SA(SH:601021) Hua Xia Shi Bao·2025-09-01 05:13Core Insights - The performance reports for the first half of 2025 from seven A-share listed Chinese airlines indicate that while state-owned airlines have reduced their losses, they have not yet returned to profitability, whereas all four private airlines reported profits, with Spring Airlines being the most profitable [1][2]. Industry Performance - The Civil Aviation Administration of China reported that the aviation industry maintained a positive growth trend in the first half of 2025, achieving a total transport turnover of 783.5 billion ton-kilometers, a passenger transport volume of 370 million, and a cargo volume of 478.4 million tons, representing year-on-year increases of 11.4%, 6%, and 14.6% respectively [2]. - Major state-owned airlines reported revenues of 80.76 billion yuan for Air China, 66.82 billion yuan for China Eastern Airlines, and 86.3 billion yuan for China Southern Airlines, with year-on-year growth rates of 1.56%, 4.09%, and 1.8% respectively. However, they all reported net losses of 1.806 billion yuan, 1.431 billion yuan, and 1.533 billion yuan respectively [2][3]. Private Airlines Performance - Spring Airlines achieved a revenue of 10.3 billion yuan, a year-on-year increase of 4.35%, and a net profit of 1.169 billion yuan. It continued to be the most profitable airline in mainland China [3]. - Other private airlines, including Juneyao Airlines, Hainan Airlines, and China Express Airlines, also reported profits, with Hainan Airlines achieving its best performance since 2020 with a revenue of 33.083 billion yuan and a net profit of 57 million yuan [3][6]. Market Dynamics - The overall increase in flight routes and passenger volume was significant, with domestic airlines carrying 3.7 million passengers, a year-on-year increase of 3.8%, and international passenger volume increasing by 28.4% [4]. - The average passenger load factor for the first half of 2025 was 84.1%, which is higher than the same period in 2024 and 2019 [4]. Revenue Challenges - Despite the growth in passenger numbers, the revenue per passenger kilometer declined for many airlines, indicating a competitive pricing environment. For instance, Spring Airlines' average revenue per passenger kilometer fell by 4.24% [7][8]. - The average ticket price for domestic economy class seats decreased by 6.9% compared to 2024 and by 7.8% compared to 2019, further impacting revenue [8]. Fleet Expansion and Strategy - Airlines are expanding their fleets to meet growing demand, with China Southern Airlines increasing its fleet to 943 aircraft and China Eastern Airlines adding 12 aircraft [9]. - The international market is becoming a key focus for airlines, with significant increases in international capacity and routes being established [10].