Core Viewpoint - The introduction of the TAOIX system's flight scheduling module by China Southern Airlines aims to enhance the efficiency and safety of operations during the peak summer travel season through comprehensive digitalization [1][2]. Group 1: Digital Transformation in Flight Scheduling - The new flight scheduling module utilizes operations research and artificial intelligence to improve task distribution and personnel matching, addressing inefficiencies in traditional scheduling methods [2]. - The module covers various maintenance scenarios, creating a closed-loop management system that enhances scheduling efficiency by reducing reliance on manual notifications [2][3]. - The intelligent scheduling algorithm and real-time monitoring capabilities allow for precise task and personnel matching, significantly improving the scientific and efficient nature of scheduling [2][3]. Group 2: Real-time Data Integration and Response - The module introduces a digital monitoring mechanism that connects with multiple data platforms, enabling a dynamic response system to flight changes [3]. - Automatic alert functions provide timely notifications to staff and management, facilitating quick task handling and improving overall operational efficiency [3]. - The system supports real-time tracking of key performance indicators, aiding in decision-making for scheduling strategies and resource allocation [3]. Group 3: Nationwide Implementation and Future Directions - The flight scheduling module has been successfully piloted in several bases, with significant improvements noted in monitoring and task management [4]. - The module has been rolled out to 17 maintenance units, expanding the coverage of digital scheduling [4]. - Future initiatives will focus on standardizing processes, digitizing management, and enhancing decision-making capabilities to further advance the digital transformation in maintenance operations [4].

Core Viewpoint - The aviation sector in Hong Kong and mainland China is experiencing a positive performance, with significant stock price increases for major airlines, while the industry is also addressing challenges related to competition and profitability [1][5][6]. Group 1: Stock Performance - Hong Kong aviation stocks showed active performance, with China National Aviation rising by 6.25%, China Southern Airlines and China Eastern Airlines increasing by over 3%, and Cathay Pacific rising by 0.17% [1]. - In the A-share market, Huaxia Airlines rose over 4%, while China National Aviation and Juneyao Airlines increased by over 3% [2]. Group 2: Industry Developments - The Civil Aviation Administration of China (CAAC) held a meeting on July 22, 2025, outlining nine requirements to enhance the aviation sector, including the establishment of a unified market and addressing "involution" competition [3][4]. - In the first half of the year, the aviation industry achieved a total transport turnover of 783.5 billion ton-kilometers and a passenger transport volume of 37 million, marking year-on-year growth of 11.4% and 6% respectively [3]. Group 3: Financial Performance of Airlines - Major state-owned airlines are expected to report significant losses for the first half of 2025, with China Eastern Airlines projecting a net loss of 1.2 to 1.6 billion yuan, China Southern Airlines expecting a loss of 1.338 to 1.756 billion yuan, and China National Aviation forecasting a loss of 1.7 to 2.2 billion yuan [6][8]. - In contrast, Huaxia Airlines anticipates a net profit of 220 to 290 million yuan, reflecting a year-on-year increase of 741% to 1009% [9]. Group 4: Market Recovery and Future Outlook - The international flight recovery remains slow, with only 84% of pre-pandemic levels restored by 2024, and 88% by the first half of 2025, impacting the profitability of major state-owned airlines [8][10]. - The aviation industry is projected to benefit from the "anti-involution" policies, which may stabilize ticket prices and improve revenue management strategies, potentially leading to a recovery in profitability [14][15].

《中国民航报》、中国民航网 记者路泞 通讯员吴苗、窦文婷 报道：大暑时节，暑气正盛。以弘扬中华 传统文化为己任，南航西安分公司近日在CZ8061西安-阿拉木图航班上精心策划了"丝路盛夏·长安暑"主 题航班活动。通过沉浸式文化体验、趣味互动与特色服务，为旅客带来一场清凉的空中之旅，生动展现 了中华传统文化的独特魅力和南航"亲和精细"的服务理念。 （南航供图） 活动尾声，乘务组邀请全体旅客举起礼品合影留念，客舱内笑声与快门声交织。一张满载笑容的"空中 全家福"，为此次文化之旅画上圆满句号。此次"丝路盛夏·长安暑"主题航班活动，不仅为暑运中的旅客 带来了清凉与欢乐，更通过创新形式传播了中华传统文化，进一步提升了南航的品牌形象，让优质服务 与人文关怀在万米高空绽放出别样光彩，让中外旅客共同感受中国传统节气的魅力。 未来，南航将继续结合文化主题与航线特色，打造缤纷多彩的沉浸式飞行体验，继续深挖传统文化与地 域特色，打造更多"有温度"的主题航班，让飞行旅途留下美好记忆。（编辑：孙文瑾 校对：王亚玲 审 核：韩磊） 作为最炎热的节气，大暑承载着古人"觅清凉、品夏趣"的生活智慧。CZ8061航班平飞后，客舱内响起 悠扬的丝路 ...

Investment Rating - The investment rating for the transportation industry is "Positive" (maintained) [4] Core Views - The express delivery sector shows significant divergence in June data, with a focus on the industry's anti-involution process [3] - The express logistics market is expanding, supported by the national strategy to boost domestic demand, with a year-on-year growth of 15.8% in express delivery volume in June 2025 [5] - The performance of major express companies varies, with SF Express maintaining a business volume growth rate of over 30%, while other companies like YTO Express and Yunda Express show slower growth [4][5] Summary by Sections Express Logistics - In June 2025, the total express delivery volume reached 16.87 billion pieces, a year-on-year increase of 15.8%, with total revenue of 126.32 billion yuan, up 9.0% [5][24] - Major express companies' performance in June: YTO Express (2.627 billion pieces, +19.34%), Yunda Express (2.173 billion pieces, +7.41%), SF Express (1.460 billion pieces, +31.77%) [4][28] - The market share for these companies is 15.6% for YTO, 12.9% for both Yunda and Shentong, and 8.7% for SF Express [4] Air Transportation - The air travel sector is expected to benefit from macroeconomic recovery, with a year-on-year increase of 4.4% in passenger transport volume in June 2025 [52] - Major airlines are projected to improve their performance in Q2 2025 due to better supply-demand dynamics and lower oil prices [8] Shipping and Ports - The shipping sector is anticipated to benefit from OPEC+ production increases and a favorable economic environment, with a focus on crude oil transportation [16] - The Baltic Dry Index (BDI) increased by 27.8% week-on-week, indicating a recovery in the bulk shipping market [11][68] - Container throughput at Chinese ports showed a slight increase in cargo volume but a decrease in container throughput [81] Road and Rail - In June 2025, road freight volume increased by 2.86% year-on-year, while rail freight volume rose by 7.36% [45] - National logistics operations are running smoothly, with a slight increase in freight truck traffic [14] Supply Chain Logistics - Companies like Shenzhen International and Debon Logistics are expected to benefit from strategic transformations and improved profitability [15]

Investment Rating - The report recommends investing in SF Holding due to its valuation, operational resilience, and shareholder returns [2] - The report also recommends the aviation sector, specifically Air China and China Southern Airlines, due to expected profit elasticity from supply-demand optimization [4] Core Views - The express delivery industry saw a year-on-year growth of 15.8% in business volume in June, with SF Holding leading the growth [2] - The logistics sector is under pressure, particularly in hazardous materials logistics, but there is a push towards smart logistics, with Hai Chen Co. being recommended [3] - The aviation sector is experiencing robust growth, with Spring Airlines and China Eastern Airlines leading in RPK growth [4] - The shipping sector is facing challenges, with the CCFI index showing a significant year-on-year decline of 40.2% [5] Summary by Sections Transportation Market Review - The transportation index increased by 0.2% from July 12 to July 18, underperforming the Shanghai and Shenzhen 300 index by 0.8% [1][13] Express Delivery - In June, the national express delivery business volume reached 168.7 billion pieces, with a revenue of 126.32 billion yuan, marking a 9.0% year-on-year increase [2] - The average revenue per delivery decreased by 5.9% to 7.49 yuan [2] Logistics - The chemical products price index (CCPI) is at 4021 points, down 14.3% year-on-year [3] - Hai Chen Co. is recommended due to its strategic partnerships and improved demand in consumer electronics [3] Aviation - The average daily flights in China increased by 3.29% year-on-year, with domestic flights up by 1.89% [4] - RPK growth for major airlines shows significant increases, with Spring Airlines at +12% compared to 2024 [4] Shipping - The CCFI index is at 1303.54 points, down 0.8% week-on-week and down 40.2% year-on-year [5] - The BDI index increased by 29.9% week-on-week, indicating a recovery in dry bulk shipping [5][38] Road and Rail - The national highway freight traffic increased by 0.19% week-on-week, with a year-on-year increase of 0.82% [6][81] - The railway passenger turnover increased by 3.61% year-on-year, while freight turnover showed a slight decline [79]

Group 1 - The peak travel season in Xinjiang is currently underway, prompting the Southern Airlines Xinjiang branch to enhance daily training and optimize the "Red-Blue confrontation" training model to improve emergency response capabilities and strengthen aviation safety [1][3] - The "Red-Blue confrontation" training mode simulates standard emergency procedures and replicates details of flight incidents based on recent aviation safety events, aiming to create realistic scenarios for training [1][2] - The training emphasizes rapid decision-making in high-pressure situations, where aviation security personnel must assess threat levels and isolate risks within seconds, thereby improving both response speed and psychological resilience [1][2] Group 2 - The training system includes a review and summary process that focuses on key actions during the "Red-Blue confrontation" training, using guidelines and tactical simulations as references to enhance professional skills [2] - In response to the increasing flight and passenger volumes during the peak season, the Southern Airlines Xinjiang security team is committed to ensuring passenger safety through rigorous training and effective incident management [3] - The management department is dedicated to addressing challenges posed by extreme weather and disturbances, ensuring safe and orderly travel for passengers during the peak summer season [3]

Investment Rating - The investment rating for the airline transportation industry is "Positive" [2]. Core Viewpoints - The industry has maintained a high passenger load factor since the beginning of 2025, with domestic flight capacity growth being low while international routes are seeing increased capacity. The supply remains tight with a net fleet growth rate of less than 3% [14]. - The passenger load factor has improved compared to both the previous year and the same period in 2019, particularly in domestic routes. Domestic flight turnover has shown steady growth, while international turnover has significantly recovered to levels close to those of 2019 [14]. - Although ticket prices have shown a weak performance due to increased capacity in the second quarter, there is an expectation for price recovery during the summer travel peak season as demand gradually increases [3][14]. Summary by Sections Investment Recommendations - The report suggests focusing on airlines such as Air China, China Eastern Airlines, China Southern Airlines, Spring Airlines, and Juneyao Airlines due to the anticipated recovery in ticket prices driven by improved supply-demand dynamics during the summer peak season [3][14]. Industry Capacity and Ticket Prices - The industry has seen a continuous high passenger load factor, with the flight cancellation rate decreasing as the travel peak season approaches. In May 2025, the industry’s Available Seat Kilometers (ASK) and Revenue Passenger Kilometers (RPK) increased by 8.0% and 11.5% year-on-year, respectively, with a passenger load factor of 84.6%, up 2.7 percentage points year-on-year [4][16]. - Ticket prices in the second quarter have shown a narrowing decline compared to the previous quarter, with an average ticket price of 848 RMB, down 9.2% year-on-year. The average ticket price in early July was down 7.9% year-on-year [5][27]. Fuel Prices and Exchange Rates - The average price of aviation fuel has decreased significantly, with a year-on-year decline of 12.8% in July. The average aviation kerosene price in the first and second quarters was down 10.0% and 17.0% year-on-year, respectively [6][39]. - The exchange rate has remained stable, with the USD to RMB exchange rate at 7.1526 as of July 16, 2025, a decrease of 0.50% from the end of 2024 [6][39]. Operational Performance of Airlines - In the first half of 2025, domestic airlines have shown low growth in capacity, with the exception of a few airlines. The passenger load factor for major airlines has increased year-on-year, with significant improvements noted in domestic routes [8][46]. - In June 2025, the overall ASK growth for major airlines was led by Spring Airlines at 12.4%, while the international routes have shown recovery rates close to 2019 levels for some airlines [46][49].

Investment Rating - The industry investment rating is "Positive" [5] Core Viewpoints - The report highlights that the domestic airline industry is currently in a low season, with a modest increase in capacity deployment of 1.1% year-on-year in June, but a decrease of approximately 2.9% compared to May. Demand remains weak, leading airlines to adopt a more restrained approach to capacity deployment [2][10][14] - Eastern Airlines has shown a notable increase in passenger load factor, rising against the trend of other major airlines, indicating a strategic focus on improving load factors [2][30] - The report anticipates that as the peak summer travel season approaches, operational pressures on the industry are expected to improve, with potential for higher ticket prices due to increased load factors [3][11][38] Summary by Sections 1. Domestic Route Capacity Deployment - In June, listed companies increased domestic route capacity by 1.1% year-on-year, but saw a decrease of about 2.9% month-on-month. Major airlines like Eastern Airlines and Air China reduced capacity by 5.1% and 4.3% respectively compared to May [2][14][16] - The overall passenger load factor for listed companies decreased by 0.4 percentage points month-on-month but increased by approximately 1.7 percentage points year-on-year. Eastern Airlines' load factor continued to rise, reflecting its prioritization of this metric in sales strategies [30][38] 2. International Route Capacity Deployment - International route capacity for listed airlines increased by about 17.4% year-on-year in June, but decreased by 1.5% compared to May. The demand growth for international routes appears to be slowing [3][55] - The passenger load factor for international routes improved by 0.9 percentage points month-on-month and by 1.0 percentage point year-on-year, indicating a slight recovery despite ongoing demand pressures [3][55] 3. Airport Throughput - Major airports such as Shanghai and Shenzhen reported year-on-year growth in international passenger throughput of 17% and 19% respectively. However, there has been a recent slowdown in growth, with some airports experiencing a decline in international passenger numbers over the past two months [68][70]

Investment Rating - The investment rating for the aviation industry is "Overweight" indicating a positive outlook for the sector [7]. Core Insights - The civil aviation passenger transport volume continued to grow steadily in June, with a year-on-year increase of 3.8%, reaching approximately 60.9 million passengers. Capacity saw a slight increase of 0.3% year-on-year [4]. - The average aircraft utilization rate in June was 7.8 hours per day, showing a month-on-month decrease of 1% but remained stable year-on-year [4]. - Major airlines reported growth in capacity and passenger turnover, with notable increases from Spring Airlines (+12%) and China Eastern Airlines (+10%) in passenger turnover compared to the previous year [4]. - The international market is recovering, with June international flight numbers reaching 55,000, recovering to 87.1% of the same period in 2019 [4]. - The report highlights a structural differentiation in recovery across regions, with demand expected to accelerate as the summer travel season begins [4]. Summary by Sections Passenger Transport Data - In June, the total passenger transport volume was approximately 60.9 million, a 3.8% increase year-on-year. Domestic market capacity increased by 0.3%, while international flights reached 55,000, recovering to 87.1% of 2019 levels [4][5]. - Airlines' passenger turnover (RPK) showed growth, with China Eastern Airlines at +10% and Spring Airlines at +12% year-on-year [4]. Airline Performance - The report provides a summary of key airline metrics for June, including ASK (Available Seat Kilometers) and RPK, with China Eastern Airlines and Spring Airlines showing significant growth [5]. - The passenger load factor for June was highest for Spring Airlines at 92.1%, while China Southern Airlines and China Eastern Airlines also reported strong load factors [4][5]. Investment Recommendations - The report recommends continued investment in the aviation sector, highlighting the strong supply logic and demand elasticity, with specific recommendations for China National Aviation, China Eastern Airlines, Spring Airlines, and others [4][7].

Group 1: Company Performance - Hainan Airlines and Huaxia Airlines achieved profitability in the first half of the year, while Air China and China Eastern Airlines reported a significant reduction in losses year-on-year [1] - The three major airlines (China Southern, Air China, and China Eastern) are expected to incur a net loss of approximately 4.238 billion to 5.556 billion yuan in the first half of 2025, with Air China and China Eastern showing a reduction in losses, while China Southern's losses have widened [2][3] - China Southern Airlines anticipates a net loss of 1.338 billion to 1.756 billion yuan for the first half of 2025, representing a year-on-year increase in losses of 9% to 43% [3] - Air China expects a net loss of approximately 1.7 billion to 2.2 billion yuan, a reduction in losses of 20.9% to 39% compared to the previous year [3] - China Eastern Airlines forecasts a net loss of about 1.2 billion to 1.6 billion yuan, with a reduction in losses of 42% to 55% year-on-year [3] Group 2: Industry Challenges - The airlines attribute their continued losses to domestic market competition and international environmental impacts, including changes in passenger structure and the impact of high-speed rail [4] - The competition from high-speed rail is increasingly significant, with the price and service levels of air travel and high-speed rail converging, leading to structural changes in passenger demographics [4] - The Civil Aviation Administration of China has initiated measures to address "involution" in the aviation sector, emphasizing the need for structural reforms and innovation to enhance service differentiation [6] Group 3: Market Trends - The average ticket price for domestic economy class during the summer travel season is lower than in previous years, which may lead to an increase in passenger load factors [6] - The second quarter of 2025 showed strong demand in the aviation sector, with passenger transport volumes exceeding 60 million and high load factors maintained [7] - The aviation industry is expected to see a rise in both passenger load factors and ticket prices during the summer travel season, driven by strong demand and a low base from the previous year [7][8]