To The Moon

The three major airlines collectively moved higher. As of writing, AIR CHINA (00753) rose 3.65% to HK$7.09; CHINA EAST AIR (00670) gained 3.35% to HK$5.25; CHINA SOUTH AIR (01055) increased 3.23% to HK$5.76. According to the China Civil Aviation News, the 3-day New Year holiday in 2026 has ignited substantial potential in the cultural and tourism consumption market, with air travel demand showing a significant growth trend. Data from TravelSky indicates that as of December 17th, domestic flight ticket bookings for the New Year holiday exceeded 1.76 million, a year-on-year increase of approximately 46%; international route ticket bookings surpassed 620,000, rising about 18% compared to the same period last year. Guotai Haitong Securities believes that peak season performance will be a crucial catalyst for the industry, and sustained positive fundamental feedback is expected to fuel market optimism regarding the long-term investment thesis for airlines. The pronounced holiday-stacking effect around the 2026 New Year break is anticipated to ensure robust air travel, with both passenger volume and fares expected to see significant year-on-year increases. Notably, on December 30th, the Renminbi continued its previous appreciating trend. After the offshore rate broke through the "7" level on December 25th, the onshore spot RMB exchange rate against the US Dollar strengthened and breached the "7" mark, marking the first time it surpassed this key psychological level since October 2024. Guosen Securities opines that China's airline ticket prices are expected to stabilize and rebound in 2026. Furthermore, both declining oil prices and the appreciation of the Renminbi are favorable for airlines to release earnings. Consequently, the firm believes that the aviation sector's performance possesses considerable elasticity potential following a future domestic economic recovery.