国际旅行即将到来.docx

DOMESTIC REOVERY ON TRACKRoe 亨 aDomestic passenger traffic recovery has resumed after hiccup during the Chinese New Year (CNY) period. Recoveryof domestic air passenger traffic hit a road block in early 2021 amid a surge in new COVID-19 cases in certain regions inChina. This resulted in a relatively quiet 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 quitestrong and sustainable. Air passenger traffic increased over 200% yoy in March and April. As driven by domestic routes, thetrend 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 ison course 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%216.8%206%187% O 0o50%0%-50%-100%5%-12%12%16%2Q%°w/-42%340/0 20 /C ° ° O o -40%53% o °-69% o ©°7桀oO =85%£-3K-d<2 US。CM- 3QEGLeoeLo-Roe二oeoe6007。zooe。gooe。coooe。ooeoe三 63。60.637zooseS963。80,6370637See the last page for disclaimerPage # of 15Source: CAAC, Guotai Junan International.Source: CAAC, Guotai Junan InternationaLSigns of strength during the Labour Day holiday. During the five days of the Labour Day holiday (1-5 May), domestic civilaviation produced 8.66 million passengers, average daily volume was 0.1% higher than the same period in 2019, and was173.9% above the same period in 2020. Rather strong traffic volume has also been noticed in road and railway traffic, as wellas hotel bookings. 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 in2019 too. Similarly, tourism revenue increased significantly by 77.0% yoy (on comparable basis), but the level was slightlybelow the level in 2019. We expect that heavier discounts and incentives were provided this year during the Labour Dayholiday as a way to spur consumer spending and stimulate passenger travel. This is in line with the industry trend for civilaviation.Figure-3: Labour Day Holiday PassengersFigure-4: Labour Day Holiday Tourism RevenuePerson mnRMB bn300250200150137147100502019202026714012010080604020201720182021020172018201920202021Source: Ministry of Culture and Tourism, Guotai Junan International.Source: Ministry of Culture and Tourism, Guotai Junan InternationaLHod/oQaMajor airlines are adding capacity in domestic routes. Chinese airlines (both full-service and low-cost carriers) are addingcapacity in the domestic market. Extreme high growth in both passenger traffic and capacity was noted in the first four monthsof 2021 due to low base. Comparing with the same period in 2019, low-cost carriers such as Spring Airlines and JuneyaoAirlines have been much stronger, with Spring Airlines passenger traffic (measured in RPK) 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 morecomparable to the level in 2019 for the China big three carriers, only 5%-6% below. This aligns with previous recovery trackswith low-cost carriers to benefit the most in light of the fast rebound in domestic routes.Figure-5: Domestic RPK Recovery for Major Chinese Figure-6: Domestic ASK Recovery for Major ChineseAirlinesAirlines350%300%250%200%150%100%50%0%-50%-100%-150%CEACSAJuneyao Airlines ArSpring Airlines& fes&OCM>ONoe dosoe moe ae 工ozoe upp6L >ON6L da6二6二苗工250%200%150%100%50%0%-50%-100%CEAACCSASpring AirlinesJuneyao AirlinesLeuUSoe >ozoe d soe3ON Ab 乏oeESoe6L >ON6L ds6二6L Ae 工6 二 E2See the last page for disclaimerPage 5 of 15100.0%90.0%80.0%70.0%60.0%50.0%CEAACCSASpring AirlinesJuneyao Airlines666666666666000000a00000LLLL30.020.010.00.0(10.0)(20.0)(30.0)(40.0)(50.0)CEAACCSASpring AirlinesJuneyao Airlines40.0%6666OOOOOOR。LLLLCicjecjecicxje-3Ll5<2":) <WoZQLlS<2-3 <WoZQ->llS<LCesL。qLoe OOQoe >ozoe00oe d sSource: the Companies, Guotai Junan InternationaLSource: the Companies, Guotai Junan International.Source: the Companies, Guotai Junan International.Source: the Companies, Guotai J