On the evening of July 15th, multiple listed airlines released announcements disclosing their main operation data for June.

Benefiting from the strong travel demand during the Spring Festival and May Day holidays, the domestic and international travel market has significantly recovered compared with the same period last year, and major airlines have invested more passenger transportation capacity year-on-year.

Ctrip's "2024 Summer Travel Market Forecast Report" shows that the domestic tourism market has maintained steady growth this summer, with hotel and air ticket search heat increasing by more than 20% year-on-year. Long-distance travel is the main force in the summer, and according to current data, it accounts for more than 70%.

Year-on-year growth in passenger transportation capacity investment.

According to announcements from various airlines, China Airlines' passenger transportation capacity investment in June increased by 11.4% year-on-year (calculated by available seat kilometers), a decrease of 1.4% month-on-month; passenger turnover increased by 22.6% year-on-year, an increase of 0.7% month-on-month; and the average passenger load factor was 80.0%, an increase of 7.3% year-on-year and 1.7% month-on-month.

In June, China Southern Airlines' passenger transportation capacity investment (calculated by available seat kilometers) increased by 12.47% year-on-year, with domestic, regional, and international segments increasing by 0.84%, 40.05%, and 75.14% respectively; passenger turnover (calculated by revenue passenger kilometers) increased by 17.97% year-on-year, with domestic, regional, and international segments increasing by 6.86%, 42.39%, and 75.81% respectively; and the passenger load factor was 83.36%, an increase of 3.89 percentage points year-on-year, with domestic, regional, and international segments increasing by 4.72, 1.29, and 0.32 percentage points respectively.

In June, China Eastern Airlines' passenger transportation capacity investment (calculated by available seat kilometers) increased by 16.27%, reaching 108.24% of the same period in 2019; passenger turnover (calculated by passenger kilometers) increased by 27.73% year-on-year, reaching 109.09% of the same period in 2019; and the passenger load factor was 83.44%, an increase of 7.49% year-on-year, compared with a passenger load factor of 82.78% in June 2019.

In June, Spring Airlines had 4.2979159 billion available seat kilometers, an increase of 11.15% year-on-year; transport turnover was 361.8714 million ton kilometers, an increase of 14.27% year-on-year; total number of passengers carried was 2.27739 million, an increase of 15.06% year-on-year; and the passenger load factor was 92.72%, an increase of 2.58% year-on-year.

In June, Juneyao Airlines' passenger transportation capacity investment increased by 8.24% year-on-year, passenger turnover increased by 10.15% year-on-year, and the passenger load factor was 84.99%, an increase of 1.48% year-on-year. Among them, the passenger transportation capacity investment on international routes increased by 127.10% year-on-year, and the passenger turnover increased by 142.43% year-on-year.

It is expected that 0.133 billion passengers will be transported during the summer vacation.

Recently, the Civil Aviation Administration of China held a press conference.

Xu Qing, Deputy Director of the Transportation Division of the Civil Aviation Administration of China, stated at the press conference that the 2024 civil aviation summer passenger transportation started on July 1st and will end on August 31st, lasting 62 days. During the summer peak season, the civil aviation market is expected to continue the peak season trend, and the total passenger transportation volume is expected to reach 1.33 million people, with an average daily passenger transportation volume of 2.15 million people, an increase of 10% from 2019 and 5% from 2023.

From the perspective of popular routes, the domestic civil aviation passenger source is still concentrated on the backbone routes between the four major urban agglomerations of Beijing-Tianjin-Hebei, the Yangtze River Delta, Guangdong-Hong Kong-Macao, and Chengdu-Chongqing; the top five domestic civil aviation booking destinations are Beijing, Shanghai, Chengdu, Guangzhou, and Kunming. With the rapid development of domestic county-level travel and folk culture tourism, the domestic trunk route has become increasingly important to airlines, and tourist cities with regional characteristics such as Altay, Mohe, Turpan, Qinhuangdao, and Arxan have become more popular in the civil aviation market than in previous years.

From the perspective of hot time periods, influenced by factors such as students returning home during the summer vacation, returning to school, parents sending new students to school, and summer tourism, the student flow, tourism flow, and family visit flow will overlap with each other, and the peak is expected to be concentrated in the first ten days of July and the last ten days of August.

It is worth noting that as the summer approaches, the number of international passenger flights is showing a sustained growth trend. From July 1st to July 7th, domestic and foreign airlines operated a total of 6,045 international passenger flights (each round-trip counted as 1 flight), which has returned to nearly 80% of the number in 2019. The passenger flights covered a total of 72 foreign countries, with the number of passenger flights from China to 30 countries, including the UK and the UAE, exceeding the level of 2019. Among them, the number of flights to Egypt, Saudi Arabia, Uzbekistan, Hungary, Greece, Kenya, and Portugal has doubled compared to 2019. Additionally, Bahrain, Kuwait, Serbia, Tanzania, Luxembourg, and Papua New Guinea have been added as new countries in the aviation market.

Recently, China's visa-free "friend circle" has continued to expand, and its stimulation effect on the aviation market has become increasingly evident. In the second quarter, the number of regular passenger flights between countries that implemented visa-free policies to Malaysia, Spain, Hungary, Belgium, Austria, Switzerland, Poland, Kazakhstan, and other countries increased by more than 20% year-on-year. In addition, since the second quarter, Chinese and foreign airlines have successively opened or resumed passenger flights to six countries, including Bahrain, Cuba, Brazil, the Czech Republic, Mexico, and Ireland, further improving China's international airline network accessibility.

It is expected that the civil aviation during this summer vacation will continue to welcome the peak season of international tourism, study abroad, and other markets. Judging from the flight arrangements of domestic and foreign airlines, during the peak summer season, popular international passenger routes will continue to be concentrated in traditional tourist markets such as nearby Japan, South Korea, Southeast Asian countries, etc.; driven by major events such as the Olympics, the number of passenger transportation trips to France has significantly increased, and various airlines have also significantly increased their passenger transportation trips on routes to Denmark, Hungary, Greece and other countries.

Will aviation/airlines stocks take off soon?

Generally speaking, peak seasons such as the Spring Festival, summer vacation, May 1st or October 1st Golden Weeks can bring considerable profits to airlines.

Especially this year, the holiday heat is still strong, and demand is strong. The transportation volume of domestic passengers at multiple nodes has also reached a new high for the same period in previous years.

For airlines, summer vacation is the busiest period for outbound tourism and a key time to improve company performance. However, due to the impact of factors such as capacity improvement, domestic and international ticket prices this summer have shown a trend of year-on-year decline.

For airlines, the summer peak season after the Dragon Boat Festival every year is the peak period for outbound tourism throughout the year, and it is also a key node to improve airline performance. Although this year's summer peak is still hot, it may be due to the continuous capacity increase compared to the same period in 2019.

According to data from the civil aviation travel service platform 'Travel Sky', from July 11th to August 31st, the average price of domestic airline tickets (excluding tax) is about 1012 yuan, a year-on-year decrease of about 8%; the average price of international airline tickets is down by about 6% year-on-year.

At the same time, the three major airlines have also announced in recent notices that they will increase the capacity input of international routes during the summer.

Among them, Air China Limited will launch 13 new international routes during the summer, and the international and regional routes operated by Air China will be restored to more than 90% of 2019, reaching 114 routes, covering 43 countries and regions on six continents, a year-on-year increase of 39.2% compared with 2019. China Eastern Airlines Corporation plans to operate an average of 3,213 passenger transportation flights per day during the summer vacation, a year-on-year increase of 13% compared with the same period in 2019, and its international and regional flights will be restored to 102% of the same period in 2019.

Looking ahead, GTJA pointed out that it is expected to usher in the summer peak season in late July, which is expected to continue until mid-August. During the 2023 summer vacation, airlines' profits are generally expected to reach a new historical high, and the aviation industry's logic of rising ticket prices and profits after supply and demand recover may be verified again during the 2024 summer vacation.