British Airways parent International Consolidated Airlines Group SA (LSE:IAG) is a "key way" to gain exposure to an emerging transatlantic recovery trend, according to Citi.
The US investment bank sent a note to clients on the back of stronger-than-expected results from major US carriers, which is seen as a positive read-across for European flag carriers.
Analyst Conor Dwyer pointed to accelerating revenue growth and rebounding pricing from Delta and United Airlines as signs of renewed strength in the transatlantic market, particularly for premium cabins.
This rebound follows a soft summer for long-haul travel and is seen as a potentially powerful tailwind for European peers, including IAG and Lufthansa, which operate joint ventures with the US majors.
Crucially, Citi believes IAG is better positioned to benefit from this trend due to its slightly higher transatlantic exposure than Lufthansa, plus shares in the German carrier have already re-rated in line with rising earnings expectations.
IAG, by contrast, remains more closely aligned with consensus estimates, offering more room for upside if demand and yields continue to improve.
While capacity growth remains limited across key EU-US routes, the analyst said he sees pricing and yield recovery as the key earnings lever.