Singapore Airlines – 4Q Likely to Extend the Theme of Earnings Normalization as FY25 Comes into View

Japanese Airlines – ANA’s Margin Outperformance Poses Big Questions for JAL

Cathay Pacific - Reported Air China Interest Prompts Assessment of Structural Disadvantages

Singapore Airlines – Onset of Earnings Normalization to Heighten Focus on Efficiency

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

Cathay Pacific Airways / Equity Bottom-Up

<ul>
<li>2023 results came in broadly in line with expectations but included a concerning step up in ex-fuel unit cost inflation.</li>
<li>We cut our 2024 EBITDAR by 10% to HK$22.2bn, which drives net income down 21% to HK$6.6bn, leaving us well below consensus.</li>
<li>We revisit Cathay's margin generation problems from the last cycle, illustrating structural problems which require structural solutions.</li>
</ul>


2023 results came in broadly in line with expectations but included a concerning step up in ex-fuel unit cost inflation.
We cut our 2024 EBITDAR by 10% to HK$22.2bn, which drives net income down 21% to HK$6.6bn, leaving us well below consensus.
We revisit Cathay's margin generation problems from the last cycle, illustrating structural problems which require structural solutions.


Cathay Pacific – Rising Inflationary Pressure Expedites Earnings Normalisation