Industry Investment Rating - The report maintains an "Overweight" rating for the aviation industry, with a positive outlook on the sector's recovery and profitability [4][9] Core Views - The Chinese aviation industry has long-term growth potential, with a clear trend of supply-demand recovery and an expected rise in profit margins [2][5] - The industry's profitability in Q3 2024 exceeded expectations, with A-share airlines' profits surpassing Q3 2019 levels [4][5] - The report recommends a counter-cyclical investment strategy during the off-season, citing low market expectations and potential benefits from falling oil prices [5][9] Industry Overview - The Chinese aviation industry is one of the few sectors with long-term growth potential, driven by significant demand growth and constraints on airspace and time slots [8][10] - The "14th Five-Year Plan" has seen gradual marketization of ticket pricing and a significant slowdown in fleet growth, which will support profit margin expansion [10][15] - The industry's recovery trend is expected to continue, with international flight increases helping to absorb domestic capacity [10][21] Profitability Analysis - A-share airlines' Q3 2024 revenue grew by 5% YoY and 11% compared to Q3 2019, reflecting sustained growth in aviation demand [5][29] - Fuel costs are expected to improve significantly from Q4 2024, with international oil prices declining in Q3 2024 [5][24] - Non-fuel costs are also improving faster than expected, driven by the recovery of international flights and economies of scale [5][60] Airline Performance - Major airlines (Air China, China Southern, China Eastern) saw a 18% YoY decline in Q3 2024 net profit but still grew nearly 10% compared to Q3 2019 [5][68] - Smaller airlines (Spring Airlines, Juneyao Airlines) saw a 30% YoY decline in Q3 2024 net profit but grew 33% compared to Q3 2019, in line with expectations [5][68] - Major airlines' cost improvements are accelerating, with better-than-expected performance in seat revenue and cost management [68][72] Revenue Management Strategy - Airlines shifted from a "price-first" strategy in 2023 to a "load factor-first" strategy in 2024, leading to higher load factors but lower ticket prices [5][72] - The industry's load factor in Q3 2024 increased by 4.5 percentage points YoY, with September's load factor even exceeding 2019 levels [5][72] - The report anticipates further positive changes in revenue management strategies, which could accelerate profit recovery [88][89] Fleet and Capacity - A-share airlines' fleet size reached 3,297 aircraft by September 2024, up 2% YoY and nearly 8% compared to September 2019 [38][40] - Narrow-body aircraft utilization has surpassed 2019 levels, while wide-body aircraft utilization is still recovering [38][62] - The recovery of international flights is expected to continue driving the utilization of wide-body aircraft, improving cost efficiency [84][85]
航空行业深度报告：24Q3航空盈利再超预期，盈利中枢上升可期
国泰君安·2024-11-15 07:42