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

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

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/tata-motors-ltd' target='_blank' rel='noopener'>Tata Motors Ltd</a></li><li><a href='/entities/anton-oilfield-services-gp' target='_blank' rel='noopener'>Anton Oilfield</a></li><li><a href='/entities/china-south-city-holdings' target='_blank' rel='noopener'>China South City</a></li><li><a href='/entities/panda-green-energy-group-ltd' target='_blank' rel='noopener'>Panda Green</a></li><li><a href='/entities/gcl-new-energy-holdings-ltd' target='_blank' rel='noopener'>Gcl New Energy Holdings</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:Tata Motors LtdAnton OilfieldChina South CityPanda GreenGcl New Energy Holdingsand more...

Chile

Sociedad Quimica y Minera de Chile SA produces and markets specialty fertilizers including potassium nitrate, sodium nitrate, and potassium sulfate for the agricultural industry.  The Company also produces industrial chemicals, iodine and lithium.  SQM markets its products in over 100 countries.

Sociedad Quimica y Minera de C (SQM/B CI)

Ingevec SA offers construction services.  The Company builds apartment buldings, office buildings, supermarkets,  health facilities, and civil projects; develops real estate in partnership with investment funds; leases construction equipment; and produces prefabricated bathrooms.

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.

Cathay Pacific Airways Limited operates scheduled airline services. The Company also provides related services, including airline catering, aircraft handling, and engineering.

Qantas Airways Limited provides transportation of passengers through two airlines including Qantas (full service carrier) and Jetstar (low cost carrier), operating international, domestic and regional services. The Company also includes Qantas Frequent Flyer and Qantas Freight which generates diverse revenue streams and adds value for customers and investors.

China Southern Airlines Company Limited provides commercial airline services throughout China, Southeast Asia and other parts of the world.  The Company also provides other airline related services including aircraft maintenance and air catering.

China Eastern Airlines Corporation Limited, together with its subsidiaries, operates in the civil aviation industry. It offers passenger, cargo, mail delivery, ground, cargo handling, and other extended transportation services.

Japan Airlines Co. Ltd. provides air transportation services. The Company offers a variety of scheduled  flights and unscheduled flights throughout the world as well as offers air courier services. Japan Airlines also provides tickets, resort hotels, and travel agencies services.

American Airlines Group Inc. operates an airline that provides scheduled passenger, freight, and mail service throughout North America, the Caribbean, Latin America, Europe, and the Pacific.  The Company also provides connecting service throughout the United States, Canada, and the Caribbean.

ANA Holdings Inc provides a variety of air transportation-related services. The Company offers scheduled & unscheduled air passenger services and air courier services. ANA sells aircraft parts and provides travel arrangement & reservation services as well.

Air China Limited provides passenger, cargo, and airline-related services in China.  The Company is primarily based in Beijing and a major hub for domestic and international air transportation.  Air China's airline-related services include aircraft maintenance, repair, overhaul service, ground services, and in-flight catering services.

Korean Air Lines Co., Ltd. operates air transportation services.  The Company's services include passenger and cargo transportation, aircraft maintenance, and air catering.  Korean Air Lines provides domestic and international airline services.

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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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

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

Weekly Wrap - 26 Nov 2021

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

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