Cathay Pacific Haitong: It is expected that the airline will continue to reduce losses sharply year on year in 25Q4, peak passenger traffic during the Spring Festival travel season, and ticket prices can be expected
The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that travel was strong during the 11th holiday season and ticket prices rose significantly year-on-year. Public demand was stable in November-December, passenger occupancy rates remained high, and ticket prices declined slightly in December due to the airline's increase in the operating base. Combined with the impressive performance of European routes, it is expected that airline Q4 will continue to reduce losses sharply year on year. Looking at the short-term outlook, the holiday competition effect is remarkable. The long holiday will guarantee strong air travel. It is expected that volume and price will rise significantly year over year; the holiday promotion effect before and after the Spring Festival holiday is weaker than in previous years. It is expected that commercial and commercial travel will remain active before the holiday season, compounded by the commencement of passenger traffic returning to their hometowns, and airline expectations are optimistic.
Cathay Pacific Haitong's main views are as follows:
Total volume in 2025: China's civil aviation supply and demand will continue to recover, which is expected to reverse losses in the industry
Demand continues to grow steadily: passenger traffic is estimated to increase 5-6% year over year in 2025, with domestic routes increasing 4% year over year, international routes increasing by more than 20% year on year; RPK increasing 8% year over year. The core problem is that the share of public and commercial demand is still lower than in 2019, and airlines continue to implement passenger occupancy priority strategies to guarantee increased passenger flow and passenger occupancy rates in exchange for price.
Supply has entered an era of low growth: it is estimated that in November 2025, the size of the seven A-share airline driver teams will increase by about 3.7% compared to the end of 2024; additional international investment will further increase turnover, and it is estimated that ASK in the industry will increase by 6% year on year. If North American air rights maintain the status quo, there is limited room for fleet turnover to continue to increase, and airspace time will still be the core bottleneck in the supply of main lines.
The passenger occupancy rate reached another record high: the passenger occupancy rate increased by 1.7 pct year on year, the highest in the global comparable market; ticket prices are still at an all-time low: domestic oil ticket prices are estimated to have declined 2-3% year on year, with a year-on-year increase since September benefiting from the recovery in commercial demand; international ticket prices declined year on year in the first half of the year, and rose sharply year on year due to high passenger occupancy rates in the second half of the year or from strong inbound demand. Profit: The industry is expected to continue to drastically reduce losses and turn losses into profits in 2025.
2025 quarterly: losses were drastically reduced in the off-season, and there was no profit elasticity during the peak season
First quarter: Passenger traffic reached a new high due to strong private demand during the Spring Festival travel season, but due to high base and fragmentation, domestic fuel ticket prices for the Spring Festival travel season fell by about 10% year on year, and airline Q1 profit improvement was limited; in the second quarter: in April-May, business travel was active and better than top-down concerns. Supply and demand recovered well, ensuring that all fuel cost reductions were retained as profits. Airlines' Q2 profits fell sharply year on year.
Third quarter: There was no overtime during the summer travel season and private demand was strong. Due to the phased impact of public business demand, the peak season failed to show profit elasticity. Public commercial demand resumed growth in September, driving the correction of ticket prices. The decline in oil prices in Q3 hedged the decline in ticket prices, and airline profits bucked the trend and increased slightly year on year, surpassing 2019 Q3 for three consecutive years, showing profit resilience and upward potential; fourth quarter: the 11th holiday season was strong and ticket prices rose significantly year on year. In November-December, public demand was stable, passenger occupancy rates remained high, and airline fares turned slightly negative in December due to the increase in the airline's dosage base. Combined with the impressive performance of European routes, it is expected that airline Q4 will continue to reduce losses sharply year on year.
Short-term outlook: Air travel is strong during the New Year's Day holiday, and ticket prices can be expected to peak during the Spring Festival travel season
Peak season performance will be an important catalyst for the industry, and continued positive fundamental feedback is expected to catalyze the market's optimistic expectations of aviation chief's logical interpretation. New Year's Day holiday: The holiday competition effect is remarkable before and after the 2026 New Year's Day holiday. The long holiday will guarantee a boom in air travel, and volume and price are expected to rise significantly year-on-year. Spring Festival travel season: The holiday competition effect around the 2026 Spring Festival holiday is weaker than in previous years. It is expected that commercial and commercial travel will remain active before the holiday season, compounded by the commencement of passenger traffic returning to their hometowns, and airline expectations are optimistic. It is expected that there will be a concentrated passenger flow before and after the holiday season, which will benefit airline revenue management, and the Spring Festival travel volume and price performance is worth looking forward to.
Medium- to long-term outlook: China's aviation industry will welcome a “super cycle”, and it is recommended to lay out a long-term logic for the off-season
The “14th Five-Year Plan” has achieved the marketization of fares, and supply in the aviation industry has entered an era of low growth. Steady growth in future demand and the restoration of the passenger structure will drive the beginning of 2026 to rise in ticket prices and profits, and it is sustainable. China's aviation industry will usher in a “supercycle” that has been anticipated for many years. The key hint is that long-term logical interpretation will provide dual space for performance valuation. The oil price exchange rate favors aviation, and focuses on counteracting internal affairs and boosting consumption. The quality of the airline network will determine the future profit upside and sustainability of traditional airlines, increasing the holdings of Air China (601111.SH), Juneyao Airlines (603885.SH), China Eastern Airlines (600115.SH), China Southern Airlines (), and Spring Airlines (Dubai). 600029.SH 601021.SH
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