Core Viewpoint - The aviation industry in China is experiencing a recovery in demand, with significant improvements in passenger load factors and a stabilization of domestic ticket prices following the conclusion of major foreign affairs activities in early September [1][4]. Industry Dynamics - In August, the aviation demand continued to grow year-on-year, with supply growth limited, leading to record-high passenger load factors and significant improvements compared to previous months [1]. - The six listed airlines in A-shares reported an increase in Available Seat Kilometers (ASK) and Revenue Passenger Kilometers (RPK) by 4.8% and 5.5% year-on-year, respectively, with an overall passenger load factor of 86.9%, up by 0.6 percentage points [2]. - Domestic routes saw a year-on-year ASK/RPK increase of 1.7% and 2.8%, respectively, with a passenger load factor of 88.3%, reflecting a 0.9 percentage point increase compared to the previous year [2]. - International routes exceeded 2019 levels, with ASK/RPK growth of 13.3% and 13.4% year-on-year, indicating a recovery rate above 100% [2]. Performance Metrics - The aircraft utilization rate in August was reported at 8.9 hours, an increase of 1.0 hours year-on-year, with wide-body aircraft utilization up by 1.8% and narrow-body down by 0.4% [3]. - The domestic passenger load factor reached a historical high of 88.3%, up by 0.9 percentage points year-on-year and 1.0 percentage point compared to 2019 [3]. - Ticket prices for domestic economy class decreased by 5.5% year-on-year, while international ticket prices dropped by 14% [3]. Fleet Expansion - The fleet of the six listed airlines increased by 0.4% month-on-month, with a total of 3,329 aircraft managed as of August 2025, reflecting a net increase of 14 aircraft [3]. - The main aircraft types introduced were the A320 and B737 series, with a total of 16 narrow-body aircraft added [3]. Investment Recommendations - Continuous monitoring of demand recovery is advised, particularly regarding sales data during the National Day holiday and the performance of business routes post-holiday [4]. - The sustained improvement in demand during the latter half of the summer season, coupled with limited supply growth, is expected to stabilize domestic ticket prices and enhance investment sentiment in the sector [4].