By Cristina Gallardo

European airlines are expected to report higher earnings, buoyed by a smaller-than-feared drop in transatlantic flight demand, while the Easter calendar shift boosted April's figures.

Here is what to know:

WHAT TO WATCH:

--EARNINGS: Air France-KLM and its German rival Deutsche Lufthansa are both expected to report a swing to net profit in their second quarter, according to Visible Alpha consensus.

The former is likely to post a net profit of 398.01 million euros ($464.3 million) after two consecutive quarters in the red due to a one-off drag from travelers avoiding Paris during the Olympics. Deutsche Lufthansa's net income is expected to rise by 30% to 609.09 million euros.

Meanwhile, London-listed International Consolidated Airlines, owner of British Airways and Iberia, is expected to post a 6.9% on-year increase in its second-quarter net income, according to Visible Alpha.

Among low-cost carriers, Ryanair is expected to report a 98% jump in first-quarter net income, according to Visible Alpha. Wizz Air Holdings first-quarter operating profit is expected to rise 46%, according to Visible Alpha consensus.

Investors will focus on the real magnitude of the often-cited softness in demand for transatlantic flights, due to a decline in Europeans traveling to the U.S. This drop appears to be modest and unlikely to hinder a strong year, Bernstein analysts Alex Irving and Antoine Madre said in a research note.

Investors will also keep a close eye on the summer outlook, which could boost summer yields because of constrained capacity, BofA Securities analyst Muneeba Kayani said.

--PRICING AND COSTS: Low-cost carriers' second-quarter fares could grow up to 7% from a decline of 3% in the first quarter, as April's demand was boosted by the Easter calendar shift, Kayani said. However, cost inflation is likely to persist throughout the summer, and although fuel prices have risen recently, fuel remains a tailwind for European airlines, she said.

IAG could see the most constrained market capacity this year, and benefit from strong demand for Latin America flights and premium cabin seats, J.P. Morgan's Harry Gowers said in a note.

Unit revenues are expected to be relatively muted in the case of Lufthansa, especially taking into account the comparison with second quarter of the previous year, when there was a large drop in pricing and a knock-on bookings impact from strikes, according to J.P. Morgan.

France's air-traffic controllers' strikes in early July could create disruption-related costs into the summer, particularly for Air France-KLM, J.P. Morgan added.

WHEN COMPANIES ARE SCHEDULED TO REPORT:

-- Easyjet 3Q: Thursday.

-- Ryanair 1Q: Monday.

-- Wizz Air 1Q: July 24.

-- Air France-KLM 2Q: July 31.

-- Deutsche Lufthansa 2Q: July 31.

-- IAG 1H: Aug. 1.

Write to Cristina Gallardo at cristina.gallardo@wsj.com

(END) Dow Jones Newswires

July 15, 2025 06:15 ET (10:15 GMT)

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