瑞信-美股-航空业-美国航空业：Covid-19的最新预期影响估计的修正-2020.5.8.pdf

8 May 2020 Equity Research Americas | United States U.S. Airlines Revising estimates for the latest expected impact of Covid-19 Airlines | Sector Review Forecasting a ~60% decline in industry revenues this year and a multi-year Research Analysts recovery: We are revising our estimates across our airlines coverage to reflect the latest expected impact of Covid- 19. Our base case reflects a ~60% decline in total revenue for Jose Caiado the industry this year and a net loss of ~$32B. Q2 will mark the bottom with revenues 212 325 6771 down ~94%, improving to -72% in Q3 and -47% in Q4. We expect that it will take ~3 jose.caiado@credit - years to fully recover to pre-crisis levels, and our 2022 revenue forecasts are still ~10% below 2019 levels. The recovery will be gradual, and the conditions are much the same as those cited for a phased reopening of society – higher testing capacity, therapeutics, and ultimately (hopefully) a vaccine. The latter may be the final gating factor for demand to truly return to pre-crisis levels, but revenues should begin to recover sooner as we adapt to a modified air travel experience in the medium-term as the country begins to re-open. Gov’t assistance & recent capital raises allay liquidity concerns for now, but heavily burden balance sheets: We believe industry has adequate liquidity to bridge through to an eventual demand recovery, which we expect towards the end of 2020. However, balance sheets are now heavily burdened with incremental leverage, and debt reduction will become industry’s primary strategic objective as it emerges from the crisis. Layoffs are inevitable in the fall, barring any short-term labor deals: Airlines agreed not to lay off employees thru Sep