WOOD Flash – Aegean Airlines: 1Q22 – small beat, fare levels exceed expectations, summer outlook encouraging

The start of the year is traditionally Aegean's seasonally weakest quarter, and the 1Q22 results continued to be affected by COVID-19 (the Omicron variant) and a resulting underutilisation of assets. That said, the numbers were a small beat vs. our expectations, driven mostly by better fare levels than we have been pricing in. The summer outlook seems encouraging, and the company plans to fly on a par with, or close to the pre-pandemic capacity; management reiterated that it expects the year to end in the black. That said, we need to wait to see whether the demand vs. the capacity during the crucial summer period will allow fares to increase to levels that would compensate the elevated fuel costs. According to Aegean, market capacity could be around 7-10% above the pre-pandemic levels in the summer months, which could keep the degree of price increases in check. So far, booking momentum remains strong, with the bookings during April above the pre-pandemic level. This is encouraging, in our view. At 47%, the fuel hedging level for 2022 remains unchanged vs. the 2021 year-end. At EUR 442m, the cash position remains robust.