Huachuang Securities: Multiple positive factors help boost the performance of aviation stocks and are optimistic about the release of industry profit elasticity.

Huachuang Securities released a research report stating that with the growth of domestic demand, continuous recovery of international routes, and a decrease in oil prices reducing costs, aviation stocks may usher in investment opportunities. The firm continues to be optimistic about China Express Airlines (002928.SZ), a leading player in the domestic feeder market, reaching a sustainable operational turning point; optimistic about low-cost airline leader Spring Airlines (601021.SH), leveraging its low-cost core competitive advantage to optimize "traffic-cost-price" dynamics; waiting for the release of elasticity from the three major airlines represented by Air China Limited (601111.SH); bullish on the leading recovery of international routes, with efficient operation of wide-body aircraft likely to boost the release of elasticity for Juneyao Airlines (603885.SH). The main points of Huachuang Securities are as follows: 1. High-frequency data tracking: In the past 7 days, the daily average passenger volume of domestic civil aviation increased by 1.6% year-on-year, while the daily average flight volume decreased by 1.8% year-on-year. The domestic daily seat occupancy rate was 84.4%, up 3.1% year-on-year. The cross-border daily average passenger volume has recovered to 82.8% of 2019 levels, the cross-border flight volume has recovered to 81.5% of 2019 levels, and the cross-border seat occupancy rate is 80.1%, up 0.7% from 2019. The full ticket price (including fuel) for domestic civil aviation decreased by 3.4% year-on-year, while the cross-border full ticket price increased by 8.5% year-on-year. 2. Analysis of airlines' data for March: Overall: March: ASK year-on-year: Eastern Airlines (6.7%) > Juneyao Airlines (4.5%) > Southern Airlines (3.1%) > Spring Airlines (1.7%) > Air China (0.4%), RPK year-on-year: Eastern Airlines (10.5%) > Southern Airlines (6.1%) > Juneyao Airlines (3.4%) > Air China (2.0%) > Spring Airlines (1.8%); January-March cumulative: ASK year-on-year: Spring Airlines (6.9%) > Juneyao Airlines (6.7%) > Eastern Airlines (6.5%) > Southern Airlines (4.9%) > Air China (2.6%), RPK year-on-year: Eastern Airlines (10.9%) > Southern Airlines (7.9%) > Spring Airlines (6.2%) > Juneyao Airlines (5.0%) > Air China (3.5%). 1) Domestic routes: March: ASK year-on-year: Eastern Airlines (-1.4%) > Southern Airlines (-3.2%) > Spring Airlines (-4.9%) > Air China (-4.9%) > Juneyao Airlines (-9.5%), RPK year-on-year: Eastern Airlines (3.4%) > Southern Airlines (0.6%) > Air China (-1.3%) > Spring Airlines (-4.1%) > Juneyao Airlines (-8.4%); January-March cumulative: ASK year-on-year: Southern Airlines (-1.1%) > Eastern Airlines (-1.4%) > Spring Airlines (-3.3%) > Air China (-3.5%) > Juneyao Airlines (-9.3%), RPK year-on-year: Eastern Airlines (3.5%) > Southern Airlines (2.0%) > Air China (-1.6%) > Spring Airlines (-2.9%) > Juneyao Airlines (-8.9%). 2) International routes: March: ASK year-on-year: Juneyao Airlines (64.6%) > Spring Airlines (42.0%) > Eastern Airlines (28.4%) > Southern Airlines (25.5%) > Air China (15.7%), RPK year-on-year: Juneyao Airlines (57.7%) > Spring Airlines (39.1%) > Eastern Airlines (29.4%) > Southern Airlines (25.5%) > Air China (11.2%); January-March cumulative: ASK year-on-year: Juneyao Airlines (80.2%) > Spring Airlines (66.1%) > Eastern Airlines (28.7%) > Southern Airlines (26.0%) > Air China (21.6%), RPK year-on-year: Juneyao Airlines (75.9%) > Spring Airlines (61.6%) > Eastern Airlines (32.1%) > Southern Airlines (29.5%) > Air China (20.0%). 3) Regional routes: March: ASK year-on-year: Air China (2.3%) > Southern Airlines (1.8%) > Eastern Airlines (-6.1%) > Juneyao Airlines (-15.0%) > Spring Airlines (-57.9%), RPK year-on-year: Air China (4.8%) > Eastern Airlines (4.1%) > Southern Airlines (2.3%) > Juneyao Airlines (-9.7%) > Spring Airlines (-56.2%); January-March cumulative: ASK year-on-year: Southern Airlines (5.2%) > Air China (1.3%) > Juneyao Airlines (-4.5%) > Eastern Airlines (-6.6%) > Spring Airlines (-58.1%), RPK year-on-year: Southern Airlines (4.2%) > Eastern Airlines (2.2%) > Air China (1.7%) > Juneyao Airlines (-2.3%) > Spring Airlines (-58.6%). 2. Seat occupancy rate: March: Spring Airlines (89.7%, up 0.1% year-on-year, down 1.7% month-on-month) > Southern Airlines (84.7%, up 2.4% year-on-year, down 2.0% month-on-month) > Juneyao Airlines (84.5%, down 0.9% year-on-year, down 1.0% month-on-month) > Eastern Airlines (84.2%, up 2.9% year-on-year, down 1.0% month-on-month) > Air China (79.7%, up 1.2% year-on-year, down 2.4% month-on-month); January-March: Spring Airlines (90.6%, down 0.6% year-on-year) > Southern Airlines (85.4%, up 2.4% year-on-year) >Auspicious (84.1%, year-on-year -1.4%) > Eastern Airlines (84.0%, year-on-year +3.3%) > Air China (80.2%, year-on-year +0.7%).3. Fleet Size: In March 2025, a total of 5 listed airlines added a net total of 15 aircraft; by the end of March, the fleet size of the 5 airlines increased by 3.0% year-on-year, a 1.2% increase from the end of 2024. Three, trade policy disruptions or disturbances in aircraft deliveries. According to the plans for the introduction and retirement of passenger aircraft by the three major airlines, the three airlines plan to introduce 194 aircraft and retire 79 aircraft in 2025, resulting in a net increase of 115 aircraft. Of these, Boeing plans to introduce 46 aircraft (accounting for 24% of the total introductions) and retire 31 Boeing aircraft. If the net increase in Boeing aircraft is excluded, the growth rate of the three airlines falls to 3.8%; if not factoring in introductions or retirements, the growth rate further decreases to 2.6%. Four, risk warning: significant increases in oil prices and significant depreciation of the RMB.