Travel demand remained robust during the Spring Festival holiday period, with airline ticket prices showing a significant increase. According to a research report, passenger traffic across all modes of transport during the first 21 days of the travel rush grew by 6.0% year-on-year based on the lunar calendar. Road travel increased by 6.0%, railway by 5.3%, and air travel by 6.0%.
For the first 21 days of the 2026 Spring Festival travel season, it is estimated that the average load factor for domestic airlines rose by approximately 1-2 percentage points compared to the same period last year. The estimated average base airfare, excluding fuel surcharges, increased by about 3-4% year-on-year. Considering that aviation fuel prices in February 2026 were down 13% year-on-year, the estimated net fare after deducting per-passenger fuel costs showed a year-on-year increase. This indicates that airline gross margins should have improved compared to the previous year.
Strong secondary travel during the holiday period pushed airline load factors to record highs, with the rate of fare increases expanding noticeably compared to the previous year. The upward trend in post-holiday fares is expected to continue positively.
Key observations from the travel period are as follows: The Spring Festival holiday saw an acceleration in passenger traffic growth, with air travel growth continuing to lead. During the pre-holiday period (February 2nd to 14th), overall passenger traffic increased by 3.1% year-on-year. The 2026 pre-holiday period had six working days, leading to a weaker concentrated travel effect than in previous years. The passenger peak occurred five days before New Year's Eve and persisted, with road and railway passenger growth rates gradually increasing.
During the holiday period itself (February 15th to 23rd), passenger traffic surged by 9.7% year-on-year. Growth rates across all three major transportation modes were significantly higher than during the pre-holiday period. The extended nine-day holiday facilitated continued strong demand for family visits and tourism, with substantial secondary travel occurring. Coastal and tourist destinations such as Guangdong, Hainan, Yunnan, and Guangxi were particularly popular.
For the post-holiday period (February 24th to March 13th), the concentrated return travel effect is also expected to be weaker than in previous years, with return passenger flows likely being more concentrated compared to the same period in 2025.
Regarding air passenger traffic, additional flights during the travel rush were relatively limited. The growth rate during the holiday period accelerated compared to the pre-holiday period. The average daily air passenger volume during the first 21 days was approximately 2.39 million, a 6.0% lunar calendar year-on-year increase, meeting official expectations. Authorities strictly controlled the addition of flights and airlines on trunk routes. Data indicates that the average number of daily operated passenger flights nationwide during the first 21 days increased by nearly 5% year-on-year, with domestic and international routes showing similar growth rates.
In terms of airfares, both load factors and ticket prices maintained an upward trend during the travel rush, with the rate of increase expanding during the holiday period. In the pre-holiday period, fare increases were limited as passenger peaks were influenced by additional railway services. During the holiday, robust secondary travel drove load factors to record highs and significantly widened the year-on-year fare increase. For the post-holiday period, strong advance booking trends are expected to sustain high load factors, benefiting last-minute revenue management. Given that post-holiday passenger traffic was more dispersed in 2025, leading to relatively lower fares, the year-on-year upward trend in post-holiday fares is anticipated to continue favorably.
Airlines are projected to see a significant year-on-year improvement in profitability during the 2026 peak travel season, with the industry expected to achieve profitability in the first quarter of 2026. The Chinese aviation industry is poised for a "super cycle." Market-based pricing has been implemented, and industry supply has entered an era of low growth. Sustained future demand growth is expected to drive continued positive supply-demand dynamics in 2026, initiating an upward cycle for fares and profitability. The sustainability of this high-growth phase may exceed market expectations.
The long-term industry narrative is expected to provide room for both earnings growth and valuation expansion. Continuous positive fundamental feedback and strong peak-season performance are likely to catalyze optimistic market expectations. The quality of airline networks will be a key determinant of the extent and sustainability of future profitability for traditional carriers. Increasing holdings in airline stocks is recommended. Suggested companies include Air China, Juneyao Air, China Eastern Airlines, China Southern Airlines, and Spring Airlines.
Risks to consider include economic fluctuations, policy changes, fuel price and exchange rate volatility, equity dilution from secondary offerings, and safety incidents.