SA(SH:601021) Xin Lang Cai Jing·2025-09-09 08:26Core Viewpoint - Spring Airlines, as China's first low-cost airline, reported a revenue of 10.304 billion yuan in the first half of 2025, a year-on-year increase of 4.35%, but its net profit decreased by 14.11% to 1.169 billion yuan, indicating a slowdown in growth despite maintaining profitability [1] Financial Performance - The company's total profit before tax for the first half of 2025 was 1.543 billion yuan, slightly up from 1.504 billion yuan in the same period of 2024, which explains the ability to propose a cash dividend plan of 418 million yuan despite the decline in net profit [1] - The income tax for Spring Airlines in the first half of 2025 was 374.3 million yuan, compared to only 143.4 million yuan in the same period of 2024, primarily due to the timing difference in the use of previously unrecognized deferred tax assets [1] Operational Challenges - The overall passenger load factor for Spring Airlines in the first half of 2025 was 90.5%, a decrease of 0.8 percentage points year-on-year, with international routes showing a load factor of 86.9%, down 2.8 percentage points, despite a 41% increase in capacity [2][3] - The unit cost of ASK (Available Seat Kilometer) was 0.303 yuan, a decrease of 3.5% year-on-year, mainly due to lower fuel costs, while the unit fuel cost was 0.102 yuan, down 12.6% [3] Competitive Landscape - Full-service airlines are increasingly offering services at near low-cost prices, which poses a significant challenge to Spring Airlines' business model that relies on "reducing services for lower prices" [4] - The premium of full-service airlines' economy class ticket prices over low-cost carriers has dropped from 42% in 2019 to 18%, significantly reducing Spring Airlines' price attractiveness [4] Customer Experience Issues - Spring Airlines faces widespread criticism for strict baggage regulations and high cancellation fees, with reports of passengers taking extreme measures to comply with size and weight limits [5] - Although these measures may increase short-term revenue, they risk damaging the long-term brand image and customer loyalty [6] Industry Outlook - The Civil Aviation Administration's advocacy for "anti-involution" may help reduce vicious price competition, and a contraction in industry supply is expected in 2025, which could alleviate downward pressure on ticket prices [6] - The company needs to address the challenges of business model transformation, including improving service experience while controlling costs and finding differentiated positioning in international routes [6]