Goldman Sachs – China Air Travel Recovery Tracker: Steady Traffic and Lower Fuel Surcharges Underpin Domestic Fare Recovery; Oil Remains the Key Driver of Airline Shares
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Key Views
Supply stays tight: the big three carriers' fleets grew only 0.4% YTD versus a 2.4% full-year target (2,772 aircraft vs. 2,827 year-end target). August domestic fuel surcharges were cut to RMB40/RMB70 (below/above 800km). However, higher oil assumptions on Hormuz Strait disruption risk mean surcharges cover only ~55% of the big three's added fuel costs (~80% for Spring Airlines), prompting Goldman to cut 2026 net profit forecasts and target prices. Oil remains the key share-price driver; Goldman keeps 2026 industry traffic growth at 2% (domestic 2%, international 4%).
Recommended Securities
- Air China (601111.SS/0753.HK): Buy; TPs RMB7.6 / HKD6.4
- China Eastern (600115.SS/0670.HK): Buy
- China Southern H (1055.HK): Buy, TP HKD4.6; A-shares (600029.SS) Neutral, TP RMB5.7
- Spring Airlines (601021.SS): Buy, TP RMB56.3