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

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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>With 1H24 results, Qantas followed Singapore Airlines in highlighting fare weakness in international markets and we cut our pre-tax income by 13% to FY24.</li>
<li>We expect FY24 pre-tax income to fall 16% yoy but also expect FY25 to fall another 5%, as our EBITDAR/ASK remains 10% above FY19 levels following 12% in 2H24.</li>
<li>While international markets continue to normalise, Qantas's domestic market structure positions it favourably to continue to invest in customer service and product.</li>
</ul>


With 1H24 results, Qantas followed Singapore Airlines in highlighting fare weakness in international markets and we cut our pre-tax income by 13% to FY24.
We expect FY24 pre-tax income to fall 16% yoy but also expect FY25 to fall another 5%, as our EBITDAR/ASK remains 10% above FY19 levels following 12% in 2H24.
While international markets continue to normalise, Qantas's domestic market structure positions it favourably to continue to invest in customer service and product.


Qantas – Two-Year Earnings Re-Set in Prospect

Qantas Airways

Qantas – Two-Year Earnings Re-Set in Prospect