Barclays favours low-cost airlines, cuts Lufthansa, Air France-KLM

Jet2

14/01/2026 09:08

** Barclays still prefers low-cost carriers (LCCs) versus flagship airlines, cutting its ratings on both Lufthansa LHAG.DE and Air France-KLM AIRF.PA to "underweight" from "equal-weight

** Lufthansa shares are down 2.4%, Air France slides 3.3% by 0900 GMT

** The broker cites better mainstream consumer sentiment after UK's November budget announcement and "encouraging commentary" from LCCs

** "We expect LCC commentary to brighten as the worries of the UK budget fade to history. Conversely, we expect the flag carriers' confidence about the key Atlantic to lose some of its exuberance," Barclays says

** It expects USD will remain weak and geopolitical events to challenge US-bound tourism, putting pressure on traditional airlines

** It points to North Atlantic exposure, ongoing risk of strikes, pay rise demands in Germany as factors contributing for its rating cut on Lufthansa

** On Air France-KLM, Barclays notes its exposure to premiere leisure market and negative effects of "highly disruptive" winter storms in Amsterdam

** It keeps its ratings on other airlines unchanged, easyJet EZJ.L and Jet2 JET2.L are the broker's top picks in the space

 (Reporting by Danny Callaghan)

 ((danny.callaghan@thomsonreuters.com))