Zhongtai Securities: Ex-factory prices of aviation fuel fell month-on-month, and airline performance is expected to continue to improve

The Zhitong Finance App learned that Zhongtai Securities released a research report saying that the factory price of aviation fuel fell month-on-month, or that it may ease the cost pressure in the off-season. After the 11th long holiday, civil aviation ushered in a traditional low season, and the operating volume of various airlines and airports basically declined from last week. Recently, the price of Brent crude oil fluctuated sharply, but in October, the factory price of aviation kerosene fell month-on-month. As of October 1, the ex-factory price of aviation kerosene (tax included) was reported at 5,577 yuan/ton. Compared with the previous month's drop of 426 yuan/ton, a month-on-month decrease of 7.10%, compared with a decrease of 2,388 yuan/ton in the same period last year, and 29.98% year-on-year. The drop in the ex-factory price of aviation kerosene may effectively ease the cost pressure on airlines during the off-season.

Overall, the industry's recovery trend is improving this year, and flight operation efficiency continues to improve. As international routes continue to recover, the supply and demand pattern of the entire industry is expected to continue to improve, and the performance of airlines is expected to continue to improve. Furthermore, airports will benefit from a recovery in aviation demand, and aviation revenue and African aviation revenue will improve markedly. We mainly recommend China Airlines (002928.SZ), Spring Airlines (601021.SH), Juneyao Airlines (603885.SH), etc.

The main views of Zhongtai Securities are as follows:

Aviation: The average number of flights operated per day and the average aircraft utilization rate increased or decreased from week to week.

1) From October 7 to October 11, the average number of flights operated per day: China Southern Airlines had 2385.80 flights, a decrease of 4.33%; China Eastern Airlines had 2287.80 flights, a decrease of 6.43%; China Airlines had 1645.00 flights, a decrease of 2.61% week over week; Spring Airlines had 487.60 flights, a decrease of 8.10% week over month; Juneyao Airlines had 384.20 flights, a decrease of 6.19% week over week; Hainan Airlines had 731.80 flights, a decrease of 7.50% week over week; China Airlines had 379.40 flights, up 0.87 from week to month %. 2) From October 7 to October 11, the average aircraft utilization rate: China Southern Airlines 8.30 hours/day, a decrease of 4.60%; China Eastern Airlines 7.70 hours/day, a decrease of 7.23%; Air China 7.80 hours/day, a decrease of 2.50%; Spring Airlines 8.50 hours/day, a decrease of 7.61%; Juneyao Airlines 8.70 hours/day, a decrease of 5.43% from week to month; Hainan Airlines 8.20 hours/day, a decrease of 6.82% from week to week; China Airlines 7.30 hours/day, up 1.39% from week to week.

Airports: Domestic and international routes declined week over week.

1) From October 7 to October 11, the average number of inbound and outbound flights (domestic routes): 1016.20 flights at Shenzhen Bao'an Airport, a decrease of 1.72% from month to month; 910.60 flights at Beijing Capital Airport, a decrease of 2.12%; Guangzhou Baiyun Airport, a decrease of 1.99%; Xiamen Gaoqi Airport had 438.20 flights, a decrease of 9.19% from week to month; Shanghai Pudong Airport had 871.80 flights, a decrease of 4.74% from week to month; Shanghai Hongqiao Airport had 701.00 flights, a decrease of 2.5% from month to month. 2) From October 7 to October 11, the average number of inbound and outbound flights (international routes): 91.60 flights at Shenzhen Bao'an Airport, a decrease of 1.20% compared to the previous week; 192.60 flights at Beijing Capital Airport, a decrease of 0.13% compared to the previous week; 230.20 flights at Guangzhou Baiyun Airport, a decrease of 3.10%; Xiamen Gaoqi Airport had 51.40 flights, a decrease of 5.32% from previous week; Shanghai Hongqiao Airport had 16.00 flights, the same number as last week.

Risk warning:

The exchange rate fell sharply; the domestic economy stalled and declined; the risk of trustworthiness of third-party data; and the risk of untimely updating of information on the use of research reports.