GTHT has released a research report stating that China's aviation industry is entering a "super cycle," recommending strategic investment based on long-term aviation logic. Market-based pricing for airfares has been achieved during the 14th Five-Year Plan period, while aviation supply has entered an era of low growth. Sustained future demand growth is expected to drive continued improvement in supply-demand dynamics by 2026, initiating an upward trend in fares and profitability. The sustainability of this high-growth phase is anticipated to exceed market expectations, marking the arrival of a long-awaited "super cycle" for China's aviation industry. The report emphasizes that the unfolding of this long-term logic will provide room for both performance improvement and valuation expansion. Continuous positive fundamental feedback and strong peak-season performance are expected to catalyze optimistic market sentiment. The quality of airline networks will determine the extent and sustainability of future profit growth for traditional carriers. The report recommends increasing holdings in the aviation sector. Key views from GTHT are as follows:

Tracking the 2026 Spring Festival Travel Period: Passenger traffic growth accelerated during the holiday, with air travel growth leading the way. Halfway through the travel period, as of February 22 (the first 21 days), total passenger trips across all modes of transport increased by 6.0% year-on-year based on the lunar calendar. This breaks down as follows: road transport +6.0%, railway +5.3%, and aviation +6.0%. 1) Pre-holiday period (Feb 2 - Feb 14): Passenger trips grew 3.1% year-on-year. The 2026 Spring Festival holiday was preceded by six working days, resulting in a weaker "extended holiday" effect compared to previous years. The passenger peak occurred five days before New Year's Eve and persisted, with year-on-year growth rates for road and rail traffic gradually increasing. 2) Holiday period (Feb 15 - Feb 23): Passenger trips surged 9.7% year-on-year. Growth rates across all three major transport modes showed significant improvement compared to the pre-holiday period. The 2026 holiday was extended to nine days, further stimulating robust demand for family visits and tourism. Secondary travel during the holiday became substantial, with coastal and tourist cities such as Guangdong, Hainan, Yunnan, and Guangxi experiencing particularly high traffic. 3) Post-holiday period (Feb 24 - Mar 13): The "extended holiday" effect is also expected to be weaker than in previous years, leading to a more concentrated return travel period compared to 2025.

Air Passenger Traffic: Limited additional flights were added for the Spring Festival travel rush, with traffic growth during the holiday itself accelerating compared to the pre-holiday period. During the first 21 days of the 2026 travel period, average daily civil aviation passenger volume was approximately 2.39 million, representing a 6.0% year-on-year increase based on the lunar calendar, meeting regulatory expectations. The number of additional flights arranged for the 2026 travel period was relatively limited, with authorities strictly controlling the addition of flights and airlines on trunk routes. According to flight data, the average number of daily operated passenger flights nationwide in the first 21 days increased by nearly 5% year-on-year, with similar growth rates for domestic and international routes. 1) Pre-holiday: Passenger traffic grew 5.1% year-on-year. 2) Holiday period: Passenger traffic growth accelerated to 7.6% year-on-year. The extended holiday facilitated substantial secondary travel and growth in long-haul international trips. 3) Post-holiday: Return travel is expected to be relatively concentrated. The impact of domestic important meetings following the travel period is anticipated to be brief, with the recovery of business and official travel likely faster than in previous years.

Airfares: Load factors and airfares continued to rise during the travel period, with fare increases expanding during the holiday. For the first 21 days of the 2026 travel period, GTHT estimates that domestic load factors increased by approximately 1-2 percentage points year-on-year. It estimates that domestic base airfares (excluding fuel surcharges) rose by about 3-4% year-on-year. Considering that aviation fuel prices in February 2026 were down approximately 13% year-on-year, the estimated fuel-adjusted fare (total fare minus per-passenger fuel cost) increased year-on-year, implying an improvement in airline gross margins. 1) Pre-holiday: Fare increases were limited as the passenger peak was influenced by additional railway services. 2) Holiday period: Robust secondary travel pushed load factors to new highs, leading to a significant expansion in the year-on-year fare increase. 3) Post-holiday: Positive pre-sales trends are expected to sustain high load factors, benefiting last-minute revenue management. Given that dispersed return travel in the 2025 post-holiday period led to relatively lower fare levels, GTHT anticipates the year-on-year upward trend in post-holiday fares will continue to improve.

GTHT expects airline profitability during the 2026 Spring Festival peak season to show significant year-on-year improvement, with the industry likely achieving profitability in the first quarter of 2026. Risks include economic fluctuations, policy changes, fuel price and exchange rate volatility, equity dilution from additional share issuances, and safety incidents.