JUNEYAOAIR(SH:603885) Chang Jiang Shang Bao·2025-12-30 23:21Core Viewpoint - 吉祥航空 is making a significant investment in expanding its fleet by purchasing 25 Airbus A320 aircraft for $4.1 billion, aiming to enhance its operational capacity and support its internationalization strategy amid declining performance metrics [1][2]. Group 1: Aircraft Purchase Details - The company plans to finance the aircraft purchase through a combination of self-funding, bank loans, and other financing methods, utilizing a flexible payment model [2]. - Airbus is providing substantial price discounts on the aircraft, resulting in a final transaction price significantly lower than the basic price [2]. - The delivery of the aircraft is scheduled to occur in phases between 2028 and 2032, contingent upon national approval [1][2]. Group 2: Performance Challenges - In the first three quarters of 2025, 吉祥航空 reported a slight decline in revenue to 17.48 billion yuan, down 0.06% year-on-year, and a net profit drop of 14.28% to 1.089 billion yuan [1][4]. - The decline in performance is attributed to reduced domestic capacity due to engine maintenance issues and increased repair costs [1][4]. - The company experienced a more pronounced revenue drop in Q3 2025, with a 1.88% decrease to 6.413 billion yuan and a 25.29% decline in net profit to 584 million yuan [4]. Group 3: Strategic Initiatives - To counteract the performance decline, 吉祥航空 is accelerating its internationalization strategy by optimizing its route network and increasing the frequency of both domestic and international flights starting October 26, 2025 [1][5]. - The company is focusing on expanding its international routes, particularly in regions aligned with the Belt and Road Initiative, and enhancing flight frequencies to popular destinations [5][6]. - Domestic route expansions include new connections and the resumption of seasonal routes to boost tourism and regional connectivity [6].