Core Viewpoint - The Hong Kong aviation stocks are experiencing a sustained upward trend, with China Eastern Airlines rising nearly 7% and over 20% in the last four days, while China Southern Airlines and Air China have increased by over 4% [1] Industry Summary - According to a recent report by Zhongtai Securities, the total flight hours of domestic airlines for the winter-spring season of 2025 are expected to decline both year-on-year and month-on-month, which may lead to price increases due to supply constraints and structural adjustments [1] - The report indicates that the growth rate of the airline fleet is slowing down, and there has not been significant growth in first-tier flight slots, suggesting strong supply constraints in the aviation industry [1] - High passenger load factors combined with industry initiatives to avoid excessive competition are likely to drive a recovery in ticket prices, prompting recommendations for strategic investments during low periods [1] Company Summary - China Eastern Airlines stock is currently priced at 3.820 with a rise of 6.70% [2] - China Southern Airlines stock is currently priced at 4.580 with a rise of 4.33% [2] - Air China stock is currently priced at 6.130 with a rise of 4.25% [2] - According to Xinda Securities, the fourth quarter is entering a low season primarily driven by business travel, and a low base from last year may lead to significant year-on-year improvements, supporting the recovery of unit revenue for airlines [1]

Core Viewpoint - The upcoming National Day holiday is expected to boost air travel demand, with online travel booking platforms reporting a more than 30% increase in domestic flight search popularity [1] Group 1: Industry Outlook - The aviation sector is anticipated to benefit from a cyclical recovery in passenger volume and pricing, driven by high load factors and industry initiatives to reduce internal competition, leading to a potential rebound in ticket prices [1] - On the supply side, the introduction of new aircraft is slowing, while the utilization rate of existing aircraft is gradually recovering, resulting in a decline in capacity growth year-on-year [1] - On the demand side, the resilience of business travelers is expected to recover, private travel is performing well, and the silver economy will continue to develop, indicating sustained growth in air travel demand [1] Group 2: Pricing and Revenue Dynamics - With record high load factors and enhanced price regulation by the Civil Aviation Administration, there is a strong foundation for ticket price increases [1] - As the bull market progresses and economic expectations improve, business travel (due to improved corporate profitability) and tourism consumption (due to rising household income) are likely to enhance the fundamentals of airlines, leading to better profitability [1] - Airports are also expected to benefit from the recovery in air travel demand, with both aviation and non-aviation revenues showing significant improvement [1]