Original-Research: Flughafen Wien AG - from NuWays AG
17.07.2025 / 09:00 CET/CEST
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Classification of NuWays AG to Flughafen Wien AG

12 day war dampens growth, focus on 3rd runway decision day

Topic: FWAG released June traffic results, that are temporarily dampened by the twelve day Iran-Israel war in June. Despite sound operating results, investors should start to focus on the upcoming decision day for the 3rd runway project. In detail:

June passenger numbers rose by 1.5% yoy to 4.03m on group level. The growth was particularly driven by the strategic investments MLA (+7.5% yoy; 23% group share) and KSC (+9.5% yoy; 2.5% group share), whereas the main airport VIE declined by 0.4% yoy to 3.02m passengers. Compared to other European airports (FRA: 3% yoy, MUC: 6% yoy, ZUR: 5% yoy, MAD: 0.5% yoy), VIE thus fell behind in terms of growth. On a YTD basis however, VIE still stands well positioned against its peers, showing a solid 2.4% yoy passenger growth rate (FRA: 1% yoy, MUC: 3.6% yoy, ZUR: 3% yoy, MAD: 3% yoy).

This effect should be largely explained by the fact, that 1) VIE serves as an important hub in the Israel - USA travel route and 2) is relatively strong on the standalone Austria-Israel travel route. Due to the twelve day Iran-Israel war, almost all VIE <-> Israel flights were cancelled (except from Israel’s airline El Al). Going forward, Austrian Airlines, Lufthansa, Ryanair and Wizz Air aim to resume scheduled flights to Israel in August. Therefore, the effect from the war on VIE’s passenger growth should also be visible in July ’25. Although the effect cannot be isolated in full, we estimate a c. 50k monthly passengers loss from the war, which would imply a June growth rate of 1.3% yoy, had the war not happened.

Focus on the third runway project decision. Vienna airport should decide upon the third runway project within the next 6-12 months, with the following implications: In a positive decision, VIE would use its existing cash and probably further external (debt or potentially equity) financing to build a third runway south of the current field by 2030. Mind you, this project would not encompass a sole runway, but would include terminal buildings and many other infrastructure measures with a total CAPEX of more than € 2bn (eNuW). This would provide sufficient capacities for decades and would secure future growth potentials in the long-term. In a negative decision scenario, FWAG has a very high surplus cash (Q1’25: € 562m), which is not needed to fund CAPEX and which will likely be distributed to shareholders in the form of dividends (one big special dividend or an elevated dividend over multiple years), in our view.

Against this backdrop, the operational performance during the current summer season is increasingly taking a back seat, when looking at FWAG as an investment opportunity, in our view. Therefore, we reiterate our HOLD recommendation with unchanged PT of € 60.00, based on DCF.

You can download the research here: flughafen-wien-ag-2025-07-17
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