中国航空运输行业展望，2025年1月

Industry Investment Rating - The outlook for the Chinese air transport industry is maintained as stable, with no significant changes expected in the overall credit quality over the next 12-18 months [4][40] Core Views - The domestic passenger market has transitioned to normalized growth post-recovery, while the international passenger market has rapidly recovered to 80% of pre-pandemic levels, and cargo has seen unexpected growth, leading the industry to turn profitable [4][5] - The industry is expected to maintain growth in 2025, albeit at a slower pace for both passenger and cargo segments [5][7] - The supply growth for domestic passenger services is expected to slow, while international passenger services still have room for recovery, and the gap between cargo supply and demand growth is expected to narrow [5][16] - The industry's financial leverage is expected to decrease slightly as profitability improves, and financing channels remain open, supporting debt repayment capabilities [5][30] Industry Fundamentals - The air transport industry has seen steady and rapid growth in 2024, with domestic passenger demand transitioning to normalized growth and international passenger demand recovering to 80% of pre-pandemic levels [7][9] - The total turnover of civil aviation transport reached 1,360.90 billion ton-kilometers from January to November 2024, a 23.10% year-on-year increase and 14.87% higher than the same period in 2019 [7] - Passenger load factor and cargo load factor have fully recovered to 83.40% and 72.00%, respectively, matching 2019 levels [7] Financial Performance - In the first three quarters of 2024, all sampled airlines achieved profitability, with net profits turning positive, and financial leverage decreased while debt repayment indicators improved significantly [30][31] - Operating cash flow for the sampled airlines remained strong, with most exceeding 2019 levels, and capital expenditures continued to grow, driven by aircraft procurement needs [34][36] - The weighted financing cost for newly issued bonds by major airlines decreased by 18 basis points to 1.97%, reflecting lower financing costs [34] Supply and Demand Dynamics - The introduction of new aircraft has slowed, with the industry's fleet growing by only 2.52% in 2023, and the net growth rate for 2024-2026 is expected to be around 3-4% [16][20] - Domestic passenger supply growth is expected to slow in 2025, while international passenger supply still has room for recovery, particularly in East Asia and Southeast Asia [20][21] - Cargo supply and demand growth differences are expected to narrow, with international cargo supply increasing significantly due to the recovery of international passenger flights [21] External Competition - Air transport has a slight edge over railways in domestic passenger growth, and air cargo growth has outpaced both water and rail transport [24][25] - The expansion of aviation infrastructure and the promotion of air-rail intermodal products are expected to further enhance the growth potential of civil aviation passenger transport [24] Cost and Capital Expenditure - Crude oil price fluctuations have reduced operating costs for airlines, but the rapid appreciation of the USD against the CNY in Q4 2024 increased financial expenses [26][29] - Major airlines' capital expenditures are expected to remain high, driven by aircraft procurement needs, with annual expenditures exceeding 20 billion CNY for 2024-2025 [26]