China Merchants Securities released a research report stating that in November 2025, civil aviation passenger turnover reached 109.9 billion passenger-kilometers, an increase of 18.2% compared to 2019 and a rise of 9.6% compared to 2024. The full fare for domestic routes in November increased by 3.5% year-on-year, while the base fare rose by 3.8% year-on-year. Regarding air cargo, the number of international and regional cargo flights for China totaled 15,977 sorties, up 12.4% month-on-month and 14% year-on-year. From a medium to long-term perspective, the sustained climb in industry profits will provide support for market value recovery. In the short term, benefiting from demand growth and stabilizing, rebounding fares in Q4, the off-season is expected to see a significant year-on-year reduction in losses, with 2025 potentially marking the first year major airlines return to profitability. The full year of 2026 is anticipated to be the first year major airlines demonstrate profit elasticity. The key views of China Merchants Securities are as follows:
Core data for air passenger transport: 1) Demand: In November 2025, civil aviation passenger turnover was 109.9 billion passenger-kilometers, up 18.2% compared to 2019 and up 9.6% compared to 2024. Specifically, passenger turnover for domestic routes (excluding regional) was 80.9 billion passenger-kilometers, an increase of 19.6% compared to 2019 and a rise of 6.3% compared to 2024. Passenger turnover for international and regional routes was 29.1 billion passenger-kilometers, growing 14.5% compared to 2019 and surging 19.9% compared to 2024. 2) Supply: In November 2025, available seat kilometers (ASK) for civil aviation reached 128.3 billion, up 12.4% compared to 2019 and up 6.4% compared to 2024. The passenger load factor for scheduled flights was 85.7%, an increase of 4.2 percentage points from 2019 and a rise of 2.5 percentage points from 2024. Average daily aircraft utilization reached 8.7 hours, down 5.4% from 2019 but up 3.6% from 2024. 3) Fares: The full fare for domestic routes in November increased by 3.5% year-on-year, while the base fare rose by 3.8% year-on-year. 4) Performance of listed airlines: In November, the year-on-year changes in Revenue Passenger Kilometers (RPK) for domestic routes of China Southern Airlines / Air China / China Eastern Airlines / Hainan Airlines / Spring Airlines / Juneyao Airlines were +7.4%/+7.4%/+5.1%/+4.5%/+17.9%/+0.8% respectively. The year-on-year changes in ASK for their domestic routes were +5.4%/+3.8%/+2.1%/+2.8%/+16.3%/-0.5% respectively. For international routes, the year-on-year RPK changes were +19%/+17.5%/+22.8%/+24.4%/+18.1%/+38.4% respectively, and the year-on-year ASK changes were +17.3%/+8.1%/+16.6%/+22.2%/+12.9%/+26.8% respectively.
Core data for air cargo transport: In November 2025, the number of international and regional cargo flights for China was 15,977 sorties, increasing 12.4% month-on-month and 14% year-on-year. The theoretical payload capacity for these flights was 11.0 billion tonnes, up 8.2% month-on-month and 12.2% year-on-year. The average TAC Shanghai outbound airfreight price index for November was 5,469 points, rising 1.5% month-on-month and 16.2% year-on-year.
Investment View: Increased New Year holiday duration and substantial year-on-year growth in industry volume and price warrant attention on Q1 Spring Festival travel season performance. 1) High-frequency volume and price indicators show significant year-on-year improvement. The New Year's Day holiday in 2025 fell on a Wednesday, lasting only one day, adversely affecting both leisure and business travel and creating a low base. Major indicators showed substantial year-on-year growth from this low base in 2026. Recent seven-day data shows civil aviation passenger traffic up 12.9% year-on-year, domestic passenger traffic up 13.7%, base fare up 7.9%, fuel-inclusive fare up 10.3%, passenger load factor up 7.6 percentage points, and international and regional passenger traffic up 7.4%. 2) Looking ahead, the trends of industry supply-demand recovery, improved fuel and exchange rate conditions, and profit rebound are clear. From a medium to long-term perspective, the sustained climb in industry profits will support market value recovery. Short-term, Q4 benefits from demand growth and stabilizing, rebounding fares; the off-season is expected to see a major year-on-year reduction in losses. 2025 is poised to be the first year major airlines turn profitable, while 2026 is anticipated to be the first year they release profit elasticity. The 2026 Spring Festival travel season, benefiting from demand growth and lower year-on-year jet fuel prices, is expected to achieve substantial profit growth. It is advised to monitor volume and price performance during the Spring Festival travel period. Recommended stocks: Air China, China Southern Airlines, Juneyao Airlines, Spring Airlines, China Express Airlines; suggested for attention: China Eastern Airlines.
Risk warnings: Macroeconomic downturn, significant depreciation of the Renminbi, sharp rise in oil prices, major natural disasters, etc.
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