Investment Rating - The aviation industry is rated as "Overweight" [5] Core Views - The industry is expected to maintain a low supply growth rate, which could improve the supply-demand relationship and enhance airline profitability if demand recovers [1][4] - Despite weak ticket prices recently, the high passenger load factor indicates potential for revenue management improvements [1][4] - The report recommends continuous monitoring of peak season ticket prices and passenger load factors, with a positive outlook for major airlines [1][4] Summary by Sections Passenger Load Factor Performance - In June, the three major airlines maintained a high passenger load factor of 84.1%, up 1.8 percentage points year-on-year [2] - Spring Airlines experienced a slight decline in load factor to 92.1%, while Juneyao Airlines showed improvement with a load factor of 86.7% [3] Revenue and Profitability Outlook - The three major airlines forecasted a narrowing of net losses for Q2 2025, with Air China, China Eastern, and China Southern expected to report net losses of 0.94 billion, 4.05 billion, and 8.00 billion respectively, reflecting a year-on-year reduction of 78.0% [4] - The improvement in profitability is attributed to better revenue levels, with domestic ticket prices showing a smaller decline compared to previous quarters [4] Stock Recommendations - The report highlights several stocks with a "Buy" rating, including Air China (753 HK), China Eastern Airlines (670 HK), China Southern Airlines (1055 HK), and Spring Airlines (601021 CH) [8][21] - Target prices for these stocks are set at 6.90 HKD for Air China, 3.20 HKD for China Eastern, and 5.00 HKD for China Southern, among others [8][21]