CITIC SEC released a research report stating that passenger volume for civil aviation, railways, and highways increased by 5.4%, 4.9%, and 5.4% year-on-year respectively during the first 20 days of the Spring Festival travel season. Attention is drawn to the synergistic effect of peak passenger flows occurring after the holidays, specifically around the sixth and sixteenth days of the lunar new year. Civil aviation passenger volume during the Spring Festival period is forecasted to grow by 5.5% to 6.0% compared to the previous year. The 2026 Spring Festival is viewed as the first key test for the aviation sector's upcycle, with post-holiday passenger flow synergy being a critical factor. The report reiterates the importance of "monitoring the inflection point in airline profitability," anticipating significant improvements in the income statements of major airlines by 2026. Positive demand factors are expected to persist over the next two months. The firm continues to recommend airlines with significant cyclical elasticity and those with higher earnings certainty.

Key viewpoints from CITIC SEC are as follows: Cumulative cross-regional passenger movement across all modes of transport grew by 5.2% year-on-year as of February 21st, which represents the first 20 days of the 2026 Spring Festival travel period spanning from February 2nd to March 13th. Analyzing by transport mode, civil aviation, railway, and highway passenger volumes increased by 5.4%, 4.9%, and 5.4% year-on-year respectively. Compared to the same period in the 2019 Spring Festival season, civil aviation and railway volumes were up 34% and 39%, indicating a stabilization in holiday travel patterns. Using civil aviation data as an example, the pre-holiday peak occurred on February 11th, with daily passenger volume rising 4.4% year-on-year to 2.459 million people. As of the first 20 days, the post-holiday peak was on the fifth day of the lunar new year, with daily volume increasing 7.4% year-on-year to 2.607 million people. The timing of the holiday has led to an overlap of post-holiday passenger streams, including family visits, business travel, and student travel. The firm projects Spring Festival civil aviation passenger volume will likely increase by 5.5% to 6.0% year-on-year.

Considering the holiday timing, the short gap between the post-holiday return to work and the Two Sessions meetings may compress available travel time, potentially leading to a surge in business travel demand. The expansion of the spring holiday in April is also an anticipated positive factor. With these positive demand drivers expected to continue, the report reaffirms the expectation of "significant improvement in the income statements of major airlines by 2026."

Characteristic One: Spring Festival air passenger growth exhibited a "slower start, stronger finish" pattern, with the stimulative effect of secondary holiday trips becoming prominent, leading to potential passenger flow synergy after the holiday. 1) Pre-holiday period: The 2026 Chinese New Year's Eve fell on February 16th, a relatively late date in the lunar calendar. This resulted in a staggered effect among family visitation, business, and student travel flows, leading to a cumulative pre-holiday air passenger growth of 4.4%. Excluding the approximately 7% growth seen on the Fridays during the two weeks before the holiday, growth rates were in the low single digits. 2) Holiday period: Factors such as the extended holiday, taking extra leave, warmer weather, and cultural tourism promotions in various regions contributed to an estimated acceleration in air passenger growth to around 8% year-on-year from the first to the seventh day of the lunar new year. The effect of secondary trips was notable, with cities like Shantou, Fuzhou, Chaozhou, and Taiyuan ranking high for specialized tourism under the "segmented holiday" trend. 3) Post-holiday work resumption period: Peak passenger flows are anticipated around the seventh and sixteenth days of the lunar new year. Influenced by the overlap of family visitation, business, and student travel streams, the firm predicts air passenger volume growth for the latter 17 days of the Spring Festival period will be around 6% year-on-year.

Characteristic Two: Negative factors affecting Japan routes appear to have bottomed out, with flight capacity likely shifting primarily to South Korea and Southeast Asia. The expansion of visa-free policies and sustained high demand for travel to China are expected to continue. The trend of "flying farther, flying internationally, flying to emerging markets" is anticipated to continue contributing positively to airline revenues in 2026. According to National Immigration Administration data, average daily inbound and outbound travelers during the holiday are expected to exceed 2.05 million, a 14.1% year-on-year increase. Data from VariFlight indicates that international passenger flights in the first 19 days of the 2026 Spring Festival period totaled 37,500, up 0.8% year-on-year, recovering to 92% of 2019 levels. By destination, Thailand led with 1,101 weekly flights, though its recovery rate compared to 2019 is only about 76%, likely impacted by recent safety concerns. The Japan market has undergone structural changes due to policy factors, currently ranking fifth and recovering to only about 57% of 2019 levels. The report suggests passenger traffic originally destined for Japan may be shifting to markets like Southeast Asia, South Korea, and Europe. Weekly flight volumes to South Korea, Europe, and Vietnam have reached or exceeded pre-pandemic levels, at 98%, 125%, and 145% of 2019 levels respectively.

Characteristic Three: Spring Festival airfares are expected to achieve a slight year-on-year increase. Attention is focused on marginal changes from the civil aviation sector's "anti-internal competition" efforts potentially translating high load factors into fare elasticity. According to CADAS data monitoring, the average full fare for domestic routes in the first 19 days of the travel period was 978 yuan, down 1% year-on-year. Breaking it down by phase: 1) Early travel period: Fares were slightly below the same period in 2025, averaging 947 yuan, down 1.3% year-on-year. 2) Pre-holiday peak: Fare declines were more pronounced, down 5.5% year-on-year. The fare peak before the holiday occurred on the same date in both 2025 and 2026, but the 2026 peak fare was 1,120 yuan, down 8% year-on-year. 3) Post-holiday period: Stimulated by secondary travel from the "segmented holiday" trend, fares turned positive year-on-year during the first four days of the lunar new year, averaging 979 yuan, an increase of 5.8%. The anticipated peak passenger flows around the seventh and sixteenth days of the lunar new year, driven by overlapping travel streams, are also expected to positively impact fares.

Risk warnings include: Economic growth falling short of expectations; Travel demand underperforming forecasts; Slower-than-expected recovery of international routes; Adverse impacts from fuel prices and exchange rates exceeding expectations.