Investment Rating - The report maintains a positive outlook on the aviation sector, indicating it is entering a golden era [3][10]. Core Insights - Passenger volume has reached a historical high, demonstrating strong demand resilience, with an average daily passenger flow of 2.11 million people, a year-on-year increase of 6% [3]. - The average domestic ticket price is 1,010 yuan, reflecting a 3% year-on-year increase [3]. - The supply side remains constrained, with limited increases in seat capacity, averaging 82.4% occupancy rate, up 2 percentage points year-on-year [3]. - The report anticipates continued strong performance in passenger volume and pricing during the peak travel period, with daily passenger numbers exceeding 2.3 million during the holiday [3]. - The report highlights significant growth in non-first-tier tourist airports, with passenger flow at Chaozhou Airport increasing by 30% and Nanning Airport by 26% [3]. - The aircraft supply chain faces ongoing challenges, with a significant gap between demand and supply for new aircraft and engine maintenance [3]. - The report recommends investing in the aviation sector, citing high passenger load factors and a confirmed growth trend in inbound and outbound travel [3][10]. Summary by Sections Passenger Volume and Pricing - Domestic passenger volume has reached a record high, with an average daily flow of 2.11 million people, a 6% increase year-on-year [3]. - The average ticket price is 1,010 yuan, up 3% year-on-year [3]. - The report expects continued strong performance in passenger volume and pricing during the holiday peak [3]. Supply Chain Challenges - The aircraft supply chain remains under significant pressure, with production not meeting the dual demands of new aircraft deliveries and maintenance [3]. - Airbus has adjusted its 2027 production guidance due to engine delivery issues, indicating ongoing supply constraints [3]. Investment Recommendations - The report recommends a focus on the aviation sector, highlighting the potential for a golden era due to high load factors and increasing travel demand [3][10]. - Specific companies recommended for investment include China Southern Airlines, China Eastern Airlines, Spring Airlines, and others [10].

Core Insights - The aviation sector has been on a continuous upward trend since Q4 2025, driven by strong high-frequency data performance and improved market expectations, with the aviation transportation index rising by 10% since September 30, 2025 [11] - The current supply constraints are expected to lead to a prolonged period of tight supply, with historical comparisons indicating that this cycle's sustainability will exceed previous cycles [4][11] - The supply-demand mismatch in the aviation industry is anticipated to become more pronounced over time, leading to significant price elasticity and performance improvements that may exceed market expectations [4][12] Group 1: Supply Constraints and Capacity - Supply constraints have become evident, with domestic passenger traffic growth slowing to approximately 680 million passengers in 2025, a 4% year-on-year increase, indicating that supply limitations are restricting growth [18] - The passenger load factor reached a historical high of 87.5% in August 2025, with limited capacity for further increases, reflecting the tight supply environment [45] - The average age of the aircraft fleet is increasing, with over 640 aircraft expected to retire by 2030, exacerbating supply constraints as existing orders are insufficient to meet replacement needs [12][49] Group 2: International Demand Recovery - Cross-border passenger traffic is recovering rapidly, with an estimated 130 million passengers in 2025, a 15% year-on-year increase, driven by strong inbound tourism and a low base from the previous year [31] - The domestic airlines have significantly increased their share of international flights, with domestic airlines operating 104% of 2019 levels compared to only 65% for foreign airlines [34] - The international demand is expected to be a core growth engine in 2026, supported by the expansion of visa-free policies that have led to a surge in foreign visitors [3][49] Group 3: Investment Recommendations - The aviation sector is recommended for investment due to strong supply logic and limited growth in fleet size, with significant performance improvement potential driven by demand elasticity and external factors such as oil prices [4][11] - Specific airlines such as China Eastern Airlines, China Southern Airlines, Air China, Spring Airlines, Huaxia Airlines, and Juneyao Airlines are highlighted as key investment opportunities [4] - The report also suggests monitoring global aircraft leasing companies and airport sectors with improving performance [4]