Huatai Securities: Airline summer travel volume increases and prices drop, outlook for economy expected to improve from the bottom.

On September 17, Huatai Securities research report stated that in August, the peak season for airlines, both supply and demand steadily increased, with passenger load factor reaching high levels. The ASK/RPK of the three major airlines (Air China, China Eastern Airlines, China Southern Airlines) plus Spring Airlines and Juneyao Airlines all increased by 5.0%/5.8%, pushing the passenger load factor up by 0.6 percentage points year-on-year to 86.8%. Meanwhile, ticket prices during the summer season performance remained relatively low. According to Flight Manager data, from the 27th week to the 35th week, domestic ticket prices including fuel decreased by 6.5% compared to the same period last year. However, business and public travel demand in September may pick up, and with a lower base, airline ticket price data may improve. In the 37th week, domestic ticket prices including fuel turned positive year-on-year, with an increase of 2.5%. Looking ahead, supply growth will remain at a relatively low level, but if demand improves, coupled with revenue management optimization and a lower base, it is recommended to invest in the aviation sector that is expected to improve at the bottom of the cycle.