Cathay Pacific – Rising Inflationary Pressure Expedites Earnings Normalisation

Japan Airlines – Encouraging Lifting of Medium Term Expectations to Narrow Recovery Gap to ANA

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

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

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

APAC Airline Sector – Cost Inflation Management Differentials Crucial as Cargo Yields Normalise

Cathay Pacific – Strong Pax Momentum Suggests 2024 Can Outperform Expectations

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

<ul>
<li>We refresh estimates for ANA and JAL, and highlight we think the strength of FY24 makes it difficult for ANA to avoid an earnings decline in FY25.</li>
<li>However, ANA's superior recovery to JAL poses bigger questions for JAL as it revisits its medium term plan on 21 March</li>
<li>Our deep dive on margin management at each carrier suggests a revenue problem rather than a cost problem at JAL; but without revenue improvements, it will have to cut costs</li>
</ul>


We refresh estimates for ANA and JAL, and highlight we think the strength of FY24 makes it difficult for ANA to avoid an earnings decline in FY25.
However, ANA's superior recovery to JAL poses bigger questions for JAL as it revisits its medium term plan on 21 March
Our deep dive on margin management at each carrier suggests a revenue problem rather than a cost problem at JAL; but without revenue improvements, it will have to cut costs


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