China Southern has obvious advantages in domestic market share, the largest aviation assets (number of seats) and the highest proportion of domestic routes, so it can fully enjoy the prosperity of domestic aviation industry. The domestic passenger demand market is expected to maintain a growth rate of 15- 18% in the next few years. According to the planning of the Civil Aviation Administration of China, the capacity growth is about 12%, and the growth rate will decrease year by year in the next few years. According to the analysis of supply and demand, we think that the domestic transportation market will show the trend of accelerated economic growth in the future. Airlines will gain stronger pricing power and higher passenger load factor. At the same time, the further improvement of the industry boom will also enable airlines to pass on the rise in oil prices to a certain extent.
The integration process of Xinjiang Airlines and Northern Airlines has been basically completed, and the level of cost control will continue to improve. The proportion of management expenses to main business income, and the proportion of operating expenses representing management level to main business income has been declining continuously. Compared with Air China, the proportion of the two expenses in the main business income has gradually decreased. At the same time, the accelerated appreciation of RMB has greatly reduced the external financing cost of China Southern Airlines, which has the largest dollar debt.
First, at present, China Southern Airlines has the largest domestic aircraft and route network and the largest passenger market share. By February 2006, China Southern Airlines had operated 309 passenger and cargo transport planes and more than 600 international and domestic routes. By restructuring Xinjiang Airlines and Northern Airlines, the company formed a triangular structure, expanded and improved the network structure, and consolidated the company's advantages in the domestic airline network.
Second, the company mainly buys aircraft in the form of US dollar financing lease or bank loan. There are a large number of US dollar transactions and US dollar liabilities in international aviation fuel procurement, aviation material leasing, procurement and overhaul, and the landing fees of international flights at foreign airports have enabled the company to gain some gains in the process of RMB appreciation.
Third, the rapid development of domestic tourism, China's entry into WTO, the 2008 Beijing Olympic Games, the strategy of developing the western region and the joint reorganization of domestic airlines will all promote the development of China's air transport industry, and the demand of China's domestic air transport market will maintain a strong growth momentum. According to the forecast of the General Administration of Civil Aviation, the average growth rate of the total turnover of civil aviation transportation in China will reach more than 10% in the next 20 years, and the development space of civil aviation transportation market is huge.
In the secondary market, due to the influence of high oil prices in the early stage, the price dropped sharply, but some investors did not consider government subsidies, which did not have much impact on the company. The accelerated appreciation of the renminbi, the stock is all latecomers, and the market outlook can be high! 20 yuan is under pressure, so it can be thrown high and sucked low at 13- 19.