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 Capital Markets

Grupo Aeromexico / Equity Capital Markets

<ul>
<li>We update forecasts for Mexican carriers Aeromexico, Viva Aerobus and Volaris following extremely strong 1Q results, driven by capacity management.</li>
<li>We expect each carrier to produce record performances in 2024 as pricing gains continue through the year.</li>
<li>However, we expect market conditions to normalise beyond 2024 and see further gains as a lot more difficult, particularly given drag from higher aircraft ownership costs.</li>
</ul>


We update forecasts for Mexican carriers Aeromexico, Viva Aerobus and Volaris following extremely strong 1Q results, driven by capacity management.
We expect each carrier to produce record performances in 2024 as pricing gains continue through the year.
However, we expect market conditions to normalise beyond 2024 and see further gains as a lot more difficult, particularly given drag from higher aircraft ownership costs.


Mexican Airlines - Capacity Management to Drive Bumper 2024; Gains Beyond Difficult

<ul>
<li>Aeromexico reported record profitability in 2023 and we expect another record in 2024.</li>
<li>Our deep dive on the competitive landscape suggests a benign outlook as Aeromexico does not face competitor capacity growth in 2024.</li>
<li>The US DOT's tentative ruling that Delta and Aeromexico must terminate their JV is a meaningful negative from 4Q24 unless their appeal is successful.</li>
</ul>


Aeromexico reported record profitability in 2023 and we expect another record in 2024.
Our deep dive on the competitive landscape suggests a benign outlook as Aeromexico does not face competitor capacity growth in 2024.
The US DOT's tentative ruling that Delta and Aeromexico must terminate their JV is a meaningful negative from 4Q24 unless their appeal is successful.


Aeromexico – Another Record Year in Prospect in 2024

<ul>
<li>We raise our forecasts to reflect the strength of International revenue at Aeromexico - we expect it to beat 2023 EBITDAR targets by 26%</li>
<li>Aeromexico has been outperforming domestic competitors Volaris, Viva Aerobus due to international unit revenue gains - their forced capacity cuts due to GTF issues should help Aeromexico manage 2024 margins</li>
<li>Fitting with the global theme of consolidation difficulties, the US has ruled the Delta/Aeromexico JV must terminate - this could be a double digit % risk to PBT</li>
</ul>


We raise our forecasts to reflect the strength of International revenue at Aeromexico - we expect it to beat 2023 EBITDAR targets by 26%
Aeromexico has been outperforming domestic competitors Volaris, Viva Aerobus due to international unit revenue gains - their forced capacity cuts due to GTF issues should help Aeromexico manage 2024 margins
Fitting with the global theme of consolidation difficulties, the US has ruled the Delta/Aeromexico JV must terminate - this could be a double digit % risk to PBT


Aeromexico - International Strength Accelerating Progress but Delta JCA Termination a Speed Bump

Mexico

Grupo Aeromexico SAB de CV operates as an airline. The Company offers air transportation services, as well as promotes passenger loyalty programs. Grupo Aeromexico serves customers worldwide.

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Grupo Aeromexico (AEROMEX US)

Mexican Airlines - Capacity Management to Drive Bumper 2024; Gains Beyond Difficult

Deep dive on the financial prospects of the three major Mexican airlines, Aeromexico, Viva Aerobus and Volaris, highlighting record performances in...

Neil Glynn

Aeromexico – Another Record Year in Prospect in 2024

Detailed forecasts for Aeromexico suggest another record year in prospect in 2024 as our deep dive on competitive capacity suggests a benign...

Neil Glynn

Aeromexico - International Strength Accelerating Progress but Delta JCA Termination a Speed Bump

Highlighting the upside to targets from Aeromexico's international revenue momentum, and providing insight into the risk to profitability from the...

Neil Glynn

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