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

Latam Airlines Group SA / Equity Bottom-Up

<ul>
<li>LATAM Group surprised the market with strong guidance for 2024 earnings growth following upgrades through 2023. We raise our 2024 EBITDAR 14% to $2.8bn.</li>
<li>A successful restructuring under Chapter 11, and market leadership in key regions, is paying off for LATAM as demand remains robust.</li>
<li>Such a strong recovery positions it to make further strategic gains, particularly with the risk that competitor GOL must shrink its fleet through its own CH11 processs.</li>
</ul>


LATAM Group surprised the market with strong guidance for 2024 earnings growth following upgrades through 2023. We raise our 2024 EBITDAR 14% to $2.8bn.
A successful restructuring under Chapter 11, and market leadership in key regions, is paying off for LATAM as demand remains robust.
Such a strong recovery positions it to make further strategic gains, particularly with the risk that competitor GOL must shrink its fleet through its own CH11 processs.


LATAM Group - Strong Momentum and Strategic Opportunities

Equity Capital Markets

Avianca Holdings Sa / Equity Capital Markets

<ul>
<li>Avianca reached $1,200m EBITDAR in 2023, ahead of our forecast of $1,162m, already exceeding its 2024 target.</li>
<li>The company does not provide guidance on 2024 profitability but we publish our quarterly bridge analysis and map prospects versus LATAM Group guidance.</li>
<li>We forecast 10% yoy EBITDAR growth in 2024 on 20% capacity growth, which compares to our forecast of 15% EBITDAR growth at LATAM, which is growing less aggressively.</li>
</ul>


Avianca reached $1,200m EBITDAR in 2023, ahead of our forecast of $1,162m, already exceeding its 2024 target.
The company does not provide guidance on 2024 profitability but we publish our quarterly bridge analysis and map prospects versus LATAM Group guidance.
We forecast 10% yoy EBITDAR growth in 2024 on 20% capacity growth, which compares to our forecast of 15% EBITDAR growth at LATAM, which is growing less aggressively.


Avianca – Bridging 2024 Prospects with a Little Help from LATAM

<ul>
<li>Azul and GOL running with liability positions over double LATAM – convergence required to ensure financial sustainability.</li>
<li>Azul’s USD-denominated liabilities continue to weigh heavily, suggesting profitability and full balance sheet clean up distant prospects despite lessor re-negotiations.</li>
<li>GOL’s Chapter 11 process needs to focus on balance sheet recalibration – BRL weakness may require recalibration.</li>
</ul>


Azul and GOL running with liability positions over double LATAM – convergence required to ensure financial sustainability.
Azul’s USD-denominated liabilities continue to weigh heavily, suggesting profitability and full balance sheet clean up distant prospects despite lessor re-negotiations.
GOL’s Chapter 11 process needs to focus on balance sheet recalibration – BRL weakness may require recalibration.


Brazilian Airlines – Liability Management Even More Crucial Following BRL Weakness

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:<ol><li><a href='/entities/nameson-holdings-ltd' target='_blank' rel='noopener'>Nameson Holdings</a></li><li><a href='/entities/sunny-optical-technology-group' target='_blank' rel='noopener'>Sunny Optical Technology Group</a></li><li><a href='/entities/genting-bhd' target='_blank' rel='noopener'>Genting Bhd</a></li><li><a href='/entities/shui-on-land-ltd' target='_blank' rel='noopener'>Shui On Land</a></li><li><a href='/entities/health-and-happiness-h-h-int' target='_blank' rel='noopener'>Health And Happiness (H&H)</a></li></ol>and more...

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.In this Insight:Nameson HoldingsSunny Optical Technology GroupGenting BhdShui On LandHealth And Happiness (H&H)and more...

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We view LATAM Airlines' ESG as "Adequate", given the "Adequate" scores for all the pillars. Controversies are "Material", while Disclosure is "Adequate".

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).  We view LATAM Airlines' ESG as "Adequate", given the "Adequate" scores for all the pillars. Controversies are "Material", while Disclosure is "Adequate". 

LATAM Airlines - ESG Report - Lucror Analytics

Chile

LATAM Airlines Group S.A. is an airline that provides both domestic and international flight services.  The Company provides passenger and cargo services to destinations in Chile, South America, the Caribbean, Europe, North America, and the Pacific.  LATAM Airlines operates passenger aircraft and cargo freighters.

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Latam Airlines Group SA (LTM CI)

LATAM Group - Strong Momentum and Strategic Opportunities

With LATAM announcing plans to relist on the NYSE today, we revisit our most recent deep dive on the company's earnings and cash flow prospects and...

Neil Glynn

Avianca – Bridging 2024 Prospects with a Little Help from LATAM

Following Avianca's announcement today that it plans to IPO in the US, we re-publish our latest research report on the company, including detailed...

Neil Glynn

Brazilian Airlines – Liability Management Even More Crucial Following BRL Weakness

We publish a deep dive on balance sheet and liability evolution at the Brazilian airlines in the context of continued BRL weakness which threatens...

Neil Glynn

Weekly Wrap - 21 Jul 2023

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and...

Lucror Analytics

LATAM Airlines - ESG Report - Lucror Analytics

Lucror Analytics' ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable). We view LATAM Airlines' ESG as...

Lucror Analytics

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