Investment Rating - The report maintains a "Buy" rating for the airline sector, highlighting the potential for price recovery driven by improved supply-demand dynamics [6][10]. Core Insights - In September 2025, the airline industry experienced a significant increase in passenger load factors, with domestic and international routes reaching record highs. The combined ASK/RPK for six listed airlines grew by 4.0% and 7.1% year-on-year, respectively [3][12]. - The report emphasizes the tight supply-demand relationship, with a notable recovery in business travel demand contributing to price increases. The domestic passenger load factor reached 87.3%, up 2.1 percentage points year-on-year, marking the highest level for September in history [4][13]. - The report suggests that the industry is entering a critical phase where supply constraints may lead to sustained price improvements, particularly in the fourth quarter of 2025 [5][24]. Summary by Sections Passenger Load Factors and Pricing - The report indicates that high passenger load factors in September have led to price increases, with domestic economy class ticket prices rising by 2.4% year-on-year. International ticket prices, however, saw a decline of 15.2% [4][13]. - The domestic load factor for the six airlines reached 87.3%, which is 3.9 percentage points higher than the same period in 2019, reflecting strong demand recovery [4][12]. Fleet Expansion - The total fleet of the six listed airlines increased by 0.3% in September 2025, with a net addition of 11 aircraft. The primary models introduced were the A320 and B737 series [5][24]. - China National Airlines led the fleet expansion with a net increase of 5 aircraft, while Eastern Airlines added 2 aircraft during the same period [26][28]. Investment Recommendations - The report advises investors to focus on the sustainability of price improvements in the fourth quarter, particularly for business routes. The recovery in business travel is expected to enhance investor sentiment in the sector [5][24]. - Key airlines to watch include China Eastern Airlines, China Southern Airlines, and Spring Airlines, among others [5][6].

Core Viewpoint - The company has experienced a decline in stock price and is facing challenges with aircraft utilization due to engine issues, but it has reported a significant increase in net profit for Q2 2025 compared to the previous year. Group 1: Stock Performance - As of August 29, 2025, the company's stock closed at 12.6 yuan, down 0.71% from the previous week [1] - The stock reached a high of 12.87 yuan and a low of 12.37 yuan during the week [1] - The current market capitalization is 27.518 billion yuan, ranking 7th in the aviation sector and 678th among A-shares [1] Group 2: Aircraft and Operations - The company plans to continue optimizing its route network and will announce new international routes in its operational data releases [2] - The company has seen a nearly 40% increase in net profit for Q2 2025 compared to the same period last year, attributed to increased international capacity and improved passenger load factors [2][4] - The company is adjusting its flight schedules and aircraft types to compensate for reduced aircraft utilization due to engine maintenance issues [3][4] Group 3: Strategic Partnerships - The company aims to enhance its competitive edge through ongoing strategic partnerships, including code-sharing and domestic route collaborations [2]