The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that high oil prices in the 2026Q2 off-season put pressure on industry operations. It is estimated that the oil price transmission ratio is over half. The sharp rise in China-Europe ticket prices helped the transmission of oil prices to be better than expected. Demand for family trips during the summer season is expected to remain resilient, passenger traffic is at a new high, and business improvements can be expected. There is huge room for growth in aviation demand, and boosting consumption and visa-free access to many countries will ensure that demand continues to grow steadily, and improving supply and demand will drive profits upward. It is recommended to seize expectations and long-term logical opportunities with low stock prices, and select high-quality airline network customer sources.
Cathay Pacific Haitong's main views are as follows:
Three major airlines: Oil prices were transmitted by nearly 60% during the Q2 off-season, and the high European boom helped better than pessimistic expectations
The three major companies released quick performance reports, and it is estimated that Air China/China Eastern Airlines/China Southern Airlines lost 41/37/5.2 billion yuan respectively (median value) in Q2. In Q2, industrial operations were under pressure due to high oil prices in the off-season, which suggested that the sharp rise in China-Europe ticket prices helped Dahang's oil price transmission better than expected. It is estimated that Dahang's fuel consumption in a single season is about 2 million tons, the 26Q2 domestic aviation fuel factory price increased 90% year on year, and the net profit of Air China/China Eastern Airlines/China Southern Airlines decreased by 43/33/4.4 billion yuan, respectively. The bank estimates that the transmission ratio of high oil prices is close to 60%, which is better than pessimistic expectations. 1) Domestic: The transmission of high oil prices in the Q2 off-season was difficult. Airlines generally raised prices and cut flights. Among them, the main lines benefited from the resilience of the commercial customer base, and the transmission of oil prices was better than that of the industry. 2) International: Middle Eastern hubs such as Dubai were shut down due to the war in the Middle East. The China-Europe route benefited from domestic transfers and the addition of international transfers, and ticket prices soared. It is estimated that the share of the three major airlines on the China-Europe route exceeds 50%. Q2 fully benefited and helped the overall transmission of oil prices.
Juneyao Airlines: The transmission rate of oil prices in the Q2 off-season was nearly 70%, significantly better than the industry and expectations
The company's performance report predicts that it will remain profitable in the first half of 2026, recording net profit of 14—210 million yuan, of which Q2 loss is estimated to be 23-30 million yuan, which is better than industry and market expectations. The company's fuel consumption in a single quarter is estimated to be about 300,000 tons. According to static estimates, fuel costs for 26Q2 increased by about 1.4 billion yuan year on year, while the company's Q2 profit decreased by only 400-500 million yuan year on year. The bank estimates that the oil price transmission ratio reached 70%, which is significantly better than the industry. On the one hand, the Q2 company cut fewer classes than the industry, and domestic ASK still increased slightly year-on-year. Due to the fact that the aircraft network was optimized and reduced in 2025, the company's high-quality aviation network was more resilient than the industry. On the other hand, the company has cultivated the European line for many years, and it is estimated that the European line accounts for more than 10% of the revenue. Q2 fully benefited from the boom in European routes, and the increase in ticket prices surpassed the industry. The impact of the company's flights reached its peak in 2025 and is expected to weaken quarterly in the second half of 2026. The gradual restoration of turnover efficiency in the future will help accelerate the development of the huge profit potential of the company's high-quality aviation network.
Summer travel: Family tours started late and are still resilient; oil prices fall to a new high, and business improvements can be expected
Demand for secondary air travel during the 2026 Spring Festival travel season was strong, and aviation demand (volume price) also maintained year-on-year growth under high fuel prices in Q2. The “15th Five-Year Plan” aviation demographic dividend continues, and it is expected that parent-child travel during the summer season will remain resilient. Due to late school vacations and local extreme weather, etc., the 2026 summer passenger flow started later than in previous years. Passenger flow started in the second week of July and corrected year-on-year. As the impact of the recent typhoon waned, ticket issuance and air passenger traffic grew rapidly. Domestic passenger flow reached a record high for the same period and increased year-on-year. The passenger occupancy rate rose 2% year on year to over 86%; it is estimated that domestic fuel ticket prices fell nearly 10% year on year, reflecting weak demand year over year. In July, the factory price of domestic aviation fuel fell by more than 20% compared to Q2. Considering recent repeated oil prices, domestic oil prices are expected to rise by more than 40% during the summer season. The bank expects summer airlines to maintain a high flight rate under the pressure of fuel prices, and that passenger occupancy rates will increase year-on-year. It is recommended to pay attention to subsequent ticket price improvements; improvements in airline operations can be expected.
The growth in aviation demand in the “15th Five-Year Plan” will drive long-term logical interpretation and focus on the timing of the bottom layout
Aviation is one of the few industries with strong logic. The “14th Five-Year Plan” ticket price has been marketed, and the “15th Five-Year Plan” has entered an era of low supply growth. There is huge room for growth in aviation demand, and boosting consumption and visa-free access to many countries will ensure that demand continues to grow steadily. Improved supply and demand will drive profits upward. It is recommended to seize expectations and long-term logical opportunities with low stock prices, select high-quality airline network passenger sources, and recommend Air China/China Eastern Airlines/Juneyao Airlines/Spring Airlines/China Southern Airlines.
Risk warning: Geographic oil prices, economy, industry policies, increased distribution and dilution, safety incidents, etc.