UBS assumed coverage of Frontier Group (ULCC) with a Neutral rating and $6 price target The firm says supply and demand balance is the most important driver of airline RASM growth and margin performance, and expects the downshifting of supply growth from 5%- 6% in the first half of 2024 to 1%-2% growth in the second half to support an improvement in supply and demand which translates to stronger RASM growth and improving margins in 2025, the analyst tells investors in a research note. UBS believes the airlines sector as a whole should benefit in the upcoming year as supply moderation drives RASMs higher for a number of players, but recommends being selective when investing in the space.
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