Summary of Key Findings from the Survey on Chinese On-Demand Delivery Behavior Industry Overview - **Industry**: Chinese On-Demand Delivery Services - **Survey Conducted By**: Citi's Innovation Lab - **Sample Size**: 1,800 users in China - **Survey Period**: June-July 2025 Core Findings 1. **Increased Order Frequency**: - 47% of daily users reported an increase in order frequency over the past three months, primarily due to more discounts and promotions [1][3][18] 2. **Leading Platforms**: - **Meituan**: Dominates the market with 68% of users for food delivery and 72% for non-food categories, attributed to the variety of restaurant choices [1][4][75] - **Taobao Shangou**: Captures a higher percentage of female users and younger demographics, achieving the highest Net Promoter Score (NPS) at 70 [1][5][49] - **JD Takeaway**: Despite being available for less than six months, it was used by 61% of respondents [1][75] - **Ele.me**: Holds a smaller market share with 13% for food delivery [4][41] 3. **User Demographics**: - 56% of respondents order food for themselves, while 36% order for two people [35] - The age distribution shows Taobao Shangou attracting younger users (37% aged 18-29), while Meituan is favored by older users (45-59 and 60+) [49][54] 4. **Spending Patterns**: - Average spending per order: - Food delivery: Rmb30-49 for 46% of users, Rmb10-29 for 33% [2][32] - Non-food delivery: Average spending at Rmb180, with 43% spending Rmb50-149 [62][63] 5. **Order Timing**: - Most common ordering times: 72% for lunch, 56% for dinner, and notable percentages for afternoon tea (35%) and supper (27%) [34][75] 6. **Reasons for Choosing Delivery Services**: - Availability of restaurants is the most important factor (43%), followed by delivery speed (21%) and price (19%) [33][41] 7. **Expectations for Future Ordering**: - 39% of users expect to order somewhat more this year, while 42% plan to maintain their current frequency [22][25] Additional Insights - **Concerns Affecting Order Frequency**: - Users ordering less frequently cited food safety (42%) and decreased food quality (32%) as primary concerns [19][24] - **Market Dynamics**: - The total addressable market (TAM) and higher penetration rates are expected to sustain despite normalizing subsidies, indicating a positive trend for profitability across platforms [74] - **Competitive Landscape**: - Meituan's strength lies in its extensive restaurant options, while JD is recognized for faster delivery and customer service [43][54] Conclusion - The survey indicates a robust growth trajectory for the on-demand delivery market in China, with Meituan and Taobao Shangou leading in user preference and satisfaction. The findings suggest a competitive landscape where user behavior is influenced by promotions, service quality, and product availability, with expectations for continued growth in order frequency and market penetration.

Financial Data and Key Metrics Changes - The company reported a year-over-year increase in RASM of 1.3%, which was within initial guidance, while ASMs decreased by 4.3% year-over-year [15][22] - The company ended the quarter with a strong liquidity position, representing 42% of trailing twelve-month revenue, the strongest liquidity ratio in the industry [12][30] - CASM ex-fuel grew by 8.3% year-over-year, better than the initial guidance midpoint of 9% [34][35] Business Line Data and Key Metrics Changes - The premium segment performed exceptionally well, with premium RASM, including Mint and Even More, outperforming core RASM by high single digits [18][19] - Loyalty revenues grew by 9%, supported by new partnerships and the launch of a premium co-branded credit card [19][20] - The international flying segment showed stronger performance, with Transatlantic RASM up 28% year-over-year [16] Market Data and Key Metrics Changes - The Northeast market experienced a slowdown in demand, impacting bookings more than other regions [49][50] - Domestic markets showed weakness, while international markets, particularly in Latin America, performed relatively better [16][22] - The company observed a wider spread between peak and trough unit revenues, with peak RASM up high single digits and off-peak RASM declining double digits year-over-year [22] Company Strategy and Development Direction - The company is committed to its long-term strategy, Jet Forward, which aims to drive transformational change and achieve breakeven operating profitability [9][10] - The company is adjusting capacity to better match supply with demand, having made significant capacity cuts in response to changing booking patterns [10][14] - The focus remains on enhancing customer loyalty and brand strength, with initiatives under Jet Forward showing early signs of success [19][26] Management's Comments on Operating Environment and Future Outlook - Management noted that the current macroeconomic environment remains unpredictable, leading to a cautious approach in reaffirming full-year guidance [6][7] - The company is leveraging past experiences from the 2008 financial crisis and the COVID-19 pandemic to navigate current challenges [7][10] - Management expressed optimism about the resilience of the premium segment and loyalty program, which are expected to provide stability amid economic uncertainty [24][26] Other Important Information - The company has deferred $3 billion in capital expenditures, pushing out A321neo deliveries to the 2030s to focus on returning to profitability [12][30] - The company is actively exploring adjustments to its fleet plan to preserve cash and enhance operational flexibility [32][33] Q&A Session Summary Question: When did the change in booking patterns start and what adjustments were made? - Management noted that booking slowdowns were observed in January, leading to aggressive capacity cuts in February and March [43][45] Question: Is the slowdown in demand specific to certain geographies? - Management indicated that the Northeast region is experiencing a more pronounced slowdown compared to other areas, impacting capacity strategy [49][50] Question: Can you provide a range for second-half capacity outcomes? - Management refrained from providing specific guidance but indicated that capacity would be measurably down from initial expectations [55][56] Question: What benefits are expected from the domestic partnership? - Management highlighted that the partnership would enhance network opportunities for TrueBlue points, improving customer utility [58][59] Question: What is the status of the Pratt and Whitney compensation situation? - Management reported that there are currently 10 aircraft on the ground, with improvements noted in operational performance, but compensation discussions remain fluid [78][81] Question: Will there be new market entries this year? - Management confirmed that multiple new routes are expected to be announced later in the year [83] Question: What is the outlook for the spread between premium and core RASM? - Management expects continued growth in premium RASM, with hopes that core RASM will also improve, maintaining the spread [87][88] Question: How is VFR demand performing in Latin America? - Management reported that VFR traffic remains stable, with no significant drops observed in key markets [93]