Guotai Haitong Securities has released a research report indicating that the further extension of the 2026 Spring Festival holiday will ensure the continued strength of both family visit and tourism travel demand. The Spring Festival travel period is set to commence on February 2nd, with recent advance ticket sales showing positive trends. Bookings for northern ice and snow tours and southern winter sun escapes are particularly active, while tourist hotspots like Hainan and Yunnan are experiencing high popularity. Considering that the nationwide railway schedule adjustment on January 26th added relatively limited capacity, and the overall number of additional flights for the Spring Festival period is expected to be modest, high passenger load factors and market-based ticket pricing are anticipated to benefit airline revenue management, making their performance during this period highly promising. The unfolding long-term narrative is expected to provide dual upside for airline earnings and valuations, with continuous positive fundamental feedback and peak season performance set to catalyze optimistic market expectations. The main viewpoints from Guotai Haitong are as follows:

The extension of the Spring Festival holiday over the past two years, with a further extension in 2026, is set to ensure the continued vigor of both family visits and tourism. The 2024 Spring Festival holiday was adjusted to 8 days, one day longer than in 2023, with encouragement for taking time off from New Year's Eve. Starting from 2025, the statutory Spring Festival holiday will increase by one day, and the principle of holiday adjustment will be optimized, explicitly stipulating an 8-day holiday beginning on New Year's Eve; concurrently, the extended holiday effect around the 2025 Spring Festival period is expected to be significant. The holiday extensions in the past two years have effectively boosted both family visits and tourism, leading to record-breaking passenger volumes during the Spring Festival travel rush, with substantial secondary travel during the holiday period filling the traditional low season. According to the Ministry of Transport, the total cross-regional passenger traffic during the 40-day 2025 Spring Festival travel period (Jan 14-Feb 22) exceeded 9 billion person-trips, a 7% year-on-year increase, setting another historical record. Specifically, pre-holiday traffic (the first 14 days) was concentrated and overlapped due to the earlier timing of the festival; holiday-period traffic (8 days) benefited from the extended break, leading to robust secondary travel, though high base effects caused a year-on-year decline in ticket prices; post-holiday return traffic (the latter 18 days) was more dispersed and delayed.

The 2026 Spring Festival travel outlook: Official projections indicate strong demand, with passenger volumes across all transport modes expected to reach new highs. A recent national video conference on Spring Festival travel anticipated that cross-regional passenger traffic during the 2026 period will reach 9.5 billion person-trips, an increase of approximately 5.3% year-on-year, setting another historical record. Among these, both the overall volume and single-day peaks for railway and civil aviation passenger traffic are expected to surpass previous historical highs. 1) Road transport: Self-driving trips are projected to remain the dominant mode, accounting for around 80% of total travel. 2) Railway: China State Railway Group expects national railway passenger volume to reach 539 million trips, a 5.0% year-on-year increase, with seating capacity growing by 5.3% year-on-year. 3) Aviation: The Civil Aviation Administration of China forecasts that air passenger traffic could reach 95 million trips, a 5.3% year-on-year increase, with China Southern Airlines and China Eastern Airlines projecting average daily flight increases of 4.2% and 3.6% year-on-year, respectively.

Tracking the 2026 Spring Festival air travel: Passenger flow is gradually building, with volume and prices maintaining year-on-year growth. As the 2026 Spring Festival falls with six and five workdays before and after the holiday respectively, the extended holiday effect may be weaker than in 2025. Guotai Haitong anticipates: 1) Business and official travel will still occur in the week before the festival, overlapping with Spring Festival travel, creating a definite pre-holiday peak; 2) The further extension of the holiday period will sustain substantial secondary travel; 3) Post-holiday return traffic might be relatively concentrated, and the resumption of business and official travel after the Spring Festival is expected to be faster than in previous years. According to tracking data, as students begin their holidays and migrant workers start returning home, passenger flow has been gradually increasing over the past two weeks. For the lunar calendar comparable period from January 18th to 30th, 2026, estimated passenger traffic has grown by 10% year-on-year, with passenger load factors rising by 2-3 percentage points, and the average domestic ticket price including fuel surcharges maintaining an upward trend. With the official start of the Spring Festival travel period on February 2nd, recent advance ticket sales show positive trends, with strong bookings for northern ice and snow tours and southern winter sun escapes, and high popularity for tourist cities like Hainan and Yunnan. Considering the relatively limited capacity addition from the nationwide railway schedule adjustment on January 26th and the modest overall number of additional flights for the civil aviation Spring Festival period, high passenger load factors and market-based pricing are expected to benefit airline revenue management, making their performance highly anticipated.

China's aviation industry is poised for a "super cycle," suggesting a strategic focus on long-term aviation logic. With the achievement of market-based pricing during the "14th Five-Year Plan" period and the aviation industry entering an era of low supply growth, future demand increases and the recovery of passenger demographics are expected to drive an uptrend in ticket prices and profitability starting in 2026, with high prosperity likely to be sustainable. China's aviation sector is anticipated to enter a long-awaited "super cycle." It is emphasized that the unfolding long-term narrative provides dual upside for earnings and valuations, and continuous positive fundamental feedback coupled with strong peak season performance will catalyze optimistic market expectations. The quality of route networks will determine the future upside and sustainability of profitability for traditional airlines. The report recommends increasing holdings in Air China (601111.SH), Juneyao Airlines (603885.SH), China Eastern Airlines (600115.SH), China Southern Airlines (600029.SH), and Spring Airlines (601021.SH).

Risks include economic fluctuations, policy changes, oil price and exchange rate volatility, equity dilution from secondary offerings, and safety incidents.