Cinda Securities: Airline passenger occupancy rates continue to be high during the off-season, and a reversal in supply and demand is expected to drive a recovery in ticket prices

The Zhitong Finance App learned that Cinda Securities released a research report saying that since the beginning of 2025, the industry's passenger occupancy rate has continued to be high, and domestic and foreign routes have been booming. The off-season is not easy. Passenger occupancy rates are high, and there has been some correction in ticket prices. The bank believes that airline unit seating capacity may have improved significantly. At the same time, with the implementation of “anti-corruption” measures and the implementation of the China Air Transport Association's Self-Regulatory Convention on Air Passenger Transport, the phenomenon of malicious low prices in the industry is expected to be reduced, and may also drive a restoration of ticket prices, further promoting the recovery of airline unit seats. Coupled with the reduction in costs brought about by falling oil prices, airline profits may increase further. The bank is optimistic about the elasticity of profit recovery brought about by the return of airline seats. The bank is optimistic about investment ratings for the industry.

Cinda Securities's main views are as follows:

The passenger occupancy rate continues to be high during the off-season, and ticket prices have declined slightly

1) Supply and demand: The growth rate of capacity has rebounded, and the passenger occupancy rate has increased at a high level. According to the latest industry data for October 2025 released by the Civil Aviation Administration, the industry ASK and RPK were +6.2% and +8.9%, respectively, in October 2025. Compared with the same period in 2019, +17.3% and +23.4%, the corresponding passenger occupancy rate reached 87.4%, +2.2pct year on year, and +4.3pct compared to the same period in 2019.

According to the total operating data for November disclosed by the six major airlines (Air China, China Southern Airlines, China Eastern Airlines, Chunqiu, Jixiang, and Hainan Airlines), the six airlines had +7.0% and +10.3% year-on-year respectively, and the passenger occupancy rate reached 85.6%, or +2.6 pct year-on-year. Among them, domestic/international and regional ASK were +4.2% and +13.9% year-on-year respectively, corresponding to RPK +6.8% and +19.6%, respectively. The corresponding passenger occupancy rates were 86.6% and 83.2%, respectively, +2.1 and +4.0pct year-on-year, respectively, and +3.6 and +6.4 pct, respectively, compared to the same period in 2019.

2) Fares: Low season ticket prices weakened in December. Since the beginning of 2025 (as of 12.15), the average domestic ticket price is 839 yuan, -7.0% year-on-year. Since December (as of 12.15), the average price of domestic flights containing oil is 709 yuan, -6.2% year on year, and ticket prices have weakened.

3) Oil Remittance: The average price of aviation fuel rose slightly in December, and the RMB exchange rate strengthened. In terms of oil prices, the factory prices of domestic aviation fuel in October, November, and December were 5572, 5625, and 6045 yuan/ton, respectively, -0.1%, 0%, and +3.9% year-on-year, respectively. In terms of exchange rates, the RMB exchange rate has appreciated since the beginning of 2025. At the end of 2024, the median USD/RMB exchange rate was 7.1,884 yuan. As of December 16, 2025, the median USD/RMB exchange rate was 7.0602 yuan, -1.78% from the end of 2024 and -0.64% from the end of 25Q3. The RMB has continued to appreciate since April.

Airline capacity investment has maintained a steady increase, and domestic and foreign passenger occupancy rates are high

1) Operating conditions: In terms of domestic flights, from January to November 2025, with the exception of Air China and Jixiang, the domestic flight capacity of all airlines declined slightly year on year; passenger occupancy rates continued to be high, and domestic passenger occupancy rates of the three major airlines increased significantly year on year; with the exception of Jixiang, domestic flight turnover of all airlines increased year on year. Among them, Chunqiu and China Eastern Airlines grew at 8.4% and 5.9%.

In terms of international flights, China Eastern Airlines and Jixiang both surpassed the same period in '19. The recovery rates of China Southern Airlines, Chunqiu, and Air China are close to the same period in '19, and there is still a large gap in Hainan Airlines' turnover recovery.

2) Fleet introduction: In November, Air China and China Southern Airlines both introduced 7 aircraft, a net increase of 7 aircraft, making it the highest net increase of the six major airlines. From January to November, China Southern Airlines, Air China Airlines, and China Eastern Airlines had net increases of 47, 26, and 21 airliners respectively, while Chunqiu, Jixiang, and Hainan Airlines had net increases of 5, 2, and 14 airliners respectively.

Risk factors: The growth in travel demand falls short of expectations, the increase in ticket prices falls short of expectations, the risk that industry supply exceeds expectations, the risk that market competition will increase the risk, the risk of a sharp rise in oil prices, and the risk of a sharp devaluation of the RMB.