Gf Securities Co.,Ltd. has released a research report indicating that the reduction in fuel surcharges in August has further lowered travel costs for air passengers. The summer travel season has seen notable growth in overall passenger flow, with both seat occupancy rates and ticket prices showing year-on-year improvements. Given that late August remains a period for return trips and off-peak travel demand, the brokerage expects demand to stay resilient through the latter half of the summer season.
Demand growth during the 2026 summer travel season is outpacing flight capacity expansion, pushing average seat occupancy rates higher compared to the same period in 2025. On the pricing front, ticket prices have stabilized and begun to recover year-on-year, though there is still room for further improvement. Starting from August 5th, fuel surcharges for domestic routes under 800 kilometers (inclusive) and those exceeding 800 kilometers were lowered to 40 yuan and 70 yuan respectively, down 10 yuan and 30 yuan from previous levels, helping to reduce overall travel costs for passengers. With late August still seeing return travel and staggered vacation demand, the summer season's overall demand is expected to remain robust, and the trend of improving seat occupancy rates and ticket prices year-on-year is likely to continue.
On the supply side, the global aircraft supply chain remains persistently tight, with slower delivery schedules for new aircraft. The medium-to-long-term constraint on capacity supply in the industry remains unchanged. The key viewpoints from Gf Securities Co.,Ltd. are as follows:
In July, the industry's supply and demand turned from a year-on-year decline to growth, with demand growth outpacing supply. The improvement in seat occupancy rates year-on-year has widened, with domestic routes seeing a clear recovery and international routes experiencing accelerated supply and demand growth. According to the July operating data announcements from six listed airlines, total supply and total demand among these carriers grew 4.1% and 7.1% year-on-year respectively (with Air China figures consolidated to include Shandong Airlines), reaching approximately 122.0% and 126.4% of the same period in 2019. The seat occupancy rate rose 2.4 percentage points year-on-year to 86.1%, up 3.0 percentage points from the same period in 2019. By route type, domestic supply and demand grew 3.6% and 6.4% year-on-year respectively, reaching about 131.0% and 135.3% of 2019 levels, with seat occupancy up 2.3 percentage points to 87.2%, 2.8 percentage points higher than in 2019. International routes saw supply and demand grow 5.9% and 9.4% year-on-year respectively, with seat occupancy up 2.7 percentage points to 83.3%, 2.9 percentage points above 2019 levels. Regional routes saw supply and demand decline 3.1% and 0.8% year-on-year respectively, while seat occupancy improved 1.9 percentage points to 81.0%.
Airlines showed mixed performance in July, with the three major state-owned carriers posting faster demand growth, while private airlines maintained higher seat occupancy levels. Spring Airlines continued to lead in seat occupancy, while Air China and Juneyao Airlines showed the most significant improvements. Based on July operating data from the three major carriers, their combined supply and demand grew 4.4% and 7.8% year-on-year respectively, with seat occupancy up 2.6 percentage points to 85.7%. International routes among these carriers saw supply and demand grow 8.0% and 11.7% year-on-year respectively, lifting seat occupancy by 2.8 percentage points to 83.7%. The three private carriers—Spring Airlines, Juneyao Airlines, and Hainan Airlines—saw combined supply and demand grow 2.8% and 4.5% year-on-year respectively, with seat occupancy up 1.4 percentage points to 87.6%. Their international routes saw supply and demand decline 4.0% and 1.4% year-on-year respectively, though seat occupancy still improved 2.2 percentage points to 81.3%.
By individual airline, Spring Airlines raised its overall seat occupancy rate by 1.5 percentage points year-on-year to 93.3%, maintaining its leading position. Air China improved its overall seat occupancy rate by 4.9 percentage points to 85.0%, the largest gain among the six carriers, with international route seat occupancy jumping 6.1 percentage points to 83.9%. Risk warnings include uncertainty in tariff policies, economic downturn, safety incidents, and sharp oil price increases.
Comments