Strong Summer Traffic Leads to Narrowing Losses at Aena

A rebound in traffic over the summer period led to a strong recovery in narrow moat Aena’s revenue and profits from the first half of the year. Nine-month revenue grew by 1.6%, from a sharp 22% decline in the first half, while losses narrowed to EUR 123 million for the first nine months from EUR 346 million at the H1 results. Traffic increased by 17% year-over-year to 87 million passengers, still 64% below pre-pandemic levels, but showing a strong recovery to 60% of 2019 traffic levels in September, from 33% reported in June, which benefited from leisure travel after the lifting of travel restrictions in the U.K. and Europe. 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.