Civil Aviation Administration's forecast, the Mid-Autumn Festival and National Day holiday will guarantee about 14,000 domestic passenger flights and 1.96 million domestic passengers, respectively, an increase of 18% and 17% over the 2019 National Day holiday. The bank believes that the logic of improving the supply and demand of civil aviation will continue to be verified, laying the foundation for increasing the medium- to long-term profit center.

Risk warning:The recovery in demand fell short of expectations, market competition intensified, oil exchange fluctuated, high-speed rail speeded up, safety incidents, and the decline in subsidies exceeded expectations.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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