Citi’s quantitative research team has highlighted three Western European airlines—Ryanair, International Airlines Group (IAG) and Air France-KLM—as the most favored by institutional investors, despite broader sector positioning remaining mixed.
The Irish low-cost carrier Ryanair ranks highest in long positioning among regional peers, even as its shares have lagged recent market performance. First-quarter profit fell 34% year-over-year to €538 million, reflecting higher fuel costs and weaker-than-expected summer pricing. Analysts at Citi noted that investors are closely monitoring near-term margin risks, though the airline retains the strongest long positioning in the sector.
IAG, the parent company of British Airways and Iberia, remains a focus for investors despite not entering the consensus long category. The group delivered first-half operating profit of €1.757 billion, defying higher fuel expenses and operational disruptions in the Middle East. Its relative resilience has kept it on institutional radar screens.
Air France-KLM recorded the most significant improvement in long positioning over the past month, placing it among the top three longest-held names in the sector. The Franco-Dutch carrier posted first-quarter operating results of €484 million, exceeding analyst expectations. The airline also submitted a binding offer for a minority stake in Portugal’s TAP SA, signaling strategic expansion ambitions.
Sector positioning remains fragmented, with Lufthansa holding some of the shortest exposure and Wizz Air continuing to face heavy short interest. Lufthansa’s positioning has become more debated in recent weeks as both long and short crowding metrics have risen, while the carrier also reached a labor agreement with its pilots’ union to resolve ongoing disputes. Wizz Air, meanwhile, reported a first-quarter loss of €198 million, citing elevated fuel costs and fleet disruptions.
