Chinese Airlines: June 2026: Domestic Weakness Persisted; International Demand Remains Supportive

Research evidence excerpt

Chinese Airlines: June 2026: Domestic Weakness Persisted; International Demand Remains Supportive

Update

July 15, 2026 01:02 PM GMT

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

Equity Analyst

June 2026: Domestic Weakness Qianlei.Fan@morganstanley.comEvan Chen +852 2239-1875

Research Associate

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

Persisted; International Demand Tenny Song

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

Remains Supportive

Key Takeaways

Airlines under our coverage appeared less prudent in capacity deployment on

domestic routes in June vs. May, leading to YoY PLF drops except for Air China. Hong Kong/China Transportation &

Infrastructure

Domestic RPK remained weak for the Big 3, down 6-7% YoY in June, modestly

Asia Pacific

better than the 7-9% declines in May due to lower pricing, we think. Industry View In-Line

International RPK growth was +5-7% YoY for the Big 3, but still relatively weaker See also:

vs. 5M26 on softer outbound. YoY PLF improvement continued except for CSA. Chinese Airlines: Big Three 2Q26 Prelims:

Sizable Losses amid Jet Fuel Hikes (14 Jul 2026) SPA continued to gain share on domestic routes, but international RPK fell 4.8%

Chinese Airlines: Summer Peak: Early Signs of (vs. +15.5% in May) amid limited support from inbound and transit demand.

Recovery in Pax Demand Growth (12 Jul 2026)

2Q26 could mark a trough in terms of YoY margin contraction for Chinese

Companies mentioned and tickers:

airlines. Summer demand and jet fuel remain our major focus points going

Air China Limited (0753.HK, 601111.SS)

forward.

China Eastern Airlines (0670.HK, 600115.SS)

China Southern Airlines (1055.HK, 600029.SS)

Domestic – weakness persisted; SPA's outperformance intact: SPA recorded

Spring Airlines (601021.SS)