CITIC Securities: Double-digit growth in civil aviation passenger flow, good performance expected during the summer travel season.

The research report from CITIC Securities stated that the demand for travel during the May Day holiday in 2025 will be strong. The Ministry of Culture and Tourism predicts that the number of domestic tourists is expected to exceed 350 million, a year-on-year increase of more than 15%. According to statistics from the Ministry of Transport, the number of people traveling across regions in the first three days of the holiday increased by 4.9% year-on-year, with air and railway traffic increasing by 12.5% and 10.5% respectively, exceeding expectations before the holiday. The holiday air travel utilization rate has reached a historic high, with the narrow-body aircraft utilization rate on May 1st increasing by 0.7 hours compared to 2019. Due to limited supply and optimization of airline revenue strategies, prices are expected to be more stable, with the research report predicting that the average full fare for the holiday will decrease by up to 5% year-on-year. At the same time, stimulated by the visa-free policy, cross-border tourism is heating up in both directions. In the first three days before the holiday, the recovery rate of international flights has reached 91%, and the civil aviation summer transport performance is expected to be promising. The disruption in Boeing deliveries further limits supply growth, with the research report predicting a decrease in net fleet growth rate to 1%-2% in 2025. Additionally, expectations of lower oil prices provide strong support for airline performance. Expectations are for pro-cyclical and consumption-promoting policies to be transmitted to the aviation demand side.