HSBC Sees Clearer Recovery in Aviation in Turkey and Russia
(Bloomberg) -- Traffic, capacity, yield and cost trends favor Turkish and Russian aviation markets over UAE as the industry recovery becomes more visible in the course of 2017, HSBC analyst Cenk Orcan writes in research report.
- Russia saw strong passenger volumes in 1Q and Turkey bottomed out Y/y, started growing in April w/ strong bookings reported for summer
- UAE seen facing challenges still, with visibility for recovery remaining poorer compared with Turkey and Russia
- Says Turkey is a better “recovery” play given demand/oil price dynamics and valuation scope for stocks
- Upgrades Pegasus Hava and TAV Havalimanlari Holding to Buy from Hold
- Pegasus PT raised to 19.50 liras vs 15.50 liras, TAV’s PT raised to 19.30 liras vs 16.30 liras
- Sees improved traffic mix for TAV, revised assumption that operations at Ataturk Airport will cease one year later than initially forecast (2020 vs 2019), which is expected to unlock additional value
- Raises Aeroflot PT to 200 ruble vs 180, Turkish Airlines PT to 7.60 liras vs 6.50
- Cuts Air Arabia PT to 1.12 dirhams vs 1.20
To contact the reporter on this story: Tugce Ozsoy in Istanbul at tozsoy1@bloomberg.net To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net Angela Cullen
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
Tickers AFLT RM (Aeroflot PJSC)
AIRARABI UH (Air Arabia PJSC)
PGSUS TI (Pegasus Hava Tasimaciligi AS)
TAVHL TI (TAV Havalimanlari Holding AS)
THYAO TI (Turk Hava Yollari AO)
People Cenk Orcan (HSBC Securities Asia Ltd)
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