International Consolidated Airlines Group SA (LSE:IAG) offers the strongest earnings protection in the European airline sector amid market turbulence, with its heavy exposure to transatlantic routes and cheap valuation making it the standout buy in the sector, according to Citi.
The broker retains its buy rating on IAG with a 600p price target ahead of the company's first-quarter 2026 results on 8 May.
Analyst Conor Dwyer notes that IAG shares have outperformed the broader sector year to date, falling 6% against declines of between 10% and 27% among peers.
Yields on North Atlantic routes are accelerating sharply into the first quarter, and Citi identifies IAG's network as the only part of its airline coverage where carriers are actively responding to higher fuel costs with capacity reductions rather than mere schedule disruptions.
Dwyer flags two key factors that could drive a re-rating of the shares in the medium term.
The first is how well premium passengers continue to absorb higher ticket prices over the summer, a dynamic that will be closely watched in management commentary at the results.
The second is IAG's ability to sustain shareholder returns through a more challenging operating environment, which Citi believes could provide the market with the evidence it needs to reassess the valuation.
IAG's owner airlines include British Airways, Iberia, Vueling, and Aer Lingus, giving the group a significant structural advantage in transatlantic capacity relative to European short-haul-weighted peers.