Matters:
Each airline company disclosed the operation data in February 2022. In February, the overall smooth operation of civil aviation, the business volume of each airline company was basically stable month on month, and the passenger seating rate recovered. Compared with the three airlines before the epidemic, the operation, traffic volume and passenger occupancy rate still decreased significantly. The spring and Autumn period is close to that before the epidemic, and the auspicious period is between the spring and Autumn period and the three airlines.
Comments:
February 2022 operation data disclosed by all airlines
Each airline company disclosed the operation data in February 2022. On the whole, the civil aviation operation was stable in February, the business volume was relatively stable, and the passenger seat rate recovered from January. Compared with before the epidemic, the investment, traffic volume and passenger occupancy rate of the three major shipping lines still decreased significantly. The decline of Air China was more obvious due to the Winter Olympic Games and other reasons, while that of China Southern Airlines was relatively small Spring Airlines Co.Ltd(601021) operation and operation surpassed that before the epidemic, with a year-on-year increase of 34.7%. The traffic volume was close to that before the epidemic, and the passenger occupancy rate recovered to 76.2%, with a year-on-year increase of 3.0pct; Auspicious transportation and operation was close to that before the epidemic, with a year-on-year increase of 28.9%. The traffic volume still decreased by about 20% compared with that before the epidemic, and the passenger seat rate was 71.2%, with a year-on-year increase of 1.5pct.
In terms of China line, the operation and investment of China Southern Airlines and China Eastern Airlines have recovered to 90% before the epidemic, and the decline in business volume is still about 30%; Due to the impact of the Winter Olympics, Air China has strict epidemic prevention in Beijing, and the passenger flow is relatively low, which is slightly worse than that of China Eastern Airlines and China Southern Airlines. The passenger occupancy rate of the three major airlines was about 65%, with a slight increase year-on-year. During the spring and Autumn period, China’s line operation continued to be strong, surpassing nearly 80% in the same period before the epidemic, surpassing 40% in the traffic volume before the epidemic, and the passenger seat rate was 76.3%, an increase of 2.6pct year-on-year; Compared with that before the epidemic, the operation and investment of Jixiang China line increased by 16.9%, and the business volume was close to that before the epidemic, with a seating rate of 71.3%, an increase of 0.9pct year-on-year.
As the “five ones” policy has not been significantly loosened, the national door has not been fully opened yet, the international line operation and traffic volume of each shipping company is still at a low ebb, and the international line operation and traffic volume of each shipping company has not improved significantly compared with 2019.
China’s epidemic disposal strategy remains unchanged and its tactics continue to be optimized. When it is fully liberalized one day, the demand for civil aviation is expected to recover rapidly
Recently, the epidemic situation in China has been repeated, and some cities have pressed the pause button again, putting pressure on civil aviation passenger flow for the time being. At the policy level, the strategy adheres to dynamic zeroing. However, with the weakening of the virus’s own virulence, local experience in dealing with the epidemic has gradually accumulated, and the research and development of specific drugs has continued to advance. We believe that the response to the epidemic at the tactical level is expected to continue to be optimized, and the impact of the occasional epidemic on Residents’ travel is expected to continue to be reduced.
In the long term, we believe that the covid-19 epidemic will eventually end. Once the decision-makers weigh various factors and believe that the cost of further strict prevention is significantly greater than that of liberalization, all policies restricting residents’ travel will be removed quickly and the demand for civil aviation will recover rapidly.
Investment suggestion: we are optimistic about the overall reversal of supply and demand after the loosening of epidemic prevention policy. We recommend three major airlines, spring and autumn, and good luck
The high point of the last round of civil aviation cycle reached its peak in 2010. Since then, with the slight decrease of macroeconomic growth year by year, the theoretical demand of civil aviation has also decreased slightly, while the industrial supply maintains a growth rate of about 10% every year. Although the supply and demand of civil aviation is basically balanced and the passenger seat rate has increased slightly, the unilateral decline of ticket prices in recent ten years is enough to show that the real relationship between supply and demand of civil aviation is not ideal, The factors that can maintain the performance are mainly the sharp decline in oil prices since 2014 and the tightening and fare reform from the end of 2017. It is difficult for cyclical industries to spontaneously form industrial supply contraction. Although this round of epidemic has brought huge industrial losses for two consecutive years, on the other hand, it has forcibly suppressed the expansion impulse of industry participants. Perhaps it can be said that without this round of epidemic, there will be no large cycle of aviation stocks in a short time.
Under the epidemic, the growth rate of civil aviation transport aircraft has remained low for two consecutive years, and at the moment of the continuation of the epidemic prevention and control policy, there is still uncertainty in the performance of civil aviation operation in the short term, the growth of industry supply will remain low, and the continuous rise of theoretical demand and the reversal of behavior cycle have brought preconditions. Once the epidemic prevention policy is fully loosened in the future and the country is restarted to solve structural problems, the supply and demand will be reversed in an all-round way. The triple resonance of high seating rate, continuous fare reform and the release of backlog demand is expected to stimulate the sharp rise of ticket prices, and civil aviation will usher in a high boom range.
We do not deny that the short-term prosperity of civil aviation may still be disturbed by the epidemic, but the prosperity of the industry is highly expected after the epidemic subsides completely. We believe that the boom brought by the reversal of supply and demand is industrial, and large and small airlines will benefit fully. We recommend Air China Limited(601111) , China Southern Airlines Company Limited(600029) , China Eastern Airlines Corporation Limited(600115) , Spring Airlines Co.Ltd(601021) , Juneyao Airlines Co.Ltd(603885) .
Risk tips:
Macroeconomic downturn, sharp rise of oil price, sharp fluctuation of exchange rate and safety accidents
