Minsheng Securities·2025-08-18 11:04Investment Rating - The report maintains a "Buy" recommendation for several airlines, including China National Aviation, China Eastern Airlines, Southern Airlines, Spring Airlines, Juneyao Airlines, and Huaxia Airlines, indicating a positive outlook for these companies [5]. Core Insights - The aviation demand growth rate has slowed down year-on-year in July 2025, with the overall capacity growth limited. The six listed airlines in A-shares reported a year-on-year increase of 5.0% in Available Seat Kilometers (ASK) and 5.5% in Revenue Passenger Kilometers (RPK), with an overall load factor of 83.7%, up 0.4 percentage points [1][11]. - The industry is experiencing a price decline, with both domestic and international ticket prices dropping. The domestic economy class ticket prices fell by 7.4% year-on-year, while international ticket prices decreased by 16% [2][12]. - The international routes have recovered to 2019 levels, with ASK and RPK increasing by 12.5% and 12.7% year-on-year, respectively, indicating a strong recovery trend in international travel [1][16]. Summary by Sections Section 1: Demand and Supply Dynamics - In July 2025, the domestic aviation demand growth rate remained flat compared to June, with domestic ASK and RPK increasing by 3.1% and 2.3%, respectively, and a load factor of 85.0% [1][11]. - The international routes showed a significant recovery, with a year-on-year increase in ASK and RPK, reflecting a strong demand recovery driven by policy changes and market needs [16][19]. Section 2: Pricing Trends - The industry is characterized by a price-for-volume strategy, with high aircraft utilization and load factors not translating into revenue growth. The average aircraft utilization remained at 8.8 hours, unchanged from the previous year [2][12]. - The report highlights a significant drop in ticket prices, with domestic economy class prices down by 7.4% and international prices down by 16% year-on-year, indicating a challenging pricing environment [2][12]. Section 3: Fleet Expansion - The fleet of the six listed airlines increased by 0.3% month-on-month in July 2025, with a total of 3,315 aircraft managed. The report notes that the airlines are gradually receiving new Boeing aircraft, contributing to fleet growth [3][24]. - The report details the specific aircraft additions, including 12 narrow-body aircraft, primarily from the A320 series and B737 MAX, indicating a focus on modernizing the fleet [3][24][26]. Section 4: Investment Recommendations - The report suggests monitoring the recovery of business travel demand, as any marginal improvement could provide a basis for price increases in the fourth quarter, enhancing investor sentiment in the sector [4]. - The report emphasizes the importance of seasonal demand fluctuations and suggests that airlines like Huaxia Airlines, Juneyao Airlines, and Spring Airlines could benefit from improved business travel conditions [4].