European Airlines: June quarter preview – less uncertainty, but some big questions

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European Airlines: June quarter preview – less uncertainty, but some big questions

Barclays | European Airlines

Finnair, which has around 40% of its capacity in the Asian market. The impact on AF-KLM and

Lufthansa is less extreme, as their Asian networks are large but not as relevant as for Finnair.

Demand brightens: We think that the strong messaging from airlines at the end of May, that

fuel availability concerns had abated, will have bolstered consumer confidence for short haul

travel. We think the subsequent ceasefire in the Iran War and drop in the fuel price will have

further boosted the confidence of consumers. Hard evidence is sparse at the moment. At its 11

June FY26 results, Wizz offered data showing booking windows extending. Our credit card

spending tracker shows the rate of spending decline is now slowing. We expect company

commentary in the coming weeks will point to strengthening booking trends and unit revenues.

We think the fuel availability and peace will have arrived just in time to rescue peak summer

trading; had these factors come a couple of weeks later we thing the peak summer trading

period would have been dominated by heavy discounted fares to drive volumes – as it is, we

think pricing will be relatively robust. This conclusion might not apply so robustly to Nordic

markets where the summer travel peak occurs a month ahead of Western Europe. Meanwhile,

we think that trading on the Atlantic has remained relatively stable, with very strong premium

demand but more volatile trends in the economy cabin.

We expect windfall gain to Asia to fade: European airlines have enjoyed a windfall gain from

trading to Asia and Africa, as travellers that previously routed through the Gulf are flying on non-

stop services from Europe.