Liberum names IAG, Ryanair and Easyjet as top European airline picks

Liberum has highlighted UK-listed IAG, Ryanair and Easyjet as its top picks across the European airline sector, saying it sees "opportunities for the brave" despite sentiment remaining fragile across the industry.

"An old investment adage states that you should buy when others are fearful. There is plenty of fear to go around in the airline industry at present," said analyst Gerald Khoo.

"Amidst concerns over Ebola, Eurozone recession and excess capacity, we believe there are good long-term opportunities for investors with high risk tolerances."

IAG remains the broker's top pick, rated 'buy', as its strength in the UK and US markets means its less-exposed to the Eurozone than its network carrier peers.

Ryanair and Easyjet have both been upgraded from 'hold' to 'buy' on expectations that any market weakness may provide another opportunity for market-share gains.

In regards to Ebola, Khoo said that the outbreak, if largely contained to west Africa, should only have a limited financial impact on European airlines.

He said: "The airline industry has endured pandemic scares before, but demand has always recovered rapidly, albeit with the help of price stimulation. Past crises show that greed outweighs fear, and that air travel demand remains price elastic. We expect this time to be little different."