WOOD Flash - EMEA airlines: 6M22 traffic, valuations under pressure as recovery of profits remains elusive
In this note, we review the pace of the traffic recovery for the main European-listed airlines in the first half of CY22. Consultants Bain & Company estimate that, during summer 2022E, we could see the number of passengers on intra-European short-haul routes reaching around 80% of 2019 levels, up from 70-75% in 2Q22. Although the strength and pace of the demand recovery for air travel in Europe has surprised on the upside in recent months, European airlines stocks continue to trail the wider European equities by a significant margin. The MSCI European Airlines Index is 53% below the early-2020 levels, while the broader MSCI EU Equities Index is flat vs. the beginning of 2020, even after the recent market-wide sell-off. Profitability remains elusive for most airlines. As load factors are recovering to pre-pandemic levels only gradually, increasing fares to compensate for high fuel prices is challenging. Congestion at many European airports, and the resulting delays and cancellations triggering compensation, are exacerbating the pressure.Aegean Airlines is an airline carrier based in Greece. Co. is engaged in aviation transportation, providing services that concern the transportation of passengers and commodities in the sector of public aviation transportation inside and outside Greece, conducting scheduled and unscheduled flights. Co. provides full service, premium quality short and medium haul services. Co. maintains a network of 145 destinations, 111 international in 45 countries and 34 domestic destinations. Co. is a member of global airline network, the Star Alliance network.
Turk Hava Yollari is engaged in the airline industry with the airline flying to 103 destinations, throughout Turkey and internationally. As of the year end, Co. maintains 66 aircrafts with a total seat capacity of 10,672, and leases a A300-200 cargo aircraft. Co. has various services for their customers which include: various ways of checking in and on-line ticket sales.
Wizz Air Holding is a European airline. As of Mar 31 2017, Co. provided more than 500 routes from 28 bases, connecting 141 destinations across 42 countries. Co. has two reportable segments: the airline and the tour operator business units, marketed under the Wizz Air and Wizz Tours brand names, respectively. Wizz Air sells flight tickets and related services to external customers and, to an extent, to Wizz Tours. Wizz Tours sells travel packages to external customers covering the network of Wizz Air.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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