Huatai Securities: Airline operations continue to improve, awaiting a pullback in oil prices.

Huatai Securities research report states that in September, airlines' capacity growth maintained a relatively high level. The three major airlines + Spring Airlines + Juneyao Airlines saw ASK/RPK increase by 6.6%/7.4% year-on-year respectively, with load factor rising 0.7pct year-on-year to 86.6%. Meanwhile, ticket prices improved, with domestic fuel-inclusive ticket prices increasing 7.6% year-on-year from week 36 to week 39. Currently, airlines still face a relatively heavy fuel price burden, and market attention and expectations for the sector are low. Looking ahead, a sector rebound requires waiting for oil prices to decline; however, high-frequency data such as ticket prices have been continuously improving recently, and the introduction of the "Measures for Optimizing Domestic Route Flight Reviews" as well as the new season schedule reflecting an "anti-involution" orientation. In the medium to long term, Huatai Securities remains optimistic about a recovery from the industry's cyclical bottom.