On October 27, 2020, Visible Alpha’s Research and Innovation Lab hosted a webinar with Andrew Lobbenberg, HSBC’s European Equity Research Sector Head of Transport, to discuss the dramatic impact of Covid-19 on airlines this year and the industry’s rocky recovery trajectory.
Forecasting the Global Impact of Covid-19 on the Airlines Industry
By: Visible Alpha
The global impact of Covid-19 on the travel industry (and across all sectors) has been quite significant, especially as consumers and businesses are still wary of travel risks. Airlines in particular continue to encounter headwinds and the road to recovery is expected to be long and rocky.
Analysts See Long Route To Recovery For European Airport Operators
By: Visible Alpha Research & Innovation Lab
The novel coronavirus pandemic was timed poorly for major European airport operators (Aena, Fraport and Aéroports de Paris) that were already facing headwinds from regulators seeking to decrease the landing fees they charge airlines after years of strong tourism growth and high returns.
The world-wide lockdown brought most international traffic to a virtual standstill, and over 180 countries are still either completely or partially closed to travelers. Aena, Fraport and Aéroports de Paris now risk increasing pressure from regulators aiming to help struggling airlines, many of which received government assistance, such as Lufthansa, who accepted a $10B bailout from the German government in exchange for a 20% equity stake. Lufthansa is expected to seek lower landing fees from Fraport, the owner of the Frankfurt Airport where Lufthansa’s main hub is located. In addition to tariff risk, reduced air traffic and lower consumer spending are causing the retail, hotel and concession businesses to also seek rent negotiations with the airports.
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Major U.S. Airlines Are Not Expected To Recover From Covid Until 2022 At The Earliest
By: Visible Alpha Research & Innovation Lab
Wall Street analysts believe the four largest U.S. airlines – Delta (DAL), United (UAL), American (AAL) and Southwest (LUV) – will lose 50-60% of their revenue from Covid-19 as they struggle with unfathomable demand shock and restricted travel conditions. Many analysts also point out the risk of a structural change to corporate travel going forward as companies reevaluate their return on travel expenses since many businesses have adapted well to working remotely. Read more
COVID-19 Analyst Revisions Ahead of Earnings Season
By: Visible Alpha Research & Innovation Lab
Earnings season is here, and companies are expected to update full-year guidance to reflect the impact of the COVID-19 crisis. As events have unfolded since the start of the year some analysts have made revisions to their estimates accordingly.
Weekly Roundup – July 18
By: Visible Alpha
Intel (INTC): Investors Focused on Data Center Outlook
Intel’s Data Center Group (DCG) is a major focus for investors as it has historically posted strong, double-digit revenue growth and has largely offset flat to negative growth in its Client Computing Group (CCG) segment. The DCG segment also has higher operating margins, which further bolsters overall earnings for the company. Read more…
Navistar: Investors Not Sold on Full Year Adj. EBITDA Guidance
By: Visible Alpha
When Navistar reported 2Q17 results, investors were surprised at the company’s guidance. Navistar had just reported 2Q results that were well-below expectations. Adjusted EBITDA came in at $65 million, well-below the consensus of $130M. The company had also missed adj. EBITDA consensus estimates in 1Q. However, management maintained their guidance of full-year adj. EBITDA to be above the $508M reported in 2016. This implies 2H adj. EBITDA of at least $388M, which would be over 3x what they just reported in 1H17.
