Summary of Airline Industry Conference Call Industry Overview - The airline sector is expected to see a significant increase in total passenger volume in 2024, with a year-on-year growth of 17.9% compared to 2023 and a 10.6% increase compared to 2019 [4][11] - Despite the increase in passenger volume, ticket prices have experienced a substantial decline, with major airlines reporting a double-digit percentage drop in ticket prices for 2024 compared to the same period in 2023 [4][11] - The business travel segment is under pressure, leading to a decline in ticket prices, while leisure travel demand has shown strong recovery, particularly during the May Day holiday [4][11] Key Insights - The airline industry is approaching a performance turning point in 2025, driven by declining oil prices and long-term supply-demand optimization [2][13] - The supply side of the airline industry is expected to remain tight due to issues with Pratt & Whitney engines, leading to an increased number of grounded aircraft, estimated at 180-200, which represents about 4%-5% of total capacity [5][13] - A decrease in oil prices significantly supports airline profitability, with a 1% drop in oil prices potentially reducing costs for major airlines by approximately 400-500 million yuan [6][7] Market Dynamics - The implementation of visa-free policies is expected to rapidly boost the inbound tourism market, with inbound travel data for 2024 nearing 2019 levels and likely surpassing it in 2025 [10][11] - Airlines are actively addressing pricing issues with Online Travel Agencies (OTAs), which is expected to create a positive cycle for ticket prices and sales, benefiting revenue management [9][13] Investment Recommendations - Key airlines to watch include China National Aviation Holding (Air China), China Eastern Airlines, China Southern Airlines, Spring Airlines, and Juneyao Airlines, as they are poised to benefit from the overall recovery of the industry [3][8][14] - The airline sector is seen as having sufficient upward catalysts, making it a recommended area for investment [14] Additional Considerations - The Japanese tourism strategy serves as a model for China, highlighting the potential for significant growth in inbound tourism through international route promotion and visa facilitation [12] - The airline industry is facing a long-term supply-demand optimization trend, with 2025 being a critical year for performance recovery [13]