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 publish a detailed update on the APAC airline sector, featuring ANA, Cathay Pacific, JAL, Korean Air, Qantas and Singapore Airlines, addressing cargo yield normalisation, and unit cost inflation.</li>
<li>We see 24% upside to consensus EBITDAR for JAL in FY24 to March 2024, and 24% downside risk at Singapore Airlines based on our detailed analysis and quarterly earnings bridges.</li>
<li>We expect earnings at most carriers to decline in calendar 2024 versus 2023 as the combination of cargo yield normalisation, fuel price pressure, and further capacity restoration prompt margin declines.</li>
</ul>


We publish a detailed update on the APAC airline sector, featuring ANA, Cathay Pacific, JAL, Korean Air, Qantas and Singapore Airlines, addressing cargo yield normalisation, and unit cost inflation.
We see 24% upside to consensus EBITDAR for JAL in FY24 to March 2024, and 24% downside risk at Singapore Airlines based on our detailed analysis and quarterly earnings bridges.
We expect earnings at most carriers to decline in calendar 2024 versus 2023 as the combination of cargo yield normalisation, fuel price pressure, and further capacity restoration prompt margin declines.


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

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>Compared to depressed traffic from last year, outbound travel in July was up dramatically; strong M/M growth versus June suggests the outbound recovery still has legs </li>
<li>Does China's relaxation of group travel to Japan and Korea matter? We offer context and conclude the change is helpful, but not a "game-changer" for overall travel demand</li>
<li>We also review July domestic traffic and preview Trip.com's Q2 results (out Sept 4th)</li>
</ul>


Compared to depressed traffic from last year, outbound travel in July was up dramatically; strong M/M growth versus June suggests the outbound recovery still has legs 
Does China's relaxation of group travel to Japan and Korea matter? We offer context and conclude the change is helpful, but not a "game-changer" for overall travel demand
We also review July domestic traffic and preview Trip.com's Q2 results (out Sept 4th)


Monthly Chinese Tourism Tracker | July Outbound Firm | Group Tour Impact | Trip.com Q2 (August 2023)

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/interglobe-aviation-ltd" target="_blank" data-smartkarma-citation="entities:24877:1" rel="noopener">InterGlobe Aviation Ltd (INDIGO IN)</a>’s co-founder, Rakesh Gangwal and his wife, aim to raise around US$450m through the bulk sale of 15.6m shares (4% of TSO).</li>
<li>He had earlier stated his intention to pare down his stake after a long drawn battle with his co-founder Rahul Bhatia. He last sold in Sep 2022 and Feb 2023.</li>
<li>In this note, we will talk about the placement and run the deal through our ECM framework.</li>
</ul>



InterGlobe Aviation Ltd (INDIGO IN)’s co-founder, Rakesh Gangwal and his wife, aim to raise around US$450m through the bulk sale of 15.6m shares (4% of TSO).
He had earlier stated his intention to pare down his stake after a long drawn battle with his co-founder Rahul Bhatia. He last sold in Sep 2022 and Feb 2023.
In this note, we will talk about the placement and run the deal through our ECM framework.


Interglobe Aviation (Indigo) Placement - Selldowns Are Becoming Increasingly Regular

Japan Specialist

Mark Chadwick

<ul>
<li>ANA has just announced that it will purchase carbon removal credits underpinned by Direct Air Capture (DAC)</li>
<li>The purchase of 30,000 credits over 3 years is virtually nothing compared to the company's annual CO2 emissions over 12 million tons</li>
<li>Assuming that DAC is expected to remove just 10% of emissions, we estimate that it could wipe out over 70% of operating profit</li>
</ul>


ANA has just announced that it will purchase carbon removal credits underpinned by Direct Air Capture (DAC)
The purchase of 30,000 credits over 3 years is virtually nothing compared to the company's annual CO2 emissions over 12 million tons
Assuming that DAC is expected to remove just 10% of emissions, we estimate that it could wipe out over 70% of operating profit


ANA (9202) | How Much Will It Cost to Capture Carbon Emissions?

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Rakuten Securities / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rakuten-securities-inc" target="_blank" data-smartkarma-citation="entities:39933:1" rel="noopener">Rakuten Securities</a>, the online securities arm of Rakuten, aims to raise around US$500m (estimated) in its Japan listing.</li>
<li>It is the largest online securities firm in Japan with a 33.7% market share. In FY22, it had over 8.64m accounts, with around JPY18.2tn (US$131bn) of assets under custody.</li>
<li>In this note, we talk about the not-so-positive aspects of the deal.</li>
</ul>



Rakuten Securities, the online securities arm of Rakuten, aims to raise around US$500m (estimated) in its Japan listing.
It is the largest online securities firm in Japan with a 33.7% market share. In FY22, it had over 8.64m accounts, with around JPY18.2tn (US$131bn) of assets under custody.
In this note, we talk about the not-so-positive aspects of the deal.


Rakuten Securities IPO Early Look - The Negatives - Growth Has Slowed Down

Japan

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.

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Ana Holdings (9202 JP)

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

Deep dive on earnings prospects of the top tier ex-China APAC full service carriers illustrates marked differences in inflation management, and...

Neil Glynn

Monthly Chinese Tourism Tracker | July Outbound Firm | Group Tour Impact | Trip.com Q2 (August 2023)

The recovery in outbound Chinese tourism remained strong in July. In this insight we also look at relaxation of Chinese group travel to Japan and...

Tracking Traffic

Interglobe Aviation (Indigo) Placement - Selldowns Are Becoming Increasingly Regular

InterGlobe Aviation Ltd (INDIGO IN)’s co-founder, Rakesh Gangwal and his wife, aim to raise around US$450m through the bulk sale of 15.6m shares...

Ethan Aw

ANA (9202) | How Much Will It Cost to Capture Carbon Emissions?

Assuming that DAC is expected to remove just 10% of emissions, we estimate that it could wipe out over 70% of operating profit - although most of...

Mark Chadwick

Rakuten Securities IPO Early Look - The Negatives - Growth Has Slowed Down

Rakuten Securities, the online securities arm of Rakuten, aims to raise around US$500m (estimated) in its Japan listing. In this note, we talk...

Sumeet Singh

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