Equity Long-Short

Mo Aziz

Thematic (Sector/Industry)

<ul>
<li>In aggregate, traffic among the Big-3 Chinese airlines was up 67% YoY in February and +18% vs 2019. Incontestable proof that China has regained its air travel mojo. </li>
<li>Published March schedules show total implied capacity is 31% higher YoY and 9% higher than 2019 levels. This is driven by domestic travel, international remains depressed. </li>
<li>Driven by domestic travel, international remains depressed. POSITIVE for China Eastern and other North Asian carriers that provide the missing North America link. </li>
</ul>


In aggregate, traffic among the Big-3 Chinese airlines was up 67% YoY in February and +18% vs 2019. Incontestable proof that China has regained its air travel mojo. 
Published March schedules show total implied capacity is 31% higher YoY and 9% higher than 2019 levels. This is driven by domestic travel, international remains depressed. 
Driven by domestic travel, international remains depressed. POSITIVE for China Eastern and other North Asian carriers that provide the missing North America link. 


China BIG-3 Mainland Airlines Traffic 18% Higher than 2019!

<ul>
<li>Jet fuel price has declined in the past two months and is 20% lower than the September peak. Positive for airlines but we have yet to see any earnings upgrade   </li>
<li>All the Chines state carriers (Air China, China Eastern and China Southern) and Taiwan's EVA Airways are unhedged, benefiting the most from this lower fuel price trend </li>
<li>Worst off due to fuel hedge cover at higher than current market prices are Qantas Airways (75% hedged), Air New Zealand (54% hedged) and Japan Airlines (40% hedged)  </li>
</ul>


Jet fuel price has declined in the past two months and is 20% lower than the September peak. Positive for airlines but we have yet to see any earnings upgrade   
All the Chines state carriers (Air China, China Eastern and China Southern) and Taiwan's EVA Airways are unhedged, benefiting the most from this lower fuel price trend 
Worst off due to fuel hedge cover at higher than current market prices are Qantas Airways (75% hedged), Air New Zealand (54% hedged) and Japan Airlines (40% hedged)  


Lower Fuel Price, Which Asia Pacific Airline Benefits and Suffers the Most?

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Several US customs brokers have been suspended under new, tighter rules</li>
<li>The new rules could make 'de minimis' imports slightly more difficult</li>
<li>Whether it lists in London or NYC, additional rule changes could threaten SHEIN</li>
</ul>


Several US customs brokers have been suspended under new, tighter rules
The new rules could make 'de minimis' imports slightly more difficult
Whether it lists in London or NYC, additional rule changes could threaten SHEIN


SHEIN: Several US Customs Broker Suspensions Tied to Tighter 'de Minimis' Rules

<ul>
<li>August air activity largely matched July's improved pace of growth (versus weak Q2)</li>
<li>The improvement in domestic activity has been more dramatic than in outbound </li>
<li>Effectively, high fuel costs appear to be keeping travelers closer to home here in Q3</li>
</ul>


August air activity largely matched July's improved pace of growth (versus weak Q2)
The improvement in domestic activity has been more dramatic than in outbound 
Effectively, high fuel costs appear to be keeping travelers closer to home here in Q3


Monthly Chinese Tourism Tracker | August Traffic Resilient, Especially Domestic Air Activity

<ul>
<li>Airline &amp; airport air cargo data shows moderating demand, Asia &gt; N America</li>
<li>No signs of supply tightness in the system; in fact, reported yields are <em>falling</em>
</li>
<li>Most indicators show that demand is mediocre, space plentiful, pricing weak</li>
</ul>


Airline &amp; airport air cargo data shows moderating demand, Asia &gt; N America
No signs of supply tightness in the system; in fact, reported yields are falling

Most indicators show that demand is mediocre, space plentiful, pricing weak


Monthly Air Cargo Tracker | May-July Data Shows Soft Demand, Ample Capacity, Lower Yields

Taiwan

China Airlines Limited provides scheduled international air transportation for passengers and cargo freight throughout cities in Europe, America, Asia, and Australia.

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China Airlines (2610 TT)

China BIG-3 Mainland Airlines Traffic 18% Higher than 2019!

Chinese airlines see significant increase in traffic, with domestic travel driving growth while international remains depressed. China's air...

Mo Aziz

Lower Fuel Price, Which Asia Pacific Airline Benefits and Suffers the Most?

Jet fuel prices have been declining and this is good for airlines. The impact varies according to average flight length and fuel hedge exposure....

Mo Aziz

SHEIN: Several US Customs Broker Suspensions Tied to Tighter 'de Minimis' Rules

US Customs and Border Protection has tightened the rules under which SHEIN and Temu import cheap goods into the US. As a result, six US customs...

Tracking Traffic

Monthly Chinese Tourism Tracker | August Traffic Resilient, Especially Domestic Air Activity

August air traffic figures show a decent Y/Y recovery that mirrors what we saw in July, especially for domestic travel. We believe demand could...

Tracking Traffic

Monthly Air Cargo Tracker | May-July Data Shows Soft Demand, Ample Capacity, Lower Yields

A look at July yields, load factors, and tonnage growth in July suggests an Asian air cargo market that has plenty of supply to meet moderating...

Tracking Traffic

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China BIG-3 Mainland Airlines Traffic 18% Higher than 2019!

​Chinese airlines see significant increase in traffic, with domestic travel driving growth while international remains depressed. China's air...

Mo Aziz

Lower Fuel Price, Which Asia Pacific Airline Benefits and Suffers the Most?

​Jet fuel prices have been declining and this is good for airlines. The impact varies according to average flight length and fuel hedge exposure....

Mo Aziz

SHEIN: Several US Customs Broker Suspensions Tied to Tighter 'de Minimis' Rules

US Customs and Border Protection has tightened the rules under which SHEIN and Temu import cheap goods into the US. As a result, six US customs...

Tracking Traffic

Monthly Chinese Tourism Tracker | August Traffic Resilient, Especially Domestic Air Activity

August air traffic figures show a decent Y/Y recovery that mirrors what we saw in July, especially for domestic travel. We believe demand could...

Tracking Traffic

Monthly Air Cargo Tracker | May-July Data Shows Soft Demand, Ample Capacity, Lower Yields

A look at July yields, load factors, and tonnage growth in July suggests an Asian air cargo market that has plenty of supply to meet moderating...

Tracking Traffic

Chinese airlines see significant increase in traffic, with domestic travel driving growth while international remains depressed. China's air...

Jet fuel prices have been declining and this is good for airlines. The impact varies according to average flight length and fuel hedge exposure....