Haitong Securities released a research report saying that the aviation industry's recovery trend has been established, and the cycle is gradually rising. The increase in domestic demand has established a solid foundation for the recovery of airline performance.
The Zhitong Finance App learned that Haitong Securities released a research report saying that the aviation industry's recovery trend has been established, and the cycle is gradually rising. The increase in domestic demand has established a solid foundation for the recovery of airline performance. With the easing of international relations and the gradual friendliness of policies such as entry and exit visas, demand for international air travel will pick up further in '24; in addition, ground support and airline capacity at overseas airports will gradually recover, and international flights are expected to be further repaired in '24. There is a high degree of certainty that China's airlines will slow down the introduction of capacity in the long term; travel confidence will continue to recover, and they are optimistic that the long-term investment logic of the aviation industry will not change in the future (that is, an improvement in the supply and demand pattern, and the marketization of ticket prices), and wait for the economy to recover. The airline profit center is expected to rise in '24. Focus on investment opportunities in the aviation sector, and recommend Spring Airlines (601021.SH), HNA Holdings (600221.SH), Juneyao Airlines (603885.SH), and Air China (00753).
In February, industry demand improved month-on-month, and passenger occupancy rates recovered steadily
According to Haitong Securities, the total supply and demand of the five listed airlines in February (Air China, China Eastern Airlines, China Southern Airlines, Spring Airlines, and Juneyao Airlines) each increased 1.5%/7.8% month-on-month (Air China data is the same as in the same period below), about 116.0%/115.2% in the same period in '19, and passenger occupancy rates rose 4.9 percentage points to 84.5% month-on-month, down 0.5 percentage points from the same period in '19.
Specifically, domestic supply and demand each increased 2.2%/7.7% month-on-month, up 31.8%/30.8% from the same period in '19, and the passenger occupancy rate increased 4.3 percentage points month-on-month to 85.4%, down 0.7 percentage points from the same period in '19. International line supply fell 0.2% month-on-month, and demand rose 8.6% month-on-month, about 85.2%/84.0% in the same period in '19, and the passenger occupancy rate rose 6.7 percentage points to 82.0%, down only 1.1 percentage points from the same period in '19; regional line supply fell 3.4% month-on-month, and demand rose 4.3% month-on-month, about 82.6%/79.3% in the same period in '19, and the passenger occupancy rate rose 5.7 percentage points to 77.8% month-on-month, down 3.2 percentage points from the same period in '19.
The three major airlines dominate the pace of restoration. Jixiang domestic and regional routes have recovered more comprehensively, and the passenger occupancy rate in spring and autumn is impressive
In February, the supply and demand of the three major airlines (Air China, China Eastern Airlines, and China Southern Airlines) each increased 1.2%/7.8% month-on-month, dominating the pace of recovery. Domestic supply and demand increased by 29.2%/27.9% respectively over the same period in '19, a step further than the recovery progress of the previous month (121.0%/121.3%). Among them, China Eastern Airlines' supply-side and demand-side recovery was faster than that of Air China and China Southern Airlines, and domestic flight recovery both surpassed the same period in '19.
The recovery of small airlines is different: Juneyao Airlines shows the characteristics of domestic/ international route recovery. Demand for domestic/ international routes exceeded 45.2%/46.5% in the same period in '19, respectively, total demand recovered to 144.0% in the same period in '19, and the total passenger occupancy rate exceeded 0.4 percentage points to 87.4% in the same period in '19. Spring Airlines maintained a leading passenger occupancy rate, with total domestic, international and regional passenger occupancy rates of 93.0%/93.2%/91.6%/94.1%, respectively.
The number of flights operated by various airlines in March and the daily utilization rate of aircraft declined significantly from month to month
From March 1 to March 10, 2024, the number of flights operated by Air China, China Eastern Airlines, China Southern Airlines, Chunqiu, and Lucky Day decreased by 3.9%/13.1%/8.8%/8.0%/14.9%, respectively, compared with February. In terms of daily aircraft utilization, the daily utilization rate of Air China/China Eastern Airlines/China Southern Airlines/Chunqiu/Jixiang aircraft decreased by 4.8%/13.3%/9.2%/8.5%/15.2%, respectively, compared to February, reaching 7.5/7.3/8.2/8.4/8.1 hours/day, respectively.
The recovery of international flights is accelerating, and attention is being paid to large-scale investment opportunities. International flights resumed at an accelerated pace during the Spring Festival travel season. Domestic and international supply and demand rose rapidly month-on-month during the peak season, and rigid travel demand led to a sharp rise in airline volume and prices. Haitong Securities believes that the industry's recovery trend has been established, and the cycle is gradually rising. The increase in domestic demand has established a solid foundation for the recovery of airline performance. With the easing of international relations and the gradual friendliness of policies such as entry and exit visas, demand for international air travel will pick up further in '24; in addition, ground support and airline capacity at overseas airports will gradually recover, and international flights are expected to be further repaired in '24. There is a high degree of certainty that China's airlines will slow down the introduction of capacity in the long term; travel confidence will continue to recover, and they are optimistic that the long-term investment logic of the aviation industry will not change in the future (that is, an improvement in the supply and demand pattern, and the marketization of ticket prices), and wait for the economy to recover.
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