China aviation domestic growth slowed in April, while international routes and low-cost carriers remained the bright spots

Overview

This report focuses on the April 2026 operating data of Chinese airlines. The key conclusion is that domestic passenger growth weakened on a month-on-month basis, with the domestic RPK growth of the three major airlines slowing to low single digits YoY, while international routes maintained double-digit growth and low-cost carrier Spring Airlines continued to stand out. The report covers companies such as Air China Limited, China Eastern Airlines, China Southern Airlines, and Spring Airlines.

Core views

First, domestic demand was clearly cooling, weighed by factors including fare inflation. Second, international routes remain a structural bright spot, with international RPK for the three major airlines still growing 11-14% YoY and some carriers seeing significant PLF improvement on international routes. Third, Spring Airlines outperformed peers on both domestic and international routes, showing that the low-cost airline model is more resilient in the current environment. Fourth, Air China continued to lead among the three major airlines, while China Southern Airlines lagged relatively.

Analysis framework

The report mainly compares operating indicators such as RPK, PLF, and RFTK on a YoY and MoM basis, evaluates changes in domestic passenger, international passenger, and cargo demand, and makes side-by-side comparisons between the three major airlines and Spring Airlines.

Methodology notes

• Aviation operating indicatorsYoY comparison of RPK/PLF/RFTK

  Measures airline passenger and cargo operating performance using revenue passenger kilometers, passenger load factor, and freight ton kilometers.

  RPK is used to observe passenger demand, PLF is used to observe seat utilization and supply-demand matching, and RFTK is used to observe cargo demand; the report uses April 2026 YoY data and comparisons with 1Q26 to judge growth momentum.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

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

  One of the three major airlines, company mentioned in the report

  Strengths

  Continues to lead the three major airlines in RPK growth and YoY PLF improvement; domestic PLF rose to 86.0%, and international PLF also improved meaningfully.

  Weaknesses

  Domestic RPK growth remains in the low single-digit range, affected by the slowdown in domestic demand across the industry.

  Comparison

  Performs stronger than China Eastern Airlines and China Southern Airlines.

  Risks

  Fare inflation suppressing demand, cost pressure, and a slowdown in international demand.

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

  One of the three major airlines, company mentioned in the report

  Strengths

  International PLF improved significantly YoY, and April international RFTK grew 19% YoY.

  Weaknesses

  Domestic RPK grew only 0.5% YoY, weaker than Air China and Spring Airlines.

  Comparison

  Domestic passenger growth is lower than Air China, stronger than China Southern Airlines, but significantly behind Spring Airlines.

  Risks

  Weak domestic demand, volatility in capacity utilization, and cost pressure.

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

  One of the three major airlines, company mentioned in the report

  Strengths

  International RPK still falls within the 11-14% YoY growth range for the three major airlines, and cargo RFTK grew 2.7% YoY.

  Weaknesses

  Domestic RPK fell 0.7% YoY, domestic PLF declined 0.9 percentage points YoY, and international PLF also edged down 0.3 percentage points.

  Comparison

  The report says it underperformed relatively among the three major airlines.

  Risks

  Insufficient load factor improvement, weaker domestic demand, and competition on international routes.

• Spring Airlines (601021.SS)

  Low-cost carrier, a key highlight in the report

  Strengths

  Domestic RPK grew 18.4% YoY, international RPK grew 17.8% YoY, and domestic PLF improved to 93.0%, significantly outperforming peers.

  Weaknesses

  Although growth is strong, domestic RPK growth slowed from about 22% in 1Q26.

  Comparison

  Clearly leads the three major airlines in domestic RPK growth and PLF level.

  Risks

  Changes in fare environment, cost pressure, and intensifying competition in the low-cost model.

Key data

• Domestic RPK of the three major airlines0-3% YoY growth in April 2026Below the 4-12% range in 1Q26; the report believes this was partly affected by fare inflation.
• International RPK of the three major airlines11-14% YoY growth in April 2026Eased from 17-18% in 1Q26, but still maintained healthy growth.
• Spring Airlines domestic RPK18.4% YoY growth in April 2026The strongest performance among peers; about 22% in 1Q26.
• Spring Airlines international RPK17.8% YoY growth in April 2026Above 9% in 1Q26, indicating acceleration on international routes.
• Spring Airlines domestic PLF93.0%Up 4.2 percentage points YoY.
• Air China domestic PLF86.0%Up 2.2 percentage points YoY, among the best performers in the three major airlines.
• International RFTKCEA +19%, CSA +2.7%, CA +4.2%YoY growth in April 2026, indicating a gradual improvement in cargo demand after the Lunar New Year holiday.

Impact & implications

In terms of investment implications, the cooling of domestic aviation demand may limit near-term growth elasticity for the three major airlines, but the recovery in international routes, improved load factors, and the increase in connecting and direct-route share provide support for the industry. Companies with stronger exposure to low-cost aviation and international routes appear relatively more attractive.

Risks

• Fare inflation may continue to suppress domestic aviation demand.
• International RPK growth has already slowed compared with 1Q26, and the pace of further recovery remains uncertain.
• Fuel, exchange rate, and other cost pressures may affect earnings elasticity.
• Morgan Stanley has investment banking business or potential business relationships with some covered companies, so investors should pay attention to conflicts of interest disclosed in the research report.

What to watch

• Whether domestic RPK re-accelerates in May and subsequent months.
• Whether international route PLF improvement can continue, especially for Spring Airlines, Air China, and China Eastern Airlines.
• Changes in China's international connecting traffic and direct-route share.
• Whether the post-holiday improvement trend in cargo RFTK continues.
• Fare levels, cost changes, and their transmission to demand and profitability.