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

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International Consolidated Airlines Group / Equity Bottom-Up

International Consolidated Airlines Group

<ul>
<li>Following AF-KLM and IAG results we refresh our forecasts, and our detailed quarterly bridge analysis in 2024 suggests each can grow earnings this year.</li>
<li>IAG clearly differentiates itself from AF-KLM with strong FCF generation while AF-KLM is unlikely to generate positive FCF before 2025 as it pays obligations deferred through COVID.</li>
<li>​Lufthansa continues to appear highest risk in 2024 given as capacity restoration catches up with peers.</li>
</ul>


Following AF-KLM and IAG results we refresh our forecasts, and our detailed quarterly bridge analysis in 2024 suggests each can grow earnings this year.
IAG clearly differentiates itself from AF-KLM with strong FCF generation while AF-KLM is unlikely to generate positive FCF before 2025 as it pays obligations deferred through COVID.
​Lufthansa continues to appear highest risk in 2024 given as capacity restoration catches up with peers.


European Airlines – FCF the Key Differentiator Between AF-KLM and IAG

<ul>
<li>We are most ahead of consensus for IAG in 2024, and recognising Lufthansa's highest-in-group double-digit capacity growth rate in 2024 may render its earnings most difficult to forecast/vulnerable to disappointment.</li>
<li>For AF-KLM 2024 seems a crucial year to demonstrate it can grow earnings in more challenging conditions if it is to increase confidence it can reach near-€4bn EBIT by 2028.</li>
<li>Delta reports 2023 results today, and its outlook commentary will be important to frame 1Q24 prospects on the Transatlantic, which should encourage that 2024 will prove resilient.</li>
</ul>


We are most ahead of consensus for IAG in 2024, and recognising Lufthansa's highest-in-group double-digit capacity growth rate in 2024 may render its earnings most difficult to forecast/vulnerable to disappointment.
For AF-KLM 2024 seems a crucial year to demonstrate it can grow earnings in more challenging conditions if it is to increase confidence it can reach near-€4bn EBIT by 2028.
Delta reports 2023 results today, and its outlook commentary will be important to frame 1Q24 prospects on the Transatlantic, which should encourage that 2024 will prove resilient.


European Airlines - Bridging Quarterly 2024 Prospects Encourages with Fuel Tailwinds/Tight Supply

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

The Europe HY Trade Book for December 2023 includes current trade recommendations drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

  The Europe HY Trade Book for December 2023 includes current trade recommendations drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry. 

Europe HY Trade Book - December 2023 - Lucror Analytics

The Europe HY Trade Book for October 2023 includes current trade recommendations drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

  The Europe HY Trade Book for October 2023 includes current trade recommendations drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry. 

Europe HY Trade Book - October 2023 - Lucror Analytics

Our H1/23 Assessment and Outlook report is a review of the performance of companies under our coverage in the stated period. Following a brief discussion of macro trends as well as monetary policy and input cost developments, we assess how these companies performed compared to our analysts’ expectations, and examine credit stats trends. We provide overviews of sector developments, as well as summaries of all the companies’ earnings. This includes classifying all the names into either picks or pans, to provide an overview of which companies we are comfortable of investing in a portfolio context. We highlight that both our picks and pans can be names for which we have “Hold” recommendations.

  Our H1/23 Assessment and Outlook report is a review of the performance of companies under our coverage in the stated period. Following a brief discussion of macro trends as well as monetary policy and input cost developments, we assess how these companies performed compared to our analysts’ expectations, and examine credit stats trends. We provide overviews of sector developments, as well as summaries of all the companies’ earnings. This includes classifying all the names into either picks or pans, to provide an overview of which companies we are comfortable of investing in a portfolio context. We highlight that both our picks and pans can be names for which we have “Hold” recommendations. 

Europe HY – H1/23 Assessment And Outlook - Lucror Analytics

France

Air France-KLM provides air transportation services. The Company operates airlines and offers travel booking, catering, freight transportation, aircraft maintenance, and pilot training services. Air France-KLM serves customers worldwide.

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Air France-KLM (AF FP)

European Airlines – FCF the Key Differentiator Between AF-KLM and IAG

Deep dive on the quarterly earnings outlook for AF-KLM and IAG which illustrates the scope for each to grow EBITDAR in 2024 despite persistent...

Neil Glynn

European Airlines - Bridging Quarterly 2024 Prospects Encourages with Fuel Tailwinds/Tight Supply

Detailed analysis of 2024 prospects for the European network carriers suggests margin resilience given fuel tailwinds and tight supply. Quarterly...

Neil Glynn

Europe HY Trade Book - December 2023 - Lucror Analytics

The Europe HY Trade Book for December 2023 includes current trade recommendations drawn from our European HY coverage universe, along with...

Lucror Analytics

Europe HY Trade Book - October 2023 - Lucror Analytics

The Europe HY Trade Book for October 2023 includes current trade recommendations drawn from our European HY coverage universe, along with...

Lucror Analytics

Europe HY – H1/23 Assessment And Outlook - Lucror Analytics

Our H1/23 Assessment and Outlook report is a review of the performance of companies under our coverage in the stated period. Following a brief...

Lucror Analytics

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