CITIC Securities: Civil aviation supply remains low in the second quarter, optimistic about the improvement trend of civil aviation industry prices.

China Post Securities released a research report stating that after entering the second quarter, the growth rate of civil aviation passenger transport volume has rebounded slightly, the industry supply remains low, and the price decline has narrowed. The data for the May Day holiday in civil aviation showed good performance, and the revenue management effectiveness of each airline gradually manifested, showing optimism for the improvement trend in civil aviation prices. The current tariff pressure has temporarily eased, and the trend of oil prices and exchange rates is friendly. Spring Airlines, Juneyao Airlines, and China Express Airlines are recommended, with focus on the performance rebound of major airlines. Key points from China Post Securities: Airlines disclosed their operating data for April 2025. Airlines disclosed their operating data for April 2025. Overall, the flight volume of airlines in April continued to grow, with a slightly faster growth rate than in March. The operating performance among airlines has differentiated, with China Eastern Airlines leading in growth rate among major airlines, and Spring Airlines seeing faster growth than Jiuyao Airlines among private airlines. In terms of passenger load factor, the passenger load factor of the three major airlines continued to rise, with China Southern Airlines and China Eastern Airlines surpassing 85%, while Spring Airlines saw a slight decrease in load factor, and Jiuyao Airlines saw a slight increase. Domestic market remains stable, international market steadily sees increased volume In April 2025, the domestic flight volume of civil aviation significantly recovered compared to March, with a slight increase compared to April 2024. Looking at individual airlines, the overall domestic flight capacity of major airlines saw a slight year-on-year increase in April, with Spring Airlines increasing its domestic flight capacity while Jiuyao Airlines saw a slight decrease. In terms of flight volume and load factor indicators, the passenger transport volume and revenue passenger kilometers of the three major airlines and Spring Airlines have increased, while Juneyao Airlines saw a slight decrease. Except for Spring Airlines, the load factor of each airline overall saw a significant year-on-year increase. The national civil aviation international and regional routes saw a steady year-on-year increase in volume, with major international and regional routes in Japan, South Korea, New Zealand, Malaysia, and Vietnam showing good recovery levels. Among airlines, in the major airlines, Air China and China Eastern Airlines saw a relatively fast year-on-year increase in capacity, while among private airlines, Juneyao Airlines saw a significant shift towards investing in international routes. The load factor of each airline on international routes showed some differences, with China Eastern Airlines, China Southern Airlines, and Jiuyao Airlines seeing an increase in load factor, while Air China and Spring Airlines saw a decrease. In terms of regional markets, due to fluctuations in flight volume in the China Hong Kong and China Taiwan regional markets, the overall capacity allocation of regional routes among airlines saw a slight decrease. Aircraft introduction remains low, oil prices and exchange rates are favorable The overall introduction of civil aviation capacity remains low, with a fleet size of 4,126 civil aircraft in 2024, representing a year-on-year increase of only 2.8%, with a decrease of 9 wide-body aircraft. In the first four months of 2025, a total of 64 civil aircraft were introduced, still maintaining a low level, and the supply growth continues to be slow. In addition, with recent fluctuations in oil prices and stable exchange rates, this is favorable for the performance of civil aviation costs, and it is expected that the performance of civil aviation in the second quarter is likely to improve. Risk warning: Macro economic downturn, drastic fluctuations in oil prices and exchange rates, safety accidents, repeated tariffs.