Under the TSA caliber, the US civil aviation traffic volume will recover to 68% in 2021 and 83% in 21h2. Since March 21, the United States has gradually relaxed its China and international travel policies. In 2021, the full caliber passenger flow of the U.S. Department of transportation in Q1, Q2, Q3 and Q4 recovered to 46% / 70% / 82% / 85% in the same period of 19 years respectively. In the second half of the year, the overall air passenger volume of the United States remained at the level of 83% in 19 years, of which the passenger volume of Chinese routes was 85% in the same period of 19 years and that of international routes was 51% in the same period of 19 years. Considering that the proportion of international line passenger flow in the U.S. aviation industry does not exceed 15%, the priority recovery of China line is also a feature of the recovery of U.S. civil aviation.
During the epidemic, the size of the four major aircraft fleets in the United States decreased by 4.6%. Different from the fact that China Airlines only reduced the introduction of aircraft during the epidemic, during the epidemic period, American Airlines stopped large-scale or withdrew from the elderly models ahead of schedule, and the fleet size of the four major airlines decreased by 4.6%, of which the fleet size of American Airlines, Delta Airlines, United Airlines and Southwest Airlines respectively changed by – 0.92% / – 13% / – 2% / – 1.3% compared with the end of 2019. In 2021, American Airlines, Delta Airlines, United Airlines and Southwest Airlines achieved net profits of – 20 / 10 / – 20 / 300 million US dollars respectively. Delta Airlines and southwest airlines turned losses into profits, with a corresponding net interest rate of 1% / 6.3%. The main business of the US aviation industry did not turn losses, mainly because during the epidemic period, the US aviation industry received three rounds of federal PSP plan support, totaling 54 billion US dollars, and the pressure on labor costs was relieved.
Changes in the stock market value damaged by the epidemic in the United States: 80% of air cruise ships recovered, and the travel platform far exceeded that before the epidemic. From the perspective of market value, American Airlines, Delta Airlines, United Airlines and Southwest Airlines recovered to 86% / 74% / 68% / 95% of the market value at the end of 2019 respectively, carnival cruise ship / Caribbean cruise ship / Norwegian Cruise Ship recovered to 86% / 86% / 76% in 19 years respectively, and travel platforms binke and Uber recovered to 127% / 113% in 19 years respectively; From the perspective of unit market value, American Airlines, Delta Airlines, United Airlines and Southwest Airlines recovered to 89% / 85% / 69% / 97% of the market value at the end of 2019 respectively, carnival cruise ship / Caribbean cruise ship / Norwegian Cruise Ship recovered to 79% / 76% / 73% in 19 years respectively, and travel platforms binke and Uber recovered to 146% / 107% in 19 years respectively. From the perspective of market value / unit market value, the valuation level of US stock travel sector is basically in direct proportion to the recovery degree of air traffic.
Investment strategy: Fundamentals: even considering 737max go around, the growth rate of China’s aviation fleet in the next two years is expected to be only 4.5% and 3.8%. There is high uncertainty in the contraction of supply growth. When the international line is fully liberalized and the industry enters a tight balance between supply and demand in the future, the profit center of the aviation industry will usher in a deterministic rise, Excellent private airlines such as Spring Airlines Co.Ltd(601021) are expected to surpass the profit peak of 25 million per unit. Valuation: at present, the market value of the single aircraft of the three major airlines + spring and autumn auspicious is 102-133% of the base in 2019, reflecting the high degree of optimism of A-share investors about the profit potential and demand recovery of China’s aviation industry. The game attribute of the sector suppresses the excess income brought by the repair of fundamentals in the future. We believe that private airlines expanded against the trend during the epidemic period and are expected to convert the fleet size and time resources into business performance when the travel demand returns to normal. At the current time, we mainly recommend Spring Airlines Co.Ltd(601021) and Juneyao Airlines Co.Ltd(603885) , and are optimistic about the high performance elasticity of the three airlines in the recovery cycle.
Risk tip: the sharp decline of macroeconomic growth and the repeated epidemic in a large area have seriously affected the travel demand and the safe operation risk of the aviation industry.
