Investment Rating - The report maintains an "Overweight" rating for the transportation industry [4] Core Viewpoints - The transportation sector is expected to see a long-term improvement in demand, driven by strong travel intentions during holidays and a significant increase in passenger flow [1][2] - The recovery in air travel demand is evident, with domestic passenger volume showing resilience and international flight numbers increasing significantly [2][3] - The supply of aircraft is expected to grow at a low rate due to manufacturing constraints, which will limit capacity expansion in the aviation sector [2] - The decline in oil prices is beneficial for airline profitability, and ongoing regulatory measures against excessive competition are anticipated to support ticket price recovery [3] Summary by Sections Passenger Flow and Travel Intentions - The National Day and Mid-Autumn Festival holiday period is projected to see a record 2.432 billion people traveling, with a daily average increase of 6.2% year-on-year [1] - Civil aviation passenger volume reached 19.138 million during this period, with daily averages showing a year-on-year increase of 4.1% compared to 2024 and 26.9% compared to 2019 [1] Flight Operations and Capacity - As of October 14, 2025, the daily average of civil aviation flights is 15,539, a 3.73% increase from the same period in 2024 [2] - The average seat occupancy rates for major airlines have improved, with September 2025 showing an average of 85.7%, up 5 percentage points from 2019 [1][3] Pricing Trends - The average ticket price for domestic economy class in September 2025 was 697 RMB, a 0.6% increase year-on-year, indicating a recovery from previous declines [1] - During the holiday period, the average ticket price was 849 RMB, reflecting a slight increase compared to 2019 [1] Supply Constraints - Global aircraft deliveries are expected to remain constrained, with Boeing and Airbus projected to deliver 348 and 766 aircraft respectively in 2024, representing a year-on-year decline of 34.1% and an increase of 4.2% [2] - The introduction of the C919 domestic aircraft and the aging fleet will further limit capacity expansion in the aviation sector [2] Profitability and Policy Impact - The reduction in jet fuel costs due to falling oil prices is expected to enhance airline profitability [3] - The "anti-involution" policy in the civil aviation sector aims to stabilize ticket prices and improve overall market conditions [3]

Core Insights - The summer travel season in 2025 has seen a significant increase in passenger traffic, with July recording 71.2 million passengers, marking a historical high and a year-on-year growth of 3.0% [1][12] - The domestic aviation market is characterized by a substantial increase in flight operations, with a total of 524,000 flights in July, reflecting a 3.5% year-on-year increase [1][12] - Despite the increase in passenger volume, average ticket prices for domestic economy class have decreased by 7.5% year-on-year, indicating a competitive pricing environment among airlines [12][14] Passenger Traffic and Flight Operations - In July, the domestic airlines operated 524,000 flights, with an average of 16,900 flights per day, showing a 3.5% increase year-on-year [1] - The passenger transport volume reached 71.2 million, with domestic flights growing by 2.0% and international flights by 13.1% [1][12] - Among 39 domestic airlines, 28 reported positive growth in flight operations, with some airlines like Spring Airlines and Tianjin Airlines exceeding 10% growth [3] Airport Performance - Out of 40 major airports, 27 experienced a year-on-year increase in flight operations, with Wenzhou Longwan and Fuzhou Changle airports leading with growth rates of 16.2% and 8.7% respectively [5] - The total passenger throughput at these airports reached 115 million, a 2.5% increase year-on-year [5] Regional Travel Trends - The popularity of travel to Xinjiang has surged, with significant increases in flight capacity to the region, showing a 12% year-on-year growth in inbound capacity [8][11] - The demand for travel to Xinjiang is reflected in the increased flight operations at its 26 airports, with many experiencing growth rates exceeding 40% [11] Pricing Trends - The average ticket price for domestic economy class in July was 840 yuan, down 7.5% year-on-year and 5.0% compared to pre-pandemic levels in 2019 [12][14] - The top 20 domestic routes showed a wide range of average ticket prices, with 19 routes experiencing price declines, indicating a competitive market environment [12][14] International Market Recovery - The international flight market is still recovering, with July seeing approximately 61,000 international flights, which is 89.1% of the volume from 2019 [17] - Southeast Asia and East Asia accounted for 75.3% of international outbound flights, with Japan showing a recovery rate exceeding 100% [17][18]