Passenger Traffic Returns to Growth Track, Asia-Pacific as Engine
After the post-pandemic retaliatory rebound, the global aviation industry is entering a new supply-demand adjustment phase this year. According to the International Air Transport Association, global passenger demand will gradually return to a long-term growth track of about 3.5% to 4.5% per year, with Asia-Pacific and the Middle East as the main growth engines. However, with recent heightened geopolitical tensions driving international oil prices higher, coupled with a brief cooling in demand on long-haul Europe-U.S. routes, the market is closely watching the operational resilience of domestic carriers. Local institutions point out that, supported by high load factors and strong cargo demand, the aviation duo still offers different investment values.
First-Three-Quarter Load Factors Above 80%, Fleet Renewal Accelerates
In the first three quarters of this year, the domestic aviation duo demonstrated resilient load performance. 長榮航 posted a cumulative load factor of 81.5% for the first three quarters, while 華航 delivered an even higher 83.0%, showing that outbound tourism and business demand remains strong. To optimize operating efficiency and meet future long-haul demand, both are actively introducing new-generation wide-body aircraft. 長榮航 is taking intensive delivery of Boeing 787 Dreamliners to gradually replace older fleets; 華航 continues to introduce 787 and A350 series aircraft, and is expected to fully retire its aging A330-300 fleet in 2028, laying a solid foundation for medium- to long-term capacity deployment.
Cargo Strong in Off-Season, AI and E-Commerce as Moat
In addition to steady passenger performance, air cargo also delivered strong results this year. Benefiting from explosive cross-border e-commerce growth, as well as transport demand for high-value servers, semiconductor equipment and advanced-packaging chips driven by the global AI wave, the Baltic Air Freight Index has continued to fluctuate at relatively high levels, showing a strong off-season performance. Institutions analyze that, as fuel surcharges on cargo are more flexible, coupled with strong rigid demand for high-value goods departing Asia, carriers are better able to pass through costs in the face of recent oil price increases, successfully changing the past fate of profits being wiped out whenever oil prices rose.
Oil Price Pressure Remains, Institutions Name 華航 as Buy on Dips
On the oil price variable of market concern, the U.S. Energy Information Administration recently raised its 2026 Brent crude average price forecast to $96 per barrel, but also expects the average price to fall back to $84 per barrel in 2027 as output increases, with medium- to long-term jet fuel cost pressure expected to ease. Taking short-term oil price volatility and valuation into account, local institutions adopt different strategies for the aviation duo, maintaining a trading-range view on 長榮航; as for 華航, given its significantly low relative valuation, they give an overweight rating, suggesting investors buy on dips during pullbacks. Investment still involves risks; decisions should be carefully evaluated at one's own risk.