BUZZ-European airlines: Barclays highlights demand problem

** Air France (Paris: FR0000031122 - news) and Deutsche Lufthansa both at 3.5-month lows, down 3.8% and 2.3% respectively, with IAG 1.5% weaker as Barclays (LSE: BARC.L - news) cuts TPs following Q1 results

** Brokerage says even if the airlines' margins are still rising thanks to fuel savings, the demand for many of them is softer than anticipated

** TP cuts: Air France to 9.10 eur v 10 eur, Lufthansa to 13.5 eur v 14.5 eur, IAG to 700p v 750p

** Says revenue softness driven by a combination of demand issues: geopolitical shocks, a mixed economic backdrop, and the effect of low oil prices on revenue, all set against ambitious industry capacity plans

** 'Underlying' demand: Barclays has some optimism into H2 (its model suggests underlying revenue may have troughed in H1 2016, as the oil price effect should annualise through the summer and turn positive)