According to a report on December 9 by Cai Lian She (editor Hu Jiarong), benefiting from recent bullish market conditions, most Hong Kong airline stocks have risen. As of the time of publication, Air China Limited (00753.HK), China Southern Airlines (01055.HK), China Eastern Airlines (00670.HK), and Peking Capital Airport (00694.HK) have risen by 7.93%, 5.06%, 5.06%, and 2.84% respectively.

Note: Performance of aviation/airlines industry stocks

In terms of news, there have been frequent bullish developments for the aviation/airlines industry recently, from optimizing the visa exemption policy to the State Council's recent proposal for promoting high-quality development in civil aviation; all these news items have boosted the sector's performance.

First, on November 22, the Ministry of Foreign Affairs announced that from November 30, 2024, to December 31, 2025, ordinary passport holders from Bulgaria, Romania, Malta, Croatia, Black Hills Corp, North Macedonia, Estonia, Latvia, and Japan will be granted visa-free entry. In addition, China has decided to further optimize the visa exemption policy, including exchanges and visits in the reasons for visa-free entry, and extending the visa-free stay from the current 15 days to 30 days. From November 30, 2024, ordinary passport holders from 38 visa-exempt countries can enter China for business, tourism, visiting family and friends, exchanges, or transit for no more than 30 days without a visa.

Moreover, the State Council's executive meeting recently discussed and principled approved the "Civil Aviation Law of the People's Republic of China (Draft Revision)" and decided to present the draft for review by the Standing Committee of the National People's Congress. The meeting pointed out the need to continually improve civil aviation service quality, tap into domestic market potential, effectively implement major investment projects, enhance technology support, and promote high-quality development in civil aviation.

Air China Limited is among the top gainers.

From the chart above, Air China Limited rose by more than 9% at one point and is currently up nearly 8%.

Note: The trend of air china limited.

Everbright believes that since 2024, the demand for domestic routes has maintained a recovery trend, and the demand for international routes has rebounded strongly. In the first three quarters, air china limited's RPK increased by 34% year-on-year, rising 22% compared to the same period in 2019. Among them, domestic route RPK increased by 13%, and international route RPK increased by 168%. The RPK level far exceeded that of the same period in 2019; in Q3 alone, the company's RPK increased by 21% year-on-year, a 29% increase compared to the same period in 2019.

Regarding the RPK mentioned above, it stands for Revenue Passenger Kilometer, which is a comprehensive indicator for measuring passenger transportation volume. Through this indicator, airlines can evaluate their operational efficiency and market performance.

Institutions state that China's tourism demand has largely returned to normal.

Goldman sachs recently published a research report indicating that after two years of post-pandemic normalization, China's tourism demand has largely returned to normal, expecting synchronized growth in outbound and inbound tourism next year. In addition to being bullish for online travel platforms (OTAs), it will promote the development of the hotel and aviation industries. Currently, it is predicted that the stock prices of the tourism, leisure, and transportation sector in china will stabilize from the end of the first quarter of next year, while the valuations of hotels and airlines are expected to see a low rebound.

The United Nations World Tourism Organization released the "World Tourism Barometer" report stating that in the first nine months of 2024, approximately 1.1 billion tourists traveled internationally, restoring the global tourism industry to 98% of pre-pandemic levels, with a full recovery expected by the end of the year.