The Zhitong Finance App learned that Guohai Securities released a research report saying that the aviation industry is a strong cycle and asset-heavy industry. Supply and demand determine changes on the revenue side. Factors in oil prices and exchange rates affect the cost side, and fluctuations in supply, demand, and costs together affect airline performance. Currently, pessimistic expectations have abated. Airline stock prices have been lowered to a relatively low level after the pandemic, while supply is expected to grow slowly and demand is expected to improve. Concerning the subsequent recovery in industry ticket prices and the increase in travel volume, industry profits may improve.
Guohai Securities's main views are as follows:
What are the current trends in the supply of air passenger and cargo? ——Supply may be limited for the next three years
On the supply side, in 2025, the fleet utilization rate basically returned to 2019 levels. Delivery of the new fleet was delayed, and the industry's capacity growth rate slowed down. In terms of utilization rate, the average utilization rate of the 2025 fleet was reduced to 0.05 hours compared to the same period in 2019, which is basically the same. In terms of fleet introduction, the planned net growth rate of the five airline driver fleets in 2026 is +2.7%. The cumulative net growth rate for the first half of the year is only 0.7%. The growth rate is still slow. The bank expects delivery of new aircraft to be delayed and lower than the planned growth rate, and future capacity introduction is expected to maintain a low growth rate. Judging from the delivery situation of Boeing and Airbus, although Airbus has returned to a normal delivery rhythm, Boeing's delivery capacity has not yet fully recovered, and passenger and freighter deliveries may be affected by delays.
Demand judgment for air cargo and passenger transportation? ——Freight demand is growing, passenger transportation is resilient
1) Air cargo demand: Total volume is growing steadily, and international flights are the core growth engine. In the first half of 2026, domestic/international freight and mail turnover was -0.3%/+16.5% year-on-year respectively. The growth rate of international flights far exceeds that of domestic flights, and the international market has become the core driving force for growth. Structurally, according to the International Aviation Association, in 2025, more than two-thirds of AI-related trade values will be borne by air cargo. In terms of quantity, AI-related goods account for only 7% of the total air cargo volume, but the value of goods accounts for 53.5% of the total value of air transport trade, showing the characteristics of “small cargo volume and high cargo value”. AI hardware transportation is expected to become an important driving force for future growth in air cargo demand.
2) Air passenger demand: Travel demand remains resilient and is expected to maintain steady growth in the future. Passenger volume and turnover in the first half of 2026 were +1.0%/+4.3% year-on-year respectively. Although travel demand declined from May to June, passenger traffic continued to increase steadily in the first half of the year. In terms of occupancy rate, the industry average occupancy rate in the first half of 2026 was 85.7%, +1.6 pct compared to the previous year. With the fall in the center of oil prices and the arrival of the peak summer travel season, civil aviation travel volume and passenger occupancy rates rebounded, and maintained a steady increase over the same period last year. Looking back at the past, since 2024, the year-on-year growth rate of monthly civil aviation passenger traffic is mostly higher than the zero monthly social network growth rate, and travel demand is resilient compared to overall consumer demand. Judging from the annual data, the year-on-year growth rate of total civil aviation turnover and annual GDP growth rate has basically remained 1.5 to 2 times, and the growth in civil aviation traffic continues to outperform the macroeconomic market. Looking ahead, demand for civil aviation travel is expected to remain resilient or maintain steady growth.
What level are oil sinks at? ——Pessimism has abated
Looking at the current moment, oil prices are rising and falling, pessimistic expectations have subsided, and sector profits are expected to improve. In terms of oil prices, since the beginning of the year, due to the geographical conflict in the Middle East, international oil prices have risen sharply, and fuel costs for airlines have risen sharply; compounded by short-term pressure on supply and demand, the stock prices of listed airlines have deeply adjusted. With the marginal easing of the geographical situation since mid-June, international crude oil prices have clearly fallen from the April and May highs, and the factory price of aviation kerosene has also been lowered at the same time, and the pressure on airline costs has eased. In terms of exchange rates, the RMB continues to appreciate, and airlines are expected to reap exchange gains. The bank believes that the current market's pessimism about the impact on oil prices has abated, and airline stock prices have returned to a relatively low level after the epidemic. Although high short-term oil prices clearly suppressed the airline's immediate performance, the medium- to long-term logic of improving supply and demand in the industry is still there; as the oil price center declines from the first half of the year and demand picks up during the peak season, industry profits are expected to improve, and the sector will repair or open up.
How is aviation investment allocated? ——Optimistic about the upward trend in freight traffic and pay attention to the profit elasticity of passenger transport
The aviation sector is currently in a window of decline in pessimism and marginal improvement. 1) Cargo side: We recommend China Eastern Airlines Logistics, a booming cargo airline. The industry is booming, and the company's ability to deliver on performance is strong. At the same time, the dividend ratio is expected to remain at a high level, with a certain dividend investment value. 2) Passenger transport side: The long-term logic of improving supply and demand is still there. Focus on low-level sector layout opportunities. Currently, pessimistic expectations have abated. Airline stock prices have been lowered to a relatively low level after the pandemic, while supply is expected to grow slowly and demand is expected to improve. Concerning the subsequent recovery in industry ticket prices and the increase in travel volume, industry profits may improve. It is recommended to focus on Air China, China Eastern Airlines, Spring Airlines, China Southern Airlines, Juneyao Airlines, etc.
Risk Alerts
Geopolitical risk, risk of macro-environmental fluctuations, risk of travel demand growth falling short of expectations, risk of industry supply exceeding expectations, risk of rising ticket prices falling short of expectations, increased risk of market competition, risk of high speed rail competition substitution, aviation carbon emissions/ESG policy risk, risk of sharp rise in oil prices, risk of sharp RMB depreciation, profit forecasting risk