Intermoney | The latest estimate from the European Organisation for the Safety of Air Navigation (Eurocontrol) flags that air traffic in Spain will recover pre-Covid levels in 2024, a year, in fact, in which they would be 3% higher than in 2019, according to the daily Expansion.
This would partly be in contrast with other markets like Italy and the UK (+2%) and particularly Germany, which would remain slightly below this level. At the moment, only Greece and Portugal have recovered pre-pandemic activity. Eurocontrol has taken into account the damaged caused by the war in Ukraine, as well as other factors like the slow recovery in corporate air travel.
Valuation:
Eurocontrol basically coincides with our estimate for Aena’s traffic (Buy, TP 140 euros/share), up 3% en 2024e vs 2019. The operator has upped its guidance for this year with respect to 2019 to a range of 75-85% from 68%. Our forecast in this respect is 79%. We expect that in Q3 2023e 100% will finally be reached and, from then on, activity will rise more or less nominally. Our target price of 140 euros is still lower than that pre-Covid (170 euros), as then the traffic estimated for 2024e was 9% higher than our current forecast. That said, Aena should benefit from estimates in the DORA 2, which indicate a recovery only in 2026; the current regulation neither compensates nor penalises Aena for varations in traffic in absolute terms, only for their mix.
