Guosheng Securities: Airline passenger volume growth, ticket price recovery, focusing on demand for public and business travel and the resumption of international flights.

Guosheng Securities released a research report stating that as of October 14, 2025, the daily flight volume of civil aviation flights in 2025 was 15,539 flights, compared to 14,980 flights in the same period in 2024, an increase of 3.73% year-on-year, and the number of flights increased steadily. From the perspective of passenger load factor, the passenger load factors of civil aviation in July to September 2025 were 84.5%, 87.5%, and 85.8% respectively, all higher than the passenger load factor level in the same period in 2019. Currently, the growth rate of airline supply is low, demand is recovering continuously, the supply-demand gap is narrowing, and coupled with the downward shift of oil prices and the promotion of the "anti-involution" policy, it is expected that ticket prices will continue to recover and airline profitability will continue to improve. Continue to monitor the recovery of demand, pay attention to the demand for public and business travel and the recovery of international flights. Guosheng Securities' main points are as follows: Holiday passenger flow reaches a historical high, strong willingness to travel The consecutive holidays of National Day and Mid-Autumn Festival, as well as the convenient "splicing of holidays," have stimulated a strong willingness for private holiday travel and created conditions for long-distance and in-depth travel. According to data from the Ministry of Transport, from October 1st to 8th, 2025 (National Day and Mid-Autumn Festival holiday), the total inter-regional passenger flow of the whole society is expected to reach 2.432 billion person-times, a historical high for the same period, with an expected daily average year-on-year increase of 6.2%. Among them, the actual civil aviation passenger volume totaled 19.138 million person-times, with a daily average of 2.392 million person-times, an increase of 4.1% and 26.9% year-on-year compared to 2024 and 2019 respectively. The data of the record high holiday passenger flow and the year-on-year growth of civil aviation passenger volume demonstrate the resilience of civil aviation demand. Steady increase in flight volume, stable increase in passenger load factor, continuous recovery of ticket prices As of October 14, 2025, the daily flight volume of civil aviation flights in 2025 was 15,539 flights, compared to 14,980 flights in the same period in 2024, an increase of 3.73%, with a steady increase in the number of flights. From the perspective of passenger load factor, the passenger load factors of civil aviation in July to September 2025 were 84.5%, 87.5%, and 85.8% respectively, all higher than the passenger load factor level in the same period in 2019; in September 2025, the average passenger load factor of the three major airlines was 85.7%, an increase of 5 percentage points compared to the same period in 2019, outperforming the industry average growth. In September 2025, the average tax-inclusive ticket price for domestic economy class in civil aviation was 697 yuan, an increase of 0.6% year-on-year, compared to a year-on-year decrease of -5.0% in September 2019; during the National Day and Mid-Autumn Festival holiday in 2025, the average ticket price for domestic economy class in civil aviation was 849 yuan, an increase of 0.3% year-on-year, compared to a year-on-year decrease of -1.4% during the holiday in 2019, indicating a continuous recovery in ticket prices. Significant growth in international flight volume, steady progress in domestic flight volume Analyzing the structure of flight volumes, the increase in the number of international and flights to the Greater China region is significant. As of October 14, 2025, the daily average flight volume of international and flights to the Greater China region in civil aviation in 2025 reached 2,154 flights, an increase of 16.70% year-on-year; the daily average flight volume for domestic flights in 2025 was 13,885 flights, an increase of 1.91% year-on-year. With the continuous expansion of visa-free arrangements, international travel and communication demand are continuously being activated. As of the end of June 2025, the international flight volume had recovered to 88% of the same period in 2019. Capacity expansion is limited, and it is expected that supply will grow at a slow pace Impacted by special health events and international political conflicts, major global aircraft manufacturers have been significantly affected in their supply chains, resulting in a significant slowdown in global aircraft deliveries. Boeing and Airbus delivered 348 and 766 aircraft respectively in 2024, with year-on-year growth rates of -34.1% and 4.2%, respectively. It is expected that future aircraft deliveries will continue to be under pressure; considering the delivery cycle of domestically produced C919 aircraft, the gradual retirement of aging aircraft fleets, and the increasingly stringent industry regulatory entry restrictions, it is expected that future expansion of aviation capacity will continue to be limited, and supply will maintain a relatively low growth rate. Oil prices are trending downward, waiting for the comprehensive effect of "anti-involution" competition to be implemented Since 2025, international oil prices have been on a downward trend overall, and the reduction of aviation fuel costs is conducive to the release of airline profits. On June 26, 2025, the rectification work against "involution" in the aviation sector was launched. The "involution" competition in the aviation sector is mainly reflected in the continuous decline in ticket prices to "involution." With the continuous promotion of the "anti-involution" policy and the continuous implementation of the comprehensive rectification effect, a restoration of ticket prices in the aviation industry can be expected. Investment advice With low growth in supply and continuous recovery in demand, combined with the downward shift of oil prices and the promotion of the "anti-involution" policy, it is expected that ticket prices will continue to recover and airline profitability will continue to improve. Continue to monitor the recovery of demand, pay attention to the demand for public and business travel and the recovery of international flights. It is recommended to focus on the aviation sector and pay attention to China Express Airlines (002928.SZ), Air China Limited (601111.SH, 00753), China Eastern Airlines Corporation (600115.SH, 00670), China Southern Airlines (600029.SH, 01055), Juneyao Airlines (603885.SH), Spring Airlines (601021.SH). Risk warning The recovery of travel demand is lower than expected; risks of the credibility of third-party data; risks of changes in domestic and foreign policies; risks of significant depreciation of the renminbi; risks of significant increase in oil prices, etc.