Citi downgrades Wizz Air, Lufthansa

Citi downgraded Wizz Air and Lufthansa on Wednesday as it took a look at the airline sector.

The bank said it reckons pricing will lose momentum in short haul compared to long haul.

"In short haul, we believe Ryanair will outperform on pricing versus peers, driven by the network flexibility," it said.

"The recent engine-related bottlenecks will impact circa 4% of short haul capacity, and the most exposed is Wizz, with c.23% exposure of current capacity," it said.

"We downgrade Wizz to sell, given the impact on capacity ramp-up will result in unit cost pressure.

"We also downgrade Lufthansa to neutral, due to downside risk to 2024 margin target."

At 0945 BST, Wizz shares were down 3.2% at 1,642p, while Lufthansa shares were 2.4% lower at €6.95. The broader airline sector took a hit after United Airlines said it was forecasting weaker earnings for the fourth quarter due to higher costs.