Fares are coming under pressure across the airline sector, suggests Deutsche Bank, echoing comments for the carriers themselves in their recent updates.
September 60-day out fares advertised in Jul-24 for travel in Sep-24 are down 6% year-on-year versus minus 2% in the previous month.
“While the notable sequential decline here is concerning, it is consistent with the commentary in recent months from a number of carriers about softer pricing for peak summer,” said the bank.
“The biggest changes sequentially come on Europe to Rest of World in business class (-10% yoy for Sept-24 vs -1% yoy for Aug-24) and Europe to North America in the economy cabin (-4% yoy for Sept-24 vs +4% yoy for Aug-24).
“Looking by airline, the biggest sequential negative shift comes at Wizz Air Holdings PLC (AIM:WIZZ) where the fares have screened at minus 6% yoy on average vs +4% last month.
“While Ryanair Holdings PLC (LSE:RYA) still has one of the weakest overall trends at -10% yoy for September, there is at least no further sequential deterioration there unlike at most of the peers.
UBS has upgraded its price target for British Airways owner International Consolidated Airlines Group SA (LSE:IAG) to 195p from 185p after raising its forecasts for this year and the next, but it too added there “remains the potential for weakness around consumer demand”.
Neutral remains the UBS view.
Shares were flat at 164.5p on Wednesday.