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Aegean Airlines | Holding Altitude Amid Turbulence

A turbulent 2025e – We have moderately lowered our 2025 revenue forecast to €1.84bn (up 3.8% yoy) and reduced our bottom-line estimate by c2% to €139mn (+7% yoy), while maintaining both our load factor (82.5%) and EBITDA forecast (€422mn, +4% yoy). These revisions capture the two-speed nature of 2025: robust H1 pricing and meaningful FX gains offset by Q3 softness and an anticipated Q4 pullback on a demanding comp base. At the same time, Aegean continues to push significant capacity growth into the seasonally weaker winter months, supported by resilient demand and discounts offered by AIA (its core hub) to stimulate off-peak traffic. On the other hand, the competitive landscape has intensified, and this is likely to put some pressure on prices, albeit manageable in our view.

… but with quite healthy 9M performance – In the 9M period Aegean delivered +8% EBITDA growth (€357m), on 4% higher revenues (€1.43bn), aided by a decline in unit fuel costs and slightly positive yield growth (c+0.7% yoy) which more than offset several headwinds (fleet grounding, Middle East tensions). Net profit was up by a higher 13% yoy at €148m, benefitting from FX gains in the net financials. At the same time, cash flow generation stayed robust, with net inflow of €73m (net debt down to €589m).

Mid-single EBIT growth post 2025 – Looking ahead, we refine our 2026–27 framework to incorporate potential delivery delays, demand trends and a clearer cost outlook. We shift part of capacity into 2027, as we assume some Airbus delivery slippage, while we assume mid-to-high single-digit passenger growth and we edge higher our LF to c83%. We maintain avg fares stable beyond 2025 and we continue to assume mild yield softness in 2026. We model c6% annual revenue growth for 2026–27, while we pencil in a c6.5% rise in operating costs, topped by >7% annual rise in D&A and high net financials. Against this backdrop, we reduce our EBIT forecast by c5% in the two years ahead, calculating mid-single digit EBIT growth post 2025, while we see net profit rise c3-4% CAGR in the medium term.

Solid dividend play (>6% yield), supported by strong B/S and high cash generation – Aegean maintains a robust financial position, with net debt/EBITDA 50%, consistent with historical precedent (60–90%), we estimate a DY in the 6–7% range.

Valuation – We roll forward our DCF to 2026e and recalibrate for the softer profitability profile associated with the rising fleet base. In addition, we lower our WACC to 9.6% in line with the decline in long-term bond yields. Our 12-month PT is set at €16/share (vs €15.6 prior) implying c10x 2026e P/E multiple. This reflects a premium vs. median peers, justified in our view by the premium DY on offer, alongside AEGN’s solid FCF generation capacity. Should earnings momentum accelerate, we see further re-rating potential.