Guotai Junan Securities: Aviation Summer Peak welcomes first peak in passenger flow, ticket prices and profits expected to rise year-on-year.

Guotai Haitong Securities research report stated that with the start of summer vacation for primary and secondary schools, the recent summer travel season has seen its first peak. It is expected that passenger load factor will continue to increase compared to the same period last year, and domestic ticket prices are rising rapidly. It is expected that due to limited overtime flights during the summer travel season and strong demand for parent-child travel, the supply and demand outlook is optimistic, with passenger load factor and ticket prices expected to increase compared to the same period last year. Considering a 13% year-on-year decrease in jet fuel prices in July, profitability during the summer travel season is expected. Chinese airlines have entered a period of low supply growth, with demand consistently outperforming market concerns since April. Over the next two years, the supply and demand will continue to improve, and a downward trend in oil prices will accelerate the recovery of profitability and price increases. It is recommended to seize opportunities in airline stocks based on fluctuations in oil prices.