Citigroup released a research report stating that the target prices of Air China Limited, China Eastern Airlines and China Southern Airlines were lowered from HKD 7.1, HKD 3.3, and HKD 4.6 to HKD 5.35, HKD 2.53, and HKD 3.8, respectively. At present, the valuation does not fully reflect the bullish factors of the forecasted ROI improvement from 2024 to 2026. All three airlines are rated as "buy."

According to the report, the domestic passenger load of the three major Chinese airlines increased in May compared with April, while available seat kilometers (ASK) continued to decline on a monthly basis as more carrying capacity was shifted to international routes. The recovery of outbound load for the three airlines improved, and the non-domestic ASK of Air China Limited (00753), China Eastern Airlines (00670), and China Southern Airlines (01055) respectively returned to 84%, 94%, and 82% of 2019 levels. As for outbound, it is expected that the ASKs of the three airlines will recover to 88%, 103%, and 86% of 2019 levels in July, and the industry's overall passenger volume will rise to 77% of 2019 levels in terms of seat capacity.

The bank noted that the prices of domestic and outbound routes chosen by the airlines have significantly increased in summer and are expected to slightly drop after August, but are expected to remain high during the October gold cycle. The bank's preferred order is Air China Limited, China Southern Airlines and China Eastern Airlines, with Air China Limited being the industry's first choice. It is believed that this airline will benefit the most from the recovery of outbound routes, the increased market share of routes to Europe and Japan in 2024, and the focus on transferring passenger volume to international routes to improve overall efficiency and costs.