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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>Spirit Airlines finished 2023 as expected and highlights improving pricing momentum in early 2024 which should drive some margin recovery.</li>
<li>However, we still expect EBITDAR/ASM to finish 2024 down 72% on 2019, with a maximum 50% deficit required to avoid escalating debt. This drives a focus on Chapter 11 risk.</li>
<li>Management is adamant liquidity is sufficient to allow it to recover but significant margin gains, led by pricing expansion despite aggressive growth plans, are required for financial sustainability.</li>
</ul>


Spirit Airlines finished 2023 as expected and highlights improving pricing momentum in early 2024 which should drive some margin recovery.
However, we still expect EBITDAR/ASM to finish 2024 down 72% on 2019, with a maximum 50% deficit required to avoid escalating debt. This drives a focus on Chapter 11 risk.
Management is adamant liquidity is sufficient to allow it to recover but significant margin gains, led by pricing expansion despite aggressive growth plans, are required for financial sustainability.


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