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Apr 21 2021, 06:30 IST/BST
Ratings and price correct at time of issue
|Company||Rating||Date||Previous Rating||Date||Closing Price|
|Air France KLM||UNDERPERFORM||11/05/20||Neutral||20/01/20||503c|
|Wizz Air Holdings||UNDERPERFORM||21/04/21||Neutral||09/09/19||4877.0p|
We see an ‘inflection point’ coming. Despite the noise, we believe that Mediterranean countries will open in scale for peak/late summer. While the transatlantic could open by mid-May, traffic levels will be subdued, certainly eastbound. Corporate/emerging markets will be further behind. We prefer low-cost carriers (LCCs), given their nimbler route deployment, over network carriers. We favour Ryanair (‘Outperform’, price target €18, unchanged) and easyJet (‘Outperform’, price target up to £10.8) but downgrade Wizz to ‘Underperform’ on the basis of valuation. Among the networks, we still favour IAG (‘Neutral’), with both continental groups (Air France-KLM and Lufthansa) continuing remedial work on their capital structures.