Yesterday, FWAG released March '24 traffic results ahead of our estimates:

In March, group passenger numbers rose by 12% yoy to 2.88m (eNuW: 2.80m). Vienna (VIE) grew by 8% yoy to 2.21m passengers (eNuW: 2.21m) despite the strike by Austrian Airlines' employees at the end of the month. Malta grew much stronger than expected, +30% yoy to 0.63m (eNuW: 0.54m) while Kosice showed a slight yoy decline of 1.2% to 0.03m passengers (eNuW: 0.05m). (see p. 2)

Looking at VIE only, the most important destination of Western Europe (35% of VIE passengers) rose by 11% yoy, whereas the second most important destination of Eastern Europe grew by 1.7%, followed by the long-haul routes North America (+10% yoy), Africa (+13% yoy) and Far East (+5% yoy).

Thus, Q1'24 counted 7.58m group passengers, up +14% yoy, of which 78% in Vienna, 21% in Malta and 1% in Kosice. This leads us to expect strong Q1 results, as the statutory 9.7% increase of airport charges (c. 40% of sales) coupled with the passenger growth should lead to overall sales growth of 17% yoy to € 212m in Q1'24e.

Further down the road, we expect Q2 & Q3'24e to come in even stronger due to the busy summer months ahead. Q4 should show a seasonal decline (qoq). Especially the current summer flight plan as well as airline booking data indicate an outperformance of last year's summer.

Against this stellar start into the year, the FY'24 guidance issued in January this year  seems conservative already. As we expect passenger growth rates converging to 3% over the course of the year, FY'24e group passengers should grow by 5.7% yoy to 40.1m (vs. guidance of c. 39m guidance, +3% yoy). This looks set to translate into € 1,010m sales (+8.5% yoy; vs. guidance of c. € 970m) and EBITDA of € 417m (41.2% margin; vs. guidance of "above" € 390m) for FY'24e. (see p. 2 for details)

All in all, FWAG is well on track to record another record year as demand for travel remains unbroken and supply of flight capacity by the airlines is also expanding, leading to rising passenger numbers,ultimately benefiting the airport operator. Nevertheless, this seems to be reflected in its current valuation. Thus, we stick to our HOLD recommendation (unchanged PT of € 58.00, based on DCF), despite the company's stellar operating performance.