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Can European airline stocks take off this year?
Are European airline stocks about to soar? Some of the largest EU carriers appear to following in the slipstream of US airlines, where firms have managed to stay airborne despite the financial crisis pressuring tight margins.
According to Saxo Bank’s Head of Equity Strategy, Peter Garnry, some of the US hedge funds which bet heavily on American airlines have seen healthy returns.
Now in Europe we’re starting to see better passenger figures; as recent results from Air France have shown.
However, there is still a clear dividing line between European operators and their American counterparts, US airlines enjoy better market capitalisation, cashflow and carry less debt.
Lufthansa and Air France are the two of the weakest airlines, in Peter Garnry’s view, in terms of their capital base . However, Peter thinks that all the public European airlines are undervalued on fundamentals so he is positive on the whole sector.
01:30 minutes
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