Chinese Airlines: Summer Peak: Early Signs of Recovery in Pax Demand Growth

Research evidence excerpt

Chinese Airlines: Summer Peak: Early Signs of Recovery in Pax Demand Growth

Update

July 12, 2026 01:55 PM GMT

Morgan Stanley Asia Limited+MChinese Airlines | Asia Pacific Qianlei Fan, CFA

Equity Analyst

Summer Peak: Early Signs of Qianlei.Fan@morganstanley.comEvan Chen +852 2239-1875

Research Associate

Evan.Chen@morganstanley.com +852 2848-7317

Recovery in Pax Demand Tenny Song

Tenny.Song@morganstanley.com +852 3963-1737

Growth

Key Takeaways

Domestic air pax grew 5.6% YoY over July 7-10, vs. -1.6% in July 1-6, while average

PLF growth rose 3ppts, vs. +0.6ppt, per DAST. Hong Kong/China Transportation &

Infrastructure

CADAS sees industry pax throughput rising 5.2% YoY over July 13-19, further

Asia Pacific

supporting a more constructive near-term outlook. Industry View In-Line

We think early July demand weakness may be due in part to unfavorable weather See also:

and a relatively later start of the primary school summer holiday in some areas. Chinese Airlines: Reduced Optimism amid a Soft

Start to the Summer (6 Jul 2026) Looking ahead, we will focus on pax growth momentum sustainability and yield

performance on domestic routes.

Despite improved demand growth, near-term investment sentiment could also be

affected by the dynamics of Middle East tensions.

What's new: Following a soft start to the summer peak, domestic demand has

shown early signs of improvement.

Our take:

• Weak pax growth in early July may have been partly led by a later start of

primary school summer holidays, as well as unfavorable weather.

• Demand growth returning to mid-single digits YoY is encouraging, although

pricing performance remains under pressure.

• We think keys to watch remain durability of demand recovery - traffic and

PLF improvement could lead to better yield performance. The summer peak