Hong Kong stocks in the Aviation/airlines Industry collectively rose in early trading. As of the time of writing, $AIR CHINA (00753.HK)$up by 3.98%, trading at 5.22 Hong Kong dollars;$CHINA SOUTH AIR (01055.HK)$up by 3.69%, trading at 4.22 Hong Kong dollars; $CHINA EAST AIR (00670.HK)$ up by 2.37%, trading at 2.59 Hong Kong dollars; $BEIJING AIRPORT (00694.HK)$ Up by 1.4%, reported at 2.89 Hong Kong dollars.

In terms of news, GTJA Research Reports pointed out that recent ticket price recovery has become an industry consensus. Observing that airlines' revenue management strategies are showing positive changes, domestic ticket prices rose significantly week-on-week last week, and seat utilization slightly declined. Airlines achieved an increase in domestic seat revenue. Considering the significant year-on-year decline in oil prices, it is estimated that last week's domestic net ticket prices rose over 20% compared to the average from December 2023, and airlines are expected to continue to significantly reduce losses year-on-year. The industry anticipates optimistic supply and demand during the spring festival, and positive revenue management strategies will aid peak season performance, likely catalyzing optimistic expectations. Reaffirming the long-term logic of Aviation, the trend of supply and demand recovery is confirmed for 2025. With consideration for market-driven ticket prices and a slowdown in fleet growth, the rise in profit center will begin.

Listed airlines have recently disclosed their operational data for November. in November, the industry-wide seat utilization rate decreased by about 2.7 percentage points month-on-month but is higher than the 1.6 percentage points of the same period in 2019. SWHY pointed out that the Aviation sector enters into a seasonal low for travel in the fourth quarter, but travel demand remains resilient. Currently, the basic supply and demand fundamentals of the Aviation Sector are in an improving phase, with stable growth in domestic demand and continuous recovery in international demand. The long-term certainty of the supply and demand gap is high. Current oil exchange rates are at a high level with significant downward space. In a relatively optimistic macro environment where sentiment is improving, pro-cyclical symbol in the Aviation Sector is expected to benefit, and this round of cyclical market is likely to start.

Editor/rice