Slow Traffic Recovery Weighs on Aena’s First-Half 2021 Results; Fair Value Estimate Maintained

Narrow moat Aena continues to struggle through the recovery in air traffic as frst-half 2021 revenue declined by 22% to EUR 862 million and widens its net loss to EUR 346 million, from EUR 170 million a year earlier. Traffic declined by 35% year over year to 33 million passengers, some 80% below prepandemic levels. The recovery in revenue and profits are geared to a recovery in air traffic to Spain, which seems to be gaining some traction with the lifting of travel restrictions in the U.K. and Europe from the beginning of July. Spanish air traffic traditionally attracts a higher share of intra-European and low-cost carrier traffic than peers--both are segments of the market that are outperforming and bodes well for an earlier recovery in Aena’s traffic levels. We maintain our EUR 140 fair value estimate with shares currently trading in fair value territory.