Morgan Stanley | Capacity growth in long-haul travel poses risks around 2024 pricing power for flag carriers, especially those with exposure to the North Atlantic. However, Conor Dwyer (analyst), notes that rising air freight yields (+25% in December to 1.9x 2019 levels), as a result of disruptions in container shipping, should limit the impact. This dynamic is more favourable for Air France and Lufthansa, more exposed to air freight than IAG, which is why Lufthansa rises to Equalweight and IAG falls, becoming a relative UW.
LUFTHANSA, FROM UNDER TO EQUALWEIGHT, from €6.70 to €9.80
IAG, FROM EQUAL TO UNDERWEIGHT, from €2.20 to €2.05
AIR FRANCE, EQUALWEIGHT, from €14 to €15
