Gf Securities Co.,Ltd. released a research report indicating that the Spring Festival holiday in February stimulated both supply and demand in the civil aviation sector, pushing passenger load factors to elevated levels. According to flight management data, the average domestic economy class airfare in February reached 987.1 yuan (including taxes), representing a 21.9% increase compared to 2025 and an 8.3% rise compared to 2019. Recent geopolitical tensions have led to a rapid increase in short-term oil prices, raising cost pressures; however, the expansion of visa-free policies and the recovery of flight routes continue unabated. Notably, European route prices have been impacted by disruptions in Middle Eastern hubs, with surging demand driving both volume and fares higher on China-Europe flights, partially offsetting the pressure from rising fuel costs. Key viewpoints from Gf Securities Co.,Ltd. are as follows:

The Spring Festival holiday in February catalyzed robust supply and demand in civil aviation, with passenger load factors climbing to high levels. Based on operational data announcements from six listed airlines, total supply and demand in February increased by 12.9% and 15.2% year-over-year, respectively, reaching approximately 125.2% and 127.3% of the same period in 2019. Passenger load factors rose by 1.7 percentage points year-over-year to 86.8%, marking a 1.4 percentage point improvement compared to 2019.

Breaking down by route type: Domestic route supply and demand grew by 11.4% and 12.4% year-over-year, respectively, reaching about 130.6% and 132.3% of 2019 levels. Passenger load factors on domestic routes increased by 0.7 percentage points year-over-year to 88.2%, up 1.1 percentage points from 2019. International route supply and demand expanded by 16.5% and 22.6% year-over-year, respectively, equivalent to 115.8% and 117.9% of 2019 figures. International route load factors rose by 4.2 percentage points year-over-year to 83.6%, a 1.5 percentage point increase from 2019. Regional route supply grew by 19.5% year-over-year, while demand surged by 28.8%; passenger load factors on regional routes improved by 5.9 percentage points year-over-year to 81.8%, up 0.8 percentage points from 2019.

Airlines demonstrated varied performance, with Spring Airlines and China Eastern Airlines leading in passenger load factors. Operational data from three major airlines in February showed supply and demand increasing by 13.7% and 15.8% year-over-year, respectively, continuing the recovery trend. Domestic route supply and demand for these carriers recovered to 134.5% and 137.4% of 2019 levels. China Eastern Airlines maintained a leading position, with February load factors on domestic, international, and regional routes changing by -0.1, 4.6, and 4.8 percentage points year-over-year to 87.8%, 84.1%, and 85.6%, respectively, improving by 2.3, 1.4, and 5.4 percentage points compared to 2019.

Data from privately-owned airlines showed that the combined supply and demand for Spring Airlines, Juneyao Airlines, and Hainan Airlines increased by 9.9% and 12.8% year-over-year, respectively. Domestic route supply and demand for these carriers grew by 11.3% and 12.6% year-over-year, while international route supply and demand expanded by 5.0% and 13.1%. Juneyao Airlines' total supply and demand recovered to 149.1% and 150.1% of 2019 levels, while Spring Airlines' figures reached 177.9% and 176.9%.

Airfares increased year-over-year, and the total scheduled flights for Spring Airlines' season contracted compared to the previous year, yet the long-term positive supply-demand dynamics in the industry remain intact. According to civil aviation authority data, the total planned flights for the 2026 winter-spring season decreased by 1.9% year-over-year, with domestic airlines' total schedules down 1.3% and foreign airlines' schedules declining by 8.0%. Despite recent geopolitical conflicts driving up short-term oil prices and increasing cost pressures, the trends of visa-free expansion and route recovery persist. The surge in demand on China-Europe routes has led to higher volumes and fares, mitigating some of the oil price pressures.

Considering the benefits on European routes and the realization of domestic operating profits, it is recommended to monitor Spring Airlines, Juneyao Airlines, AIR CHINA, Hainan Airlines Holdings, and China Express Airlines. Potential risks include uncertainties in tariff policies, economic downturns, safety incidents, and sharp increases in oil prices.