Zhi Tong Cai Jing·2025-07-31 09:20Core Viewpoint - The report from Guotai Junan suggests that short-term demand fluctuations do not alter the long-term growth logic of the aviation industry, recommending a contrarian investment approach in the sector [1] Group 1: Industry Supply and Demand - The aviation supply has entered a low growth phase, with a projected improvement in supply-demand dynamics over the next two years, supported by declining oil prices and a reduction in competitive pressures [1][2] - In Q2, the domestic aviation supply remained low, with a net increase of only 52 aircraft, while the industry’s Available Seat Kilometers (ASK) grew by 6.7% year-on-year [2] - Domestic demand showed a steady recovery, with passenger traffic increasing by 5.5% in Q2, and the average ticket price remained stable compared to Q1 [2][3] Group 2: Financial Performance - The industry experienced a significant reduction in losses in Q2, with passenger load factors reaching historical highs, and a projected substantial decrease in losses for the three major airlines [2] - The average domestic fuel price decreased by 17% year-on-year, contributing to improved profitability for airlines during the off-peak season [2][3] Group 3: Seasonal Trends and Expectations - During the summer travel season, private travel demand remained strong, while business travel unexpectedly weakened, leading to lower ticket prices [3] - Despite the challenges, the industry is expected to achieve significant profitability during the summer season, with projections indicating a return to profitability by 2025 [3] Group 4: Policy and Market Dynamics - The "anti-involution" measures are anticipated to benefit the industry in three ways: reducing excessive low pricing in the short term, improving revenue management in the medium term, and ensuring slow growth in fleet planning in the long term [4]