Guohai Securities: Demand for air cargo increased steadily, passenger ticket prices turned to growth

The Zhitong Finance App learned that Guohai Securities released a research report saying that currently global demand for cross-border air transportation is still strong, and cargo volume can still maintain a steady increase under pressure from high oil prices; the delivery cycle for new supply-side aircraft is lengthening, and the net growth in the industry's capacity is limited. Under this supply and demand pattern, freight rates are expected to remain stable. If oil prices continue to fall, profits are expected to increase further. From July to August, the ex-factory price of domestic aviation fuel continued to fall month-on-month. Although oil prices are still relatively high, the pressure on airline costs has clearly eased compared to 2026Q2, and concerns about oil prices have abated somewhat. In the early summer travel season, demand growth in the industry was slow and relatively weaker than supply, resulting in a year-on-year decline in tax-inclusive ticket prices. However, as travel demand picked up in the later stages, the year-on-year decline in industry fares gradually narrowed and rectified, and the airline's profitability recovered somewhat. Looking ahead, supply in the industry may continue to tighten in the future. I am optimistic that a steady increase in demand will support a continued recovery in ticket prices, and airline profits may grow flexibly. Maintain the air transport industry's “Recommended” rating.

Guohai Securities's main views are as follows:

Ticket prices for the early summer travel season were under pressure, and ticket prices corrected in the first half of August

1) Industry supply and demand: The industry's capacity increased year-on-year in July. According to the latest industry data for July 2026 released by the Civil Aviation Administration, ASK and RPK were +3.7% and +5.9% year-on-year respectively in July, and the passenger occupancy rate reached 86.3%, +1.8pct year-on-year, and +2.7pct compared to the same period in 2019. Its internal and international turnover in China was +5.3% and +7.9%, respectively.

According to the total operating data for July disclosed by the six major airlines (Air China, China Southern Airlines, China Eastern Airlines, Spring Airlines, Juneyao Airlines, and Hainan Airlines Holdings), the six airlines had +4.1% and +7.1% year-on-year respectively, and passenger occupancy rates reached 86.1%, or +2.4pct year-on-year. Among them, domestic/international and regional ASK were +3.6% and +5.4% year-on-year respectively, corresponding to RPK +6.4% and +8.9%, respectively. The corresponding passenger occupancy rates were 87.2% and 83.2%, respectively, +2.3 pct and +2.7 pct, respectively, and +2.8pct compared to the same period in 2019. Airlines' capacity investment increased during peak season, with high passenger occupancy rates and significant year-on-year increases.

2) Ticket prices: Summer travel ticket prices stopped falling in the first half of August and came back to normal. The average tax-inclusive prices for domestic flights in the industry in June and July 2026 were 805.1 and 834.6 yuan, respectively, +12.3% and -0.7% year-on-year respectively. The bank estimated that the corresponding fuel deduction ticket prices were 602.5 and 678.1 yuan, respectively, -8.1% and -12.1% year-on-year. Demand growth in the early part of the summer travel season was slow, supply was relatively loose, and ticket prices were under pressure. From the beginning of August to August 18, the average tax-inclusive fare for domestic flights was +2.2% year-on-year and -4.5% year-on-year. As travel volume and passenger occupancy rates rebounded, the year-on-year growth rate of fuel prices in the industry gradually corrected. From January 1 to August 18, 2026, the average domestic economy class fare was +6.7% year-on-year, and -1.0% year-on-year.

3) Oil Remittance: Crude oil prices rebounded slightly during the summer season, and the RMB exchange rate continued to strengthen. In terms of oil prices, crude oil prices gradually rebounded in July and August. The average monthly oil price in July reached 84.0 US dollars/barrel, -0.5% month-on-month and +20.7% year-on-year. From the beginning of August to August 20, the average crude oil price reached 86.9 US dollars/barrel. Compared with the average monthly average central price of August 2025, the increase in crude oil prices increased again. From January 1 to August 20, 2026, the cumulative average oil price was 87.0 US dollars/barrel, +23.8% year-on-year. The oil price center is expected to rise throughout the year. In terms of aviation fuel prices, domestic aviation fuel prices continued to drop to 7,581 yuan/ton in August, -5.6% month-on-month and +33.6% year-on-year. In terms of exchange rate, at the end of 2025, the median USD/RMB exchange rate was 7.029. As of August 21, 2026, the median USD/RMB exchange rate was 6.782, 3.52% from the end of 2025, and -0.43% from the end of 2026Q2. The RMB continues to appreciate, and the airline is expected to achieve certain exchange gains.

Airline capacity rebounded during peak season, and net fleet growth slowed

1) Operating conditions: Looking at the current month's situation, July entered the peak summer season, and the capacity of each airline increased year on year; among them, the capacity of the three major airlines (Air China/China Southern Airlines/China Eastern Airlines, same everywhere) increased 4% to 5% year on year. In terms of passenger occupancy rates, the overall passenger occupancy rates of the six major airlines increased month-on-month and year-on-year in July, with airline passenger occupancy rates above 85%.

According to the cumulative situation, Spring Airlines' total ASK growth rate from January to July was 14.1% year-on-year. The growth rate of all other airlines was within 5%, and the increase in capacity was limited. In terms of passenger occupancy rates, airline passenger occupancy rates for domestic and international routes are at a high level. With the exception of China Southern Airlines, which declined slightly year on year, the passenger occupancy rate of all other airlines at home and abroad increased year on year. The passenger occupancy rate of Air China reached 4.2 pct year on year.

2) Fleet introduction: In July, Air China, China Southern Airlines, China Eastern Airlines, Juneyao Airlines, and HNA Holdings introduced 2, 8, 2, 1, and 2 airliners respectively. Spring Airlines did not introduce new aircraft; in terms of net increase, Air China, China Southern Airlines, Juneyao Airlines, and HNA Holdings all added a net increase of 1 airliner. The six major airlines have a total net increase of 4 airliners, including 2 of the three major airlines. Looking at the cumulative total from January to July, the six major airlines have a total net increase of 33 airliners.

Risk Alerts

Geopolitical risk, risk of macro-environmental fluctuations, risk of travel demand falling short of expectations, risk of industry supply exceeding expectations, risk of rising ticket prices falling short of expectations, increased risk of market competition, risk of sharp rise in oil prices, risk of sharp devaluation of RMB, and risk of profit forecasting.