Investment Rating - The report maintains an investment rating of "Recommended" for the aviation industry, indicating a positive outlook based on improving fundamentals and demand recovery [1]. Core Insights - The report highlights a strong demand for air travel during the 2026 Spring Festival, with domestic passenger flow increasing by 6.5% year-on-year and international passenger flow by 4.4% [6][9]. - The average domestic ticket price rose by 3.3% to 931 yuan, while the average passenger load factor improved by 1.4 percentage points to 85.5% [9]. - Supply growth is robust, with a 6.9% year-on-year increase in available seat kilometers (ASK) during the Spring Festival period, and aircraft utilization rates have also improved significantly [20]. - The average flight distance increased slightly by 1.7% to 1394 kilometers, contributing to a 1.7% year-on-year improvement in average revenue per passenger kilometer [29]. - International routes, particularly to Southeast Asia and South Korea, have seen rapid growth, with a 5.1% increase in passenger volume [37]. Summary by Sections 1. Overall Demand - The total passenger flow for the first 20 days of the Spring Festival reached 47.49 million, a year-on-year increase of 6.3% [9]. 2. Supply Side - The supply side has expanded orderly, with narrow-body aircraft utilization significantly contributing to growth [20]. 3. Revenue Levels - The average revenue per passenger kilometer improved, reflecting changes in travel patterns and network adjustments [29]. 4. Airports - Ticket prices at major tourist and provincial airports have shown strong growth, with notable increases in passenger numbers [32]. 5. International Routes - There has been a notable increase in passenger flow to destinations like Thailand and South Korea, indicating a recovery in international travel [37]. 6. Oil Prices and Exchange Rates - Brent crude oil prices have risen to 71.8 USD per barrel, while the exchange rate for the US dollar against the offshore yuan has shown slight improvement [39].

Group 1 - The core viewpoint is that the demand for air travel during the Spring Festival travel season is expected to increase significantly, with a projected national civil aviation passenger transport volume of 95 million, averaging 2.38 million passengers per day, representing a year-on-year growth of approximately 5.3% [1] - The airline market is entering a traditional off-peak season after New Year's, with airlines focusing on controlling irrational price competition, leading to a recovery in air traffic and pricing as universities begin to close for winter break [1] - The Spring Festival pre-sale has started, resulting in a significant increase in ticket sales, and the demand for the Spring Festival in 2026 is expected to remain strong, with limited additional flights due to strict control over capacity increases by airlines [1] Group 2 - The late timing of the Spring Festival this year may lead to a differentiated return rhythm among different demographics, with the student group expected to boost market demand as universities begin their winter breaks [2] - Short-term favorable conditions such as oil prices and the "anti-involution" initiative are expected to enhance the outlook for air traffic and pricing, indicating strong investment opportunities in the aviation sector [2] - The domestic civil aviation market is experiencing a slow growth in capacity, but demand is expected to continue its moderate recovery, driving passenger load factors to new highs and leading to a trend of rising ticket prices [2]