国际旅行即将到来

1、DOMESTIC REOVERY ON TRACKDomestic passenger traffic recovery has resumed after hiccup during the Chinese New Year (CNY) period. Recovery of domestic air passenger traffic hit a road block in early 2021 amid a surge in new COVID-19 cases in certain regions in China. This resulted in a relatively quie

2、t CNY period as travel restrictions were reimposed to avoid a spike in number of cases. However, travel has been recovering as control of the crisis has once again been effective, and such trend has been quite strong and sustainable. Air passenger traffic increased over 200% yoy in March and April.

3、As driven by domestic routes, the trend is promising. In Apr. 2021, traffic significantly rebounded, the second highest traffic flow rate since the pandemic begun, and is already comparable with average monthly passenger traffic in 2019. Therefore, we believe that air passenger traffic is on course

4、to reach new heights with the upcoming summer holiday expected to produce stronger traffic.Figure-1: Air Passenger Traffic GrowthFigure-2: Domestic Air Passenger Traffic Volume250 %200 %150 %100 %50%-5%-12%-12%-16%-20%216.8%206%187%Person - mn60504030200%-50%Jan 20-100 % -85%-72%-42%-34%-25%-53%-69%

5、-40%10Jul 202019-012019-032019-052019-072019-092019-112020-012020-032020-052020-072020-092020-112021-012021-030Apr 20Oct 20Jan 21Apr 21Source: CAAC, Guotai Junan International.Source: CAAC, Guotai Junan International.Signs of strength during the Labour Day holiday. During the five days of the Labour

6、 Day holiday (1-5 May), domestic civil aviation produced 8.66 million passengers, average daily volume was 0.1% higher than the same period in 2019, and was 173.9% above the same period in 2020. Rather strong traffic volume has also been noticed in road and railway traffic, as well as hotel bookings

7、. According to the Ministry of Culture and Tourism, Labour Day holiday passenger traffic (by all traffic means) vastly increased from last year, up by 103.2% yoy (on comparable basis) to 267 million passengers, and exceeded the level in 2019 too. Similarly, tourism revenue increased significantly by

8、 77.0% yoy (on comparable basis), but the level was slightly below the level in 2019. We expect that heavier discounts and incentives were provided this year during the Labour Day holiday as a way to spur consumer spending and stimulate passenger travel. This is in line with the industry trend for c

9、ivil aviation.Figure-3: Labour Day Holiday PassengersFigure-4: Labour Day Holiday Tourism Revenue137147115Person - mn 300250200150100500258267RMB bn 14012010080604020201 7201 8201 9202 0202 10201 7201 8201 9202 0202 127 May 2021Aviation Sector 航空行业Sector ReportSource: Ministry of Culture and Tourism

10、, Guotai Junan International.Source: Ministry of Culture and Tourism, Guotai Junan International.See the last page for disclaimerPage 2 of 15Major airlines are adding capacity in domestic routes. Chinese airlines (both full-service and low-cost carriers) are adding capacity in the domestic market. E

11、xtreme high growth in both passenger traffic and capacity was noted in the first four months of 2021 due to low base. Comparing with the same period in 2019, low-cost carriers such as Spring Airlines and Juneyao Airlines have been much stronger, with Spring Airlines passenger traffic (measured in RP

12、K) 36% above the level in 2019, where Juneyao Airlines was just 1% below its 2019 level. In contrast, the China big three carriers were about 17% to 21% below the level in 2019. A similar pattern has been seen in capacity growth (measured in ASK), but capacity is much more comparable to the level in

13、 2019 for the China big three carriers, only 5%-6% below. This aligns with previous recovery tracks with low-cost carriers to benefit the most in light of the fast rebound in domestic routes.Figure-5: Domestic RPK Recovery for Major Chinese AirlinesCEA AC350 % CSASpr ing Airline sFigure-6: Domestic

14、ASK Recovery for Major Chinese Airlines CEA AC250 % CSASpr ing Airline s300 %250 %200 %150 %100 %50%0%-50%-100 %Jan 19Mar 19May 19Jul 19Sep 19Nov 19Jan 20Mar 20May 20Jul 20Sep 20Nov 20Jan 21Mar 21-150 %Juneyao Airlin es200 %150 %100 %50%0%-50%Jan 19Jul 19Jan 20Jul 20Jan 21-100 %Juneyao Airlin esMar

15、19May 19Sep 19Nov 19Mar 20May 20Sep 20Nov 20Mar 21Source: the Companies, Guotai Junan International.Source: the Companies, Guotai Junan International.PLF not fully recovered. PFL also showed a recovery trend post CNY. Domestic PLF for the big three carrier are still below 80%, which in 2019 the PLF

16、should have been above 80%. Similarly, low-cost carriers also havent returned to pre-pandemic levels. However, the improvement trend is strong and we expect PLF for both full-service and low-cost carriers to return to pre-pandemic levels within this year. With PLF still below pre-pandemic levels, we

17、 believe that most carriers are fundamentally still under pressure, especially for full-service carriers as they normally have a higher breakeven load factor. As we expect the full year of 2021 to be still below pre-pandemic levels, we do not expect full-service carriers to return to profit in 2021,

18、 but should expect improvement in bottom line both on YoY and QoQ basis.Figure-7: Domestic PLF for Major Chinese AirlinesFigure-8: Changes in Domestic PLF for Major ChineseAirlines CEA AC100 .0% CSASpr ing Airline sJuneyao Airlin es90.0%80.0%70.0%60.0%50.0%Jan 19Feb 19Mar 19Apr 19May 19Jun 19Jul 19A

19、ug 19Sep 19Oct 19Nov 19Dec 19Jan 20Feb 20Mar 20Apr 20May 20Jun 20Jul 20Aug 20Sep 20Oct 20Nov 20Dec 20Jan 21Feb 21Mar 21Apr 2140.0%30.020.010.00.0(10.0)(20.0)(30.0)(40.0)Sep 19Oct 19Nov 19Dec 19Jan 20Feb 20Mar 20Apr 20May 20Jun 20Jul 20Aug 20Sep 20Oct 20Nov 20Dec 20Jan 21Feb 21Mar 21Apr 21(50.0)CEAAC

20、CSASpr ing Airline sJuneyao Airlin es27 May 2021Aviation Sector 航空行业Sector ReportSource: the Companies, Guotai Junan International.Source: the Companies, Guotai Junan International.See the last page for disclaimerPage 3 of 15Ticket price is also picking up. Ticket price has also shown an improving t

21、rend, with prices during the Labour Day holiday having been much stronger than expected, with many popular flight destinations being sold out. We believe that it was caused by pent-up demand to travel as many travelers were unable to travel during the CNY period. Also, with travelling abroad still n

22、ot practical at the moment, domestic tourism will continue to be a focus in the short-to-medium term. Even during the non-holiday season, ticket prices have seen noticeable increase. We compare prices on 25 May 2021 and 29 Oct. 2020 on a Beijing-Shanghai route, and noted noticeable price increase be

23、tween 20%-38% for the big three carriers (see notes in Figure-9 for our criteria). We recognize that this does not mean ticket price or passenger yield would increase in this range as there are several limitations in the comparison. 1) The ultimate discount price is no longer available for Air China

24、 (AC) morning flight; 2) price from Beijing Capital Airport will be more expensive than Daxing Airport; 3) it is possible that some customers will purchase All-you-can-fly type packages. The current lowest price range of the big 3 carriers is between RMB610 and RMB870, which is still below the guida

25、nce price of RMB1,490, but we believe prices will continue to recover.Figure-9: Ticket Prices of the Big Three Airlines, Beijing to ShanghaiRMB29-O ct-2025-May-21Price increase (%)1,000900800700600500400300200100038%28%20%ACCEACSA40%35%30%25%20%15%10%5%0%Source: the Companies, Guotai Junan Internati

26、onal.Note: Source from the Companies website. Obtained ticket price of Beijing (Capital Airport for AC and China Eastern Airlines (CEA) or Daixing for China Southern Airlines (CSA) to Shanghai (Hongqiao) for flights on the 25thMay 2021 and 29th October 2020. Both dates are weekdays (exclude Monday).

27、EXPECT RESUMPTION IN INTERNATIONAL TRAVELGlobal COVID-19 cases declining. Although the situation in India is still bad with over 200,000 new cases per day, global COVID-19 case daily infections is dropping with India gradually improving since May 2021. The landscape has changed significantly since v

28、accination program rollouts in key regions around the world. The US, though still tops the infection case accumulatively, has seen significant improvement, thanks to the high vaccination rate (See Figure-14 for vaccine coverage of major countries). The current 7-day moving average ofdailynew cases (

29、27,789) dropped 89.0% since the Jan. 2021 peak. Another region that has benefitted from vaccinations is Europe. Cases in key regions such as the UK, France and Germany are all dropping and stabilizing. Turing to Asia, divergence in infection cases is noticeable. Without high vaccination rate, contro

30、l of the pandemic is mainly reliant on social distancing. Number of cases in Japan, Malaysia and Thailand have been picking up.Figure-10: Daily COVID-19 Cases in the United StatesFigure-11: Daily COVID-19 Cases in the UK and France350 ,00 0300 ,00 0250 ,00 0200 ,00 0150 ,00 0100 ,00050,000Feb 20Mar

31、20Apr 20May 20Jun 20Jul 20Aug 20Sep 20Oct 20Nov 20Dec 20Jan 21Feb 21Mar 21Apr 21May 210140 ,00 0120 ,00 0100 ,00 080,00060,00040,00020,000Feb 20Mar 20Apr 20May 20Jun 20Jul 20Aug 20Sep 20Oct 20Nov 20Dec 20Jan 21Feb 21Mar 21Apr 21May 210UKFrance27 May 2021Aviation Sector 航空行业Sector ReportSource: Bloom

32、berg, Guotai Junan International.Source: Bloomberg, Guotai Junan International.See the last page for disclaimerPage 4 of 15Figure-12: Daily COVID-19 Cases in Japan and South KoreaFigure-13: Daily COVID-19 Cases in Singapore, Malaysia and Thailand9,0008,0007,0006,0005,0004,0003,0002,0001,000Feb 20Mar

33、 20Apr 20May 20Jun 20Jul 20Aug 20Sep 20Oct 20Nov 20Dec 20Jan 21Feb 21Mar 21Apr 21May 210JapanSou th Kor ea12,00010,0008,0006,0004,0002,000Feb 20Mar 20Apr 20May 20Jun 20Jul 20Aug 20Sep 20Oct 20Nov 20Dec 20Jan 21Feb 21Mar 21Apr 21May 210Sing aporeMalaysiaThailan dSource: Bloomberg, Guotai Junan Intern

34、ational.Source: Bloomberg, Guotai Junan International.COVID-19 vaccines have been effective in bending the curve, but distribution is not even. We believe that the rollout of vaccination has been very helpful in controlling the virus as seen in the US and UK. Both the US and UK have some of the high

35、est vaccination rates and improvement in condition has been significant, with both countries having about 45% vaccine coverage according to Bloomberg Vaccine Tracker. We noted that developed countries have higher vaccine coverage, with the US, UK, Germany, Italy, Spain, France and Canada all have ab

36、ove 25% vaccine coverage (See Figure-14 for Vaccine Coverage of Major Countries). However, vaccination distribution shows inequality with many countries where supply cannot meet demand. In general, high vaccine coverage is concentrated in more economically developed countries, as this allows a quick

37、er reboot of economies. As noted in Bloomberg Vaccine Tracker, countries and regions with the highest incomes are getting vaccinated more than 30 times faster than those with the lowest. We should expect these higher income countries to be able to open their borders much faster and resume internatio

38、nal travel.Figure-14: Vaccine CoverageFigure-15: Months Needed to Reach 75% with Two Doses of Vaccinepore ralia pa in ailan d oreapan hina taly nce a nyUKUSA29.9%7.1%25.8%2.1%5.4%3.2%17.8%25.4%25.8%26.7%45.4%44.5%Sing a AustSThSouth KJa C IFraGer m0%10%20%30%40%50%Sing apore2184303412444324Australia

39、 Spa in Thailan dSou th Kor eaJapan China ItalyFrance Ger ma nyUK USA01020304027 May 2021Aviation Sector 航空行业Sector ReportSource: Bloomberg, Guotai Junan International.Source: Bloomberg, Guotai Junan International.Vaccine will help to resume international travel in the short term. With vaccination p

40、rogram progressing well in regions such as America and Europe, certain countries are relaxing entry rules and giving preferential treatment towards fully vaccinated travelers such that quarantine requirements may not be required. In the US, fully vaccinated travelers do no need to self-quarantine. T

41、his is the same for many European countries, as travel within EU regions and the Schengen Area can now be done freely within the regions, and even so for travelers that are fully vaccinated. Non-essential trips are now open to more countries outside EU that have low numbers of COVID-19 infection cas

42、es such as Israel, Australia, New Zealand, etc.; China is also in the recommended list, but is subject to confirmation of reciprocity. In early May 2021, the EU recommended that member states to ease border restrictions to travelers who have been fully vaccinated. It is expected that both Sinovac an

43、d Sinopharm will be viewed as approved vaccines. In contrast, many Asian countries are still hold strict quarantine rules, even for fully vaccinated travelers. We believe that this is due to relatively low vaccine coverage rate in Asia in general. We believe that the gradual opening up of internatio

44、nal borders is being welcomed by many countries and a surge in pent-up demand to travel is expected. According to Sykscanner, there is a growing sense of optimism to travel around the world, especially towards regions where restriction measures have been lifted. Since the US and Europe area are more

45、 eager to take tourists, we expect that long-haul flights will return quicker in China than other short-term destinations like Japan, Malaysia and Thailand.See the last page for disclaimerPage 5 of 15Table-1: Summary of Travel Policy for Key RegionsPreferential treatment to citizen from designated c

46、ountries that are fully vaccinatedCountry(s)/ regions(s) allow to entryGeneral testing / quarantine rulesCountry/RegionTest needed within 3 days before and after travel, or Subject to quarantine rules, all nations are allow to enter USproof of recovery within the last 90 days. Stay home the US excep

47、t for China, Iran, European Schengen Area,Yesand self-quarantine for a full 7-10 days after travel.The UK, Republic of Ireland, Brazil, South Africa and IndiaPortugal (including the Azores and Madeira), Singapore, South Georgia and South Sandwich Islands, St Helena, Ascension and Tristan da Cunha.UK

48、 unless for citizen.Nolenient and red list are basically restricted to enter the Gibraltar, Iceland, Israel and Jerusalem, New Zealand,Brunei, Falkland Islands, Faroe Islands,and red) the country is in, with green list is the most Australia,UKCountry in green list do not need to adhere to quarantine

49、 Requirements will depend on which list (green, amber rules unless the testing results is positive. This includesGermanyPersons from risk areas or by air must undergo All nations with fully vaccinated or recovered from the mandatory testing or provide proof of immunity, and COVID-19; no testing and

50、quarantine needed, exceptYescomply with quarantine regulations.countries with a high risk of COVID-19YesArrivals are permitted from most of Europe, UK andIsrael. These countries are not required to quarantine Travellers from the European and Schengen Area with a negative COVID-19 test results. Other

51、 than countries, as well as those from the United Kingdom and these countries, travellers must self-isolate for 14 days Israel, will be permitted to visit Italy, quarantine-free, from on arrival at a place of their choice. Region from high 16th May 2021, if they have been fully vaccinated or provide

52、 risk area (eg. India) are not allow to enter unless for negative COVID-19 result.Italian resident.ItalySwedenPermit Israel to enter Sweden, quarantine-free, from 16Foreign nationals need to present a negativethand self-quarantine for 7 days.COVID-19 test result in order to travel into Sweden, May 2

53、021, if they have been vaccinated against the virus.Yesisolation.certificate.YesMust have proof of a negative COVID-19 test result Non-essential travels from the countries of the EU, from three days before departure. If passengers are coming Schengen Associated countries (Liechtenstein, Norway, from

54、 high risk area (incidence rate of 500 cases or Iceland, and Switzerland) and from the UK are permitted. more per 100,000 inhabitants), only essential trips are Travel to Azores and Madeira Islands can be free from allowed, and must undergo 14 days prophylactic quarantine regulation upon presentatio

55、n of vaccinationPortugalThe NetherlandsNoIn general, must quarantine for 10 days immediately Travellers from safe countries do not need to show a after returning or traveling to the Netherlands. negative test result and also not required to self-quarantine Traveller from high risk area must show neg

56、ative test when arrive in the Netherlands. Others would need toresult for COVID-19.follow general rules.recovery from COVID-19.the Russian Federation). Quarantine will not be required.YesIsolation or quarantine for visitors from abroad is no Flight restrictions from EU countries are lifted, as well

57、as longer required for traveller departed from low risk from a number of other countries (USA, UK, UAE, Serbia, countries unless tested positive upon arrival. Must Israel, Australia, New Zealand, South Korea, Thailand, have proof of a negative COVID-19 test result three Rwanda, Singapore, North Mace

58、donia, Canada, Belarus, days before departure, or proof of vaccination or Bahrein, Qatar, China, Kuwait, Ukraine, Saudi Arabia andGreeceJapanBeside those countries or regions restricted to enterJapan, both citizens of Japan and foreign nationals will Subject to quarantine rules, all nations are allo

59、w to enterdays prior departing and to undergo 14-day quarantineneed to submit a certificate of negative test result 3 Japan unless the 159 countries/regions in the restricted list.Noperiod upon arrival.their arrival in Korea.vaccinated residents starting 5th May 2021.YesAll travellers (including ret

60、urning Korean nationals) are The South Korean government has announced a new South Korearequired to quarantine themselves for 14 days upon exemption to the mandatory two-week quarantine for fullyThailandAll travellers must quarantine for 14 daysHolders of US, Canada, UK and Australia passports are a