Looking ahead to the full year of 2024, with the restoration of international flights and the easing of domestic oversupply pressure, airline passenger occupancy rates are expected to further recover, and profit flexibility brought about by peak season ticket price flexibility is expected to be further evident.
The Zhitong Finance App learned that China Merchants Securities released a research report saying that in April, civil aviation was negatively affected by the traditional off-season and bad weather. The growth rate of passenger traffic declined slightly from 19, and the overall performance of the industry was stable; the number of civil aviation passengers in the entire industry was +5% compared to 19, and international passengers recovered by more than 80%. In May, the immigration policy was further opened, and the convenience of international travel was improved. Looking ahead to the full year of 2024, with the restoration of international flights and the easing of domestic oversupply pressure, airline passenger occupancy rates are expected to further recover, and profit flexibility brought about by peak season ticket price flexibility is expected to be further evident.
Recommended attention: 1) Spring Airlines (601021.SH), Juneyao Airlines (603885.SH), small and medium-sized airlines have benefited from the recovery of the domestic market, and their performance is relatively certain. 2) Air China (601111.SH) and China Southern Airlines (600029.SH) are expected to benefit from the resumption of international flights this year and next, showing flexible performance.
The number of civil aviation passengers in April was +5% compared to 2019, and international passengers recovered by more than 80%
According to the Civil Aviation Administration, the entire industry completed passenger traffic of 559.50 million in April, up 10.6% year on year, up 5.3% from the same period in 2019; among them, domestic passenger traffic increased 8.1% over the same period in 2019, and international passenger traffic exceeded 5 million, completing 5.096 million passengers, recovering to 83.8% in the same period in 2019, and the recovery level exceeded 80% for three consecutive months.
Looking at airline business data: 1) Air China/China Southern Airlines/China Eastern Airlines/Chunqiu/Jixiang ASK were +16.8%/+0.6%/+26.5%/+35.1% compared to 2019, and RPK was +13.7%/+4.7%/+25.5%/+32.2% compared to 2019, respectively. Jixiang and Chunqiu led the increase compared to 2019; 2) In terms of passenger occupancy rate, Chunqiu continued to lead the industry with a passenger occupancy rate of 90.7%, and China Southern Airlines/China Eastern Airlines/Chunqiu/2019 Disparities, respectively - 2.2/+ 0.1/-2.5/-0.7/-1.8 percentage points Since mid-April, East China, Central and South China, and especially the Pearl River Delta region, have experienced prolonged, widespread, and high-intensity convective weather, which was rare in previous years, which had a negative impact on civil aviation operations.
The domestic market is still in a low season; immigration policies have been further opened up, and the convenience of international travel has been further improved
Since this year, domestic civil aviation demand has been stronger during the peak season and weaker in the off-season, and domestic ticket price performance has been weak after the May 1st holiday. According to the flight manager's high-frequency data, on May 12-18, the average domestic ticket price (excluding fuel) was -21% compared to the same period in 2019, and the number of domestic passengers was +8% compared to the same period in 2019.
On the international side, immigration policies have further improved the convenience of travel: 1) The State Administration of Immigration introduced a series of new entry and exit management policies on May 6; 2) According to the China National Administration of Immigration, in order to further facilitate the travel of foreigners to China, starting May 15, China's coastal provinces will fully implement the visa-free entry policy for foreign tour groups. Foreign tour groups visiting China by cruise ships and hosted by domestic travel agencies can stay for 15 days without entry visas at all cruise ports along the coast of China.
Risk warning: The macroeconomy fell beyond expectations; oil prices rose sharply, RMB depreciated sharply; flight recovery fell short of expectations.