Investors in British Airways parent International Consolidated Airlines Group SA (LSE:IAG) will be waiting for quarterly results, though data analysis by UBS points to supportive ticket prices.
The Swiss bank, in a research note, highlighted that economy airfares for the fourth quarter 2022 and first quarter 2023 periods are “buoyant” whilst premium fares for fourth quarter 2022 have shown improvement.
UBS added that based on price data it believes the pricing environment has continued to improve and there’s some evidence that the booking window (the time between booking and the journey) starting to lengthen, which would be a bullish signal for the sector as it gives greater visibility and denotes greater consumer confidence and longer-term travel planning.
In the European fare tracker report, UBS said recent observations suggest fourth quarter economy fares are up 31% and premium fares are up c26% year-on-year, whilst for the first quarter of 2023 they were 27% and 30% respectively.
For IAG, the bank reckons economy fare were up around 25% in the fourth and 19% for the first quarter, whilst premium fares are similarly estimated to be up 19% for both quarters.
“The next catalyst will be the 4Q22 results season but share price performance in the short term will likely be impacted by investor sentiment to risk in the new year,” UBS analyst Jarrod Castle said in the note.
The UBS research is based data harvesting, taking “high frequency price observations within the booking window to capture fare pricing trends across different airlines,” it explained, adding that they are gross prices, including fees, and are harvested on a daily.
It also picked up the price trends for Air France-KLM (OTC:AFLYY), Lufthansa, easyJet, Ryanair, Wizz Air, Jet2.