Chinese Aviation_ CAAC – Slot Plans for 2024_25 W_S Season

Summary of Key Points from the Conference Call Industry Overview - Industry: Chinese Aviation and Transportation - Date: October 13, 2024 Key Insights on Capacity and Slots - CAAC Slot Plans for 2024/25: - Domestic slots are projected to decline by 1% year-over-year (YoY), with a 24.2% increase compared to 2019 levels. In the previous season, there was a 0.7% YoY increase to 29.5% above 2019 levels [2] - International passenger slots are expected to grow by 5% YoY, reaching 77% of 2019 levels, while regional passenger slots are anticipated to drop by 13% YoY to 80% of 2019 levels [2] Performance of Chinese Airlines - Domestic Slots: - Spring season shows a 7% YoY decline in domestic slots, with the "Big 3" airlines experiencing a reduction of 4% to 2% YoY. Compared to 2019, the Spring season shows a 51% increase, with the Big 3 up by 13% to 25% [3] - Overall, regional slots are expected to be at 94% of 2019 levels, and international slots at 88% of 2019 levels [3] Airport Performance Insights - Shanghai: - Chinese airlines' international routes are only 8.5% below 2019 levels, while foreign airlines remain 32.5% below. Domestic slots are 15% above 2019 levels, affected by capacity constraints at Hongqiao Airport [4] - Guangzhou: - Domestic slots are projected to be 21% above 2019 levels, while international routes for Chinese airlines are 20% below 2019 levels [4] - Beijing: - Domestic slots are 26% above 2019 levels, but international routes for Chinese airlines remain 21% below 2019 levels [4] - HMIA: - Domestic slots are 25% above 2019 levels, outperforming Sanya's 16% increase [5] Analyst Ratings and Coverage - Analyst Ratings: - The report includes various stock ratings for companies in the aviation sector, with a focus on relative performance expectations over the next 12-18 months [9][10] - Investment Banking Clients: - Morgan Stanley has received compensation from several airlines, indicating potential conflicts of interest in their research [11] Additional Considerations - Market Dynamics: - The recovery of non-domestic capacity is noted, but demand headwinds amid macroeconomic challenges are acknowledged [2] - Regulatory Disclosures: - The report includes important disclosures regarding the relationships between Morgan Stanley and the companies covered, emphasizing the need for investors to consider potential conflicts of interest [12][13] This summary encapsulates the critical insights and data points from the conference call, providing a comprehensive overview of the current state and outlook of the Chinese aviation industry.