Summer kick-off at strong levels and above peer group

In May, group passenger numbers rose by 3.7% yoy to 3.75m, whereof VIE grew by 2% yoy (75% of passengers), MLA by 8% yoy (24% of passengers) and KSC by 31% yoy (1% of passengers). On a YTD basis, this translates into an increase of 5.5% yoy at group level, whereof VIE grew by 3% yoy, MLA by 13% yoy and KSC by 24% yoy.

Low-cost carriers support VIE growth. The (in relative terms) weaker growth visible at VIE is largely explained by a softer start into the year from the Lufthansa Group (46% market share at VIE), whose total passenger numbers declined by 2.6% yoy in Q1. This was overcompensated by low-cost carriers (32.5% market share), which have gained further market share at VIE with a growth of 7.4% yoy in Q1. Mind you, a higher share of low-cost carriers is generally attractive for airports, as they usually have higher seat-load factors and are charged mostly the same fees as premium carriers.

Leading the peer group overall: By showing a group wide YTD growth of 5.5% yoy, FWAG is currently only outperformed by Athens (+8.5% yoy). All other major European airports in the peer group show less passenger growth than FWAG (Frankfurt: +1% yoy, Munich +3% yoy, Zurich: +3% yoy, Madrid: 3.6% yoy and Paris: 4.6% yoy). This highlights the above average travel demand at FWAG, in our view.

Quality leader. Again and again, VIE wins renowned awards such as “Best Airport Staff Europe” from Skytrax. The high quality also becomes visible in non-financial KPIs such as punctuality (#1 in Europe) and security waiting times (95% wait less than 5 min). Only recently, a study conducted by AÖV (Austrian Airports Association) showed that more than 78% respondents awarded top marks for passenger satisfaction at Austrian airports, with VIE making up a large part of that. All this leads to happy passengers which directly leads to happy customers (i.e. airlines).

In sum, the upcoming summer season should defy concerns about dropping air travel demand, as we expect the high figures from last year to be defended thanks to a very resilient demand and slight capacity increased from the airlines. The stock however remains a HOLD with unchanged PT of € 60.00, based on DCF.