Jet fuel crunch puts 2027 earnings at risk for European airlines, JPM says
BUZZ-Jet fuel crunch puts 2027 earnings at risk for European airlines, JPM says ** JPMorgan says the latest surge in jet fuel prices could lead to weaker earnings for European airlines next year, with low-cost carriers more exposed to higher energy costs
** "We expect further capacity cuts if fuel remains high, especially from the mid-lower end of the market in short-haul," JPM says
** The brokerage says further spikes in fuel prices could lead to larger operating losses in 2027, particularly for budget airlines
** However, long-haul carriers, such as British Airways owner IAG ICAG.L, are best placed to withstand further energy price increases, it adds
** Flag carriers are less sensitive to fuel hikes due to stronger hedging to lock in prices and steady passenger demand for premium services, JPM says
COMPANY | RATING | OLD RATING | PT | OLD PT |
Air France-KLM | Overweight | Overweight | €14.50 | €16 |
easyJet | Neutral | Neutral | 715 pence | 715 pence |
IAG | Overweight | Overweight | €5.75 | €5.75 |
Lufthansa | Neutral | Neutral | €7 | €7.50 |
Ryanair | Overweight | Overweight | €29 | €32 |
Wizz Air | Neutral | Neutral | 1,050 pence | 1,200 pence |
(Reporting by Gianluca Lo Nostro)
((gianluca.lonostro@thomsonreuters.com))
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