Wanlian Securities: The sector has great resilience and suggestions to actively focus on the aviation industry

The Zhitong Finance App learned that Wanlian Securities released a research report saying that passenger traffic volume and ticket prices remained resilient during the peak summer travel season, the US-Iran negotiations continued, the rise in oil prices still suppressed the aviation sector. The aviation sector is under pressure in the short term but the long-term supply and demand pattern improvement trend has not changed. The current sector valuation is at a historically low level, such as the subsequent fall in oil prices, and the core factors suppressing aviation stocks have been mitigated. The sector is highly resilient, and active attention is recommended.

The main views of Wanlian Securities are as follows:

The overall performance of the industry is relatively stable

From January to July 2026, the total turnover of civil aviation reached about 99.09 billion tons and kilometers, up 6.40% year on year, the same as the previous value. Domestic routes in China increased 2.30% year on year, 0.4 pct higher than the January-June growth rate, and 13.30% higher than the January-June growth rate, down 0.8 pct from the January-June growth rate. Passenger traffic from January to July 2026 reached 450 million passengers, up 1.50% year on year, 0.5 pct higher than the January-June growth rate. Among them, 47.755 million passengers were completed on international routes, up 5.20% year on year, down 0.5 pct from the January-June growth rate. Passenger traffic on domestic routes increased 1.10% year on year, up 0.6 pct from January to June.

The capacity investment and demand-side growth rate of listed airlines increased in January-July

From the perspective of listed airline data, the six listed airlines' RPK and ASK changed +5.2% and +2.8% year-on-year respectively in January-July, up 0.4 pct and 0.2 pct, respectively. Their domestic routes in China changed +2.9% and +1.7% year over year, and international routes changed +11.2% and +5.9% year over year. The January-July RPK growth performance of 6 listed airlines: Chunqiu (16.6%) > Air China (7.5%) > China Eastern Airlines (4.7%) > China Southern Airlines (3.4%) > Hainan Airlines (0.3%); ASK growth performance in January-July: Chunqiu (14.1%) > China Southern Airlines (4.2%) > China Eastern Airlines (2.1%) > Hainan Airlines (-1.3%).

The average ticket price performance during the summer travel season is still resilient

According to flight manager data, the cumulative average ticket price for the 54-day summer travel season was 861.7 yuan, up 0.5% from the previous year, down 7.6% from 2019. The overall performance is still resilient. It is expected that as the supply and demand pattern improves, ticket prices will continue to pick up.

Passenger occupancy levels have risen further

In January-July, China's civil aviation passenger occupancy rate was 85.80%, up 1.6 pct from the previous year, and 0.1 pct higher than in January-June. From the perspective of listed airline data, the overall passenger occupancy rate level of the six listed airlines in January-July was 85.79%, up 0.06pct from January-June. Specifically, the passenger occupancy rates of the six airlines in January-July are: Chunqiu (92.71%) > Jixiang (87.11%) > China Eastern Airlines (86.97%) > China Southern Airlines (84.79%) > China Southern Airlines (84.79%) > Hainan Airlines (84.43%); July passenger occupancy level: Chunqiu (93.31%) > Jixiang (87.72%) > China Eastern Airlines (87.11%) > China Southern Airlines (85.20%) > Air China (85.00%).

The total number of aircraft introduced by the six listed airlines in July increased by a total of 4 aircraft

As of the end of July 2026, the number of aircraft operated by the six listed airlines was 3417.00, an increase of 1% over the end of the previous year, a net increase of 33 aircraft. There was a net increase of 4 aircraft in July, and China Southern Airlines, Air China, Hainan Airlines and Juneyao Airlines each increased by 1.

Negotiations between the US and Iran are still progressing. Crude oil prices are high, and aviation kerosene prices are expected to rise again from August to September

According to data from Longzhong Information, China Airlines kerosene (factory price (tax included)) was 7581.00 yuan/ton on August 1, down 5.6% from July 1 and 34% from the May 1 high. However, with the recovery in oil prices, aviation kerosene prices are expected to rise from August, raising air transportation costs.

Risk factors: Economic recovery falls short of expectations, international route recovery falls short of expectations, large fluctuations in oil prices, large exchange rate fluctuations, aviation safety, etc.