Founder & Managing Director, AIR Control Tower, AIR Control Tower

Neil Glynn

Founder & Managing Director, AIR Control Tower

AIR Control Tower

AIR Control Tower is an independent research and analysis platform. Its mission is to provide impactful insight and analysis across the global airline industry at a company and market level via detailed financial models to aid decision making for key stake holders at a time when risks have seldom, if ever, been higher and the global sector grapples with the imperative of funding de-carbonisation. Unique analysis forecasting global carrier-level earnings/cash flows, and restructuring/de-leveraging prospects, is designed to dynamically assess the health of the industry, predict surprises and identify potential requirements for third party support.

Insights on the global airline industry

Equity Bottom-Up

International Consolidated Airlines Group / Equity Bottom-Up

International Consolidated Airlines Group

<ul>
<li>Following AF-KLM and IAG results we refresh our forecasts, and our detailed quarterly bridge analysis in 2024 suggests each can grow earnings this year.</li>
<li>IAG clearly differentiates itself from AF-KLM with strong FCF generation while AF-KLM is unlikely to generate positive FCF before 2025 as it pays obligations deferred through COVID.</li>
<li>​Lufthansa continues to appear highest risk in 2024 given as capacity restoration catches up with peers.</li>
</ul>


Following AF-KLM and IAG results we refresh our forecasts, and our detailed quarterly bridge analysis in 2024 suggests each can grow earnings this year.
IAG clearly differentiates itself from AF-KLM with strong FCF generation while AF-KLM is unlikely to generate positive FCF before 2025 as it pays obligations deferred through COVID.
​Lufthansa continues to appear highest risk in 2024 given as capacity restoration catches up with peers.


European Airlines – FCF the Key Differentiator Between AF-KLM and IAG

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Vitesco Technologies Group / Event-Driven

<ul>
<li>In this insight, we take a look at the potential ADDs/DELs for the DAX index and the MDAX index in the run up to the March 2024 index rebal event.</li>
<li>The official index changes for the March 2024 review could be announced after the close of 5th March 2024.</li>
<li>I currently do not see any changes for the DAX index but there could be one change for the MDAX index.</li>
</ul>


In this insight, we take a look at the potential ADDs/DELs for the DAX index and the MDAX index in the run up to the March 2024 index rebal event.
The official index changes for the March 2024 review could be announced after the close of 5th March 2024.
I currently do not see any changes for the DAX index but there could be one change for the MDAX index.


Quiddity Leaderboard DAX/MDAX Mar 24: M&A Candidates Morphosys and Vitesco Could Face Index Flows

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dai-ichi-life-insurance" target="_blank" data-smartkarma-citation="entities:1109:1" rel="noopener">Dai Ichi Life (8750 JP)</a> has the wherewithal, and probably the synergies to make a bump for <a href="https://www.smartkarma.com/entities/benefit-one-inc" target="_blank" data-smartkarma-citation="entities:14502:1" rel="noopener">Benefit One (2412 JP)</a> work. M3 is clearly not in the driver's seat.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-united-network-a" target="_blank" data-smartkarma-citation="entities:12620:1" rel="noopener">China United Network (600050 CH)</a> is, for all intent and purpose, a pseudo-A to <a href="https://www.smartkarma.com/entities/china-unicom-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:1016:1" rel="noopener">China Unicom (762 HK)</a>. Go long Unicom, short United due to Unicom's significantly cheaper valuation.</li>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-expressway-co-h" target="_blank" data-smartkarma-citation="entities:2178:1" rel="noopener">Zhejiang Expressway (576 HK)</a> has had a stonking run since its rights issue. Look to unwind this set-up and take the other side: short Expressway, long <a href="https://www.smartkarma.com/entities/zheshang-securities-co-ltd" target="_blank" data-smartkarma-citation="entities:29981:1" rel="noopener">Zheshang Securities (601878 CH)</a>.
</li>
</ul>



Dai Ichi Life (8750 JP) has the wherewithal, and probably the synergies to make a bump for Benefit One (2412 JP) work. M3 is clearly not in the driver's seat.

China United Network (600050 CH) is, for all intent and purpose, a pseudo-A to China Unicom (762 HK). Go long Unicom, short United due to Unicom's significantly cheaper valuation.

Zhejiang Expressway (576 HK) has had a stonking run since its rights issue. Look to unwind this set-up and take the other side: short Expressway, long Zheshang Securities (601878 CH).



Last Week in Event SPACE: Benefit One, China Unicom, Zhejiang Expressway/ Zheshang Sec, Hollysys

<ul>
<li>In this insight, we take a look at the potential ADDs/DELs for the DAX index and the MDAX index in the run up to the March 2024 index rebal event.</li>
<li>There are currently no changes expected for the DAX changes but <a href="https://www.smartkarma.com/entities/deutsche-lufthansa-ag" target="_blank" data-smartkarma-citation="entities:21667:1" rel="noopener">Deutsche Lufthansa (LHA GR)</a> and <a href="https://www.smartkarma.com/entities/fresenius-medical-care-ag-co" target="_blank" data-smartkarma-citation="entities:21622:1" rel="noopener">Fresenius Medical Care &amp; (FME GR)</a> are quite close to becoming ADDs.</li>
<li>For the MDAX index, there could an intra-review change in January 2024 and then one more change in the March 2024 index rebal event.</li>
</ul>


In this insight, we take a look at the potential ADDs/DELs for the DAX index and the MDAX index in the run up to the March 2024 index rebal event.
There are currently no changes expected for the DAX changes but Deutsche Lufthansa (LHA GR) and Fresenius Medical Care &amp; (FME GR) are quite close to becoming ADDs.
For the MDAX index, there could an intra-review change in January 2024 and then one more change in the March 2024 index rebal event.


Quiddity Leaderboard DAX/MDAX Mar 24: Lufthansa, Zalando, Telefonica, Befesa

<ul>
<li>We are most ahead of consensus for IAG in 2024, and recognising Lufthansa's highest-in-group double-digit capacity growth rate in 2024 may render its earnings most difficult to forecast/vulnerable to disappointment.</li>
<li>For AF-KLM 2024 seems a crucial year to demonstrate it can grow earnings in more challenging conditions if it is to increase confidence it can reach near-€4bn EBIT by 2028.</li>
<li>Delta reports 2023 results today, and its outlook commentary will be important to frame 1Q24 prospects on the Transatlantic, which should encourage that 2024 will prove resilient.</li>
</ul>


We are most ahead of consensus for IAG in 2024, and recognising Lufthansa's highest-in-group double-digit capacity growth rate in 2024 may render its earnings most difficult to forecast/vulnerable to disappointment.
For AF-KLM 2024 seems a crucial year to demonstrate it can grow earnings in more challenging conditions if it is to increase confidence it can reach near-€4bn EBIT by 2028.
Delta reports 2023 results today, and its outlook commentary will be important to frame 1Q24 prospects on the Transatlantic, which should encourage that 2024 will prove resilient.


European Airlines - Bridging Quarterly 2024 Prospects Encourages with Fuel Tailwinds/Tight Supply

Germany

Deutsche Lufthansa Aktiengesellschaft provides passenger and cargo air transportation services worldwide. The Company offers flight and connection programs in North America, Scandinavia, and Asia. Deutsche Lufthansa also provides travel agency, catering, and aircraft maintenance services.

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Deutsche Lufthansa (LHA GR)

European Airlines – FCF the Key Differentiator Between AF-KLM and IAG

Deep dive on the quarterly earnings outlook for AF-KLM and IAG which illustrates the scope for each to grow EBITDAR in 2024 despite persistent...

Neil Glynn

Quiddity Leaderboard DAX/MDAX Mar 24: M&A Candidates Morphosys and Vitesco Could Face Index Flows

I expect Vitesco Technologies Group (VTSC GR) to trigger the fast exit rule and get deleted from the MDAX index and MorphoSys AG (MOR GR) could get...

Janaghan Jeyakumar, CFA

Last Week in Event SPACE: Benefit One, China Unicom, Zhejiang Expressway/ Zheshang Sec, Hollysys

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

Quiddity Leaderboard DAX/MDAX Mar 24: Lufthansa, Zalando, Telefonica, Befesa

I expect Telefonica Deutschland to be deleted from the MDAX index in January 2024 once the Tender Offer results are confirmed. If this happens,...

Janaghan Jeyakumar, CFA

European Airlines - Bridging Quarterly 2024 Prospects Encourages with Fuel Tailwinds/Tight Supply

Detailed analysis of 2024 prospects for the European network carriers suggests margin resilience given fuel tailwinds and tight supply. Quarterly...

Neil Glynn

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