航空、運(yùn)輸與產(chǎn)業(yè)會(huì)議：航空租賃業(yè)要點(diǎn)

1、North America Corporate Research06 March 2019Airlines & Aircraft Leasing/EquityJamie BakerAC(1-212) 622-6713 HYPERLINK mailto:jamie.bakerjpmorgan jamie.bakerjpmorgan Bloomberg JPMA BAKER J.P. Morgan Securities LLCNishant Mani(1-212) 622-5707 HYPERLINK mailto:nishant.manijpmorgan nishant.manijpmorgan

2、 J.P. Morgan Securities LLCKaran Puri(91-22) 6157-3327 HYPERLINK mailto:karan.purijpmchase karan.purijpmchase J.P. Morgan India Private LimitedAirlines & Aircraft Leasing/CreditMark Streeter, CFA AC(1-212) 834-5086 HYPERLINK mailto:mark.streeterjpmorgan mark.streeterjpmorgan J.P. Morgan Securities L

3、LCIan B Snyder(1-212) 834-3798 HYPERLINK mailto:ian.b.snyderjpmorgan ian.b.snyderjpmorgan J.P. Morgan Securities LLCJ. P MorganAviation, Transportation & Industrials ConferenceAirlines and Aircraft Leasing TakeawaysWe hosted several Airline and Aircraft Leasing management teams for our annual J.P. M

4、organ Aviation, Transportation & Industrials on Tuesday March 5th and Wednesday March 6th. Brief takeaways are below, and we sincerely thank all of our clients (attending and virtual) for their participation.Delta. Ed Bastian (CEO), Glen Hauenstein (President), Paul Jacobson (CFO). Management reiter

5、ated its full year 2019 EPS target of $6 to $7 and now expects QI total revenue growth (not RASM) to emerge towards the top end of the 4-6% guidance range. The government shutdown, Easter shift into Q2, and some choppiness in leisure yields are generally offset by continued strength in corporate dem

6、and and yields. Delta remains bullish on the prospect of a Boeing NMA to replace 200 aging 757s and 767s and is working with Boeing on potential design and marketing efforts. Delta believes that the A220 will be the nicest domestic product in the skies“ and will help drive both unit revenue premiums

7、 while also maximize unit cost efficiencies.Southwest. Gary Kelly (Chairman & CEO) and Tammy Romo (CFO). Revenue and cost guidance for QI remains unchanged, with RASM still expected to be up 4-5% and ex-fuel CASM of 6%. The 2019 capacity framework of 5% was also reiterated, and management noted that

8、 about half of the growth is attributable to Hawaii service beginning imminently. Management noted that Hawaii is integral to solidify its California network given the popularity of Hawaii as a leisure destination, but the company is equally excited about the intra-island market where Southwest can

9、leverage its fleet and cost structure to bring down fares in the current monopoly markets operated by Hawaiian Airlines. Southwest cannot definitively rule out modifications to its product, including partial-assigned seating and extra leg-room. ItsEquity Ratings and Price TargetsCompanyTickerMkt Cap

10、($ mn)Price CCYPriceRatingCurPrice Ta getCurPrevEnd DatePrevEndDateDelta Air Lines, Inc.DAL US33,951.93USD49.71OWn/c62.00Dec-19n/cn/cSouthwest Airlines Co.LUVUS30,403.38USD53.06uwn/c52.00Dec-19n/cn/cUnited Continental Holdings, Inc.UAL US23,334.11USD84.33OWn/c101.00Dec-19n/cn/cWestJet AirlinesWJACN1

11、,778.33CAD20.78Nn/c21.50Dec-19n/cn/cAmerican AirlinesAAL US15,255.01USD32.76OWn/c43.00Dec-19n/cn/cSpirit AirlinesSAVE US3,647.21USD53.30OWn/c78.00Dec-19n/cn/cAlaska Air Group, Inc.ALKUS6,917.69USD55.83Nn/c71.00Dec-19n/cn/cJetBlue Airways Corp.JBLU US5,153.42USD16.42Nn/c19.00Dec-19n/cn/cAir CanadaAC

12、CN6,682.88CAD32.74OWn/c40.00Dec-19n/cn/cAir Lease Corp.AL US3,950.94USD35.56OWn/c54.00Dec-19n/cn/cAircastle LimitedAYR US1,481.23USD19.05Nn/c23.00Dec-19n/cn/cSource: Company data, Bloomberg, J.P. Morgan estimates, n/c = no change. All prices as of 06 Mar 19.See page 37 for analyst certification and

13、important disclosures, including non-US analyst disclosures.J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors shoul

14、d consider this report as only a single factor in making their investment decision. HYPERLINK :/ jpmorganmarkets jpmorganmarkets WestJet AirlinesNeutralWestJet Airlines Ltd. (WJA.TO;WJA CN)Company DataYear-end Dec (C$)FY17AFY18AFY19EFY20EFY21EShares O/S (mn)114Revenue (C$ mn)4,5074,7335,1805,601-52-

15、week range (C$)25.91-16.71Adj. EBITDAR (C$ mn)836585780927-Market cap (C$ mn)2,374.07EBITDAR Margin18.5%12.4%15.1%16.6%-Market cap ($ mn)1,778.33Adj. net income (C$ mn)27991206277-Exchange rate1.33Adj. EPS (C$)2.380.801.802.43-Free float(%)98.9%BBG EPS (C$)2.440.681.702.192.763M - Avg daily vol (mn)

16、0.66Reported EPS (C$)2.380.801.802.43-3M - Avg daily val ($9.6DPS (C$)-mn)Dividend yield-Volatility (90 Day)35Adj. P/E8.726.011.68.6-IndexSource: Company data, Bloomberg, J.P. Morgan estimates.RUSSELL2000BBG BUY舊OLDISELL2|1114Investment Thesis, Valuation and RisksWestJet Airlines Ltd. (Neutral; Pric

17、e Target: C$21.50)Investment ThesisWestJet has an established track record of operational success and profitability, emerging from an upstart carrier in 1996, to the second largest airline in Canada at present. Along the way, the company started off as mainly a Western Canada/Alberta airline, then e

18、xpanding to other parts of Canada, then developing a transborder business to service the U.S., and eventually growing its own regional subsidiary and using 767s for long-haul international service. The point is that along the way, WestJet has won over its critics over the long run with steady growth

19、 and execution. Looking ahead, the WestJet of today is once again embarking on a set of ambitious new initiatives - launching an in-house ULCC called Swoop, winning a growing share of premium travelers with product improvements and the delivery of 737MAX aircraft, and developing a dedicated lie-flat

20、 premium cabin for the first time while taking delivery of a fleet of 787 aircraft for long-haul network growth. The opportunity to drive additional revenue touchpoints, stimulate demand among customers and markets that were previously underserved, and defensively protect its market share against up

21、start airlines are all compelling, in our view. The companys track record of execution and consistency amid change is remarkable, but we believe that todays challenges are uniquely difficult. In addition to the strategic shifts for the company, the new CEO Ed Sims has the added task of having to que

22、ll a particularly hostile negotiation with its pilot union in the creation of its first contract. While the outcome of a pilot contract is now subject to binding arbitration, the overhang related to cost uncertainty for labor gives us pause - particularly as flight attendants and dispatchers also mo

23、ve towards union contracts. However, we do share managements optimism that a final contract will emerge from arbitration by year-end. Additionally, the competitive environment in Canada has heightened and the costs associated with launching Swoop and refreshing the WestJet product have emerged highe

24、r than previously expected. Airline investors often gravitate towards simplicity amid an already cyclical and volatile sector. Accordingly, while we view the new frontier for WestJefs growth as potentially compelling, we believe that WestJet shares are unlikely to price in the upside until there9s m

25、eaningful progress made on labor, the10companys cost profile, and the competitive pricing environment. In other words, we (and investors, we believe) liked what we heard out of the Investor Day - a strong unit revenue trajectory backed by idiosyncratic levers like enhanced segmentation/ancillary rev

26、enue as well as the 737/787 premium offerings, a focus on cost discipline to drive margins higher, and a management team that is hitting its stride. However, we also believe this is still a show me story before investor confidence can be won more widely. Accordingly, we rate WJA shares Neutral.Valua

27、tionOur Dec 2019 price target for WJA shares is C$21.50 and is derived by using a weighted average of two different methodologies, a target P/E multiple (75%) and a target EBITDAR multiple (25%). Our experience in the U.S. airline sector leads us to conclude that most investors gravitate towards P/E

28、 based valuations for ease in comparability and comprehensiveness. We are utilizing an 8.5x multiple on our 2020 EPS estimate and a 4.0 x multiple on our 2020 EBITDAR estimate. For context, WestJet shares currently trade at 3.8x our 2020 EBITDAR estimate and 8.7x our 2020 EPS estimate. Given heighte

29、ned execution risk on account of several strategic initiatives, we assume some modest multiple contraction from current valuation levels.Risks to Rating and Price TargetTo the upside: The company reaches a swift agreement with its pilot union and the arbitrated outcome is not as economically impactf

30、ul as currently estimated; the flat to 2% ex-fuel CASM target for 2019 is achieved without excess capacity growth; Swoops growth could stunt the competitiveness of upstart ULCCs like Flair Air; the enhanced Plus offering on WestJets 737MAX and 737-800 aircraft could drive a more accelerated conversi

31、on of high value travelers from competitors; the re-tooling of WestJets loyalty program could attract more passengers as Aeroplan undergoes changes; the 787 launch could potentially disrupt the lie-flat premium cabin segment just like JetBlues Mint did in the U.S.; the newly assembled management tea

32、m, led by CEO Ed Sims, could better respond to any setbacks and challenges as the company undergoes a variety of changes.To the downside: The pilot contract results in excessive labor cost inflation; Swoops presence could result in WestJet customers trading down to Swoop and thereby undercutting the

33、 companys overall revenue prospects; high value travelers are often stickier than price sensitive customers and WestJefs product, fleet, and loyalty investments may not be recouped; the success of the 787 strategy is underpinned by route selection and revenue management, and the margin of error is s

34、maller than on domestic flights; the management team may have a difficult time staying focused when there are so many changes to the business occurring at once, increasing the potential for operational issues; Air Canadas acquisition of Aeroplan could further enhance the value proposition of flying

35、Air Canada and staying inside its own loyalty ecosystem.11American AirlinesOverweightNew American Group (AAL;AAL US)Company DataYear-end Dec ($)FY17AFY18AFY19EFY20EFY21EShares O/S (mn)466Revenue ($ mn)42,62344,54146,69448,425-52-week range ($)57.44-28.81Adj. EBITDAR ($ mn)7,8656,5547,6997,553-Market

36、 cap ($ mn)15,255.01EBITDAR Margin18.5%14.7%16.5%15.6%-Market cap ($ mn)15,255.01Adj. net income ($ mn)2,5922,1182,9332,833-Exchange rate1.00Adj. EPS ($)5.274.556.516.54-Free float(%)89.0%BBG EPS ($)4.894.516.086.376.753M - Avg daily vol (mn)8.52Reported EPS ($)5.274.556.516.54-3M - Avg daily val ($

37、288.2DPS ($)-mn)Dividend yield-Volatility (90 Day)49Adj. P/E5.0-Source: Company data, Bloomberg, J.P. Morgan estimates.S&P 500141810IndexBBG BUYIHOLDISELLInvestment Thesis, Valuation and RisksNew American Group (Overweight; Price Target: $43.00)Investment ThesisDespite the industrys revenue

38、 momentum in 2018, American shares have been a noteworthy laggard, the worst performing stock at -38% in 2018. Fundamentally, we believe Americans 2019 capacity growth plan of 3% endorses a pattern of capacity restraint that we believe will help set 2018 results as a margin support level. But we ack

39、nowledge investor frustration with American - while Delta delivers industryleading margins and new revenue initiatives, and while Uniteds turnaround plan appears to be working and winning over investors5 confidence - Americans revenue story has been third-best and its Basic Economy execution hit-or-

40、miss. The primary rationale we see for owning AAL shares is the valuation dislocation relative to peers. Despite projected margin deficiency on a relative basis to United and Delta, we dont believe American shares should trade at a nearly 2.5x discount to United on our 2019 estimates (and a 2.0 x di

41、scount to Delta). Indeed, American shares recently triggered our proprietary Down 3() in 3() rule, and we believe sentiment is bottoming out. We do not necessarily believe the companys balance sheet strategy is prudent in what feels like a late-cycle environment, but we do not envision any liquidity

42、/solvency concerns despite some investor concerns. In other words, at this valuation level, we believe investors are more than compensated for lower margins and a riskier balance sheet. Accordingly, we rate American shares Overweight.ValuationOur AAL Dec 2019 price target is $43,00, predicated on ou

43、r company-specific forward P/E multiple assumption. We are applying a 6.5x P/E multiple to our 2020 estimates to arrive at our price target. For context, we assume higher multiples at both Delta and United (8.Ox for both) to reflect Americans enhanced balance sheet risk and lower projected margin pr

44、ofile. AAL shares have experienced a 2.5x P/E valuation contraction since the autumn 2018 peak when measured on a consensus 2019 basis, and we believe this is a function of investor concern on Americans leverage as well as slowing industry revenue momentum on account of cheaper fuel.12Risks to Ratin

45、g and Price TargetTo the downside: if jet fuel prices rapidly move higher and American is unable to recoup higher input costs through stronger fares; if Uniteds growth plans in Chicago erode Americans profitability in its hub; if the Latin American region, where American has outsized exposure, suffe

46、rs fiom further macroeconomic headwinds.13Spirit AirlinesOverweightSpirit Airlines Inc (SAVE;SAVE US)Company DataYear-end Dec ($)FY17AFY18AFY19EFY20EFY21EShares O/S (mn)68Revenue ($ mn)2,6443,3233,9334,573-52-week range ($)65.35-34.36Adj. EBITDAR ($ mn)7488041,0481,204-Market cap ($ mn)3,647.21EBITD

47、AR Margin28.3%24.2%26.6%26.3%-Market cap ($ mn)3,647.21Adj. net income ($ mn)226301482527-Exchange rate1.00Adj. EPS ($)3.254.407.087.85-Free float(%)99.2%BBG EPS ($)3.304.396.557.017.513M - Avg daily vol (mn)1.22Reported EPS ($)3.254.407.087.85-3M - Avg daily val ($72.2DPS ($)-mn)Dividend yield-Vola

48、tility (90 Day)51Adj. P/E16.4-IndexSource: Company data, Bloomberg, J.P. Morgan estimates.BBG BUY舊OLDISELLRUSSELL2000141410Investment Thesis, Valuation and RisksSpirit Airlines Inc (Overweight; Price Target: $78.00)Investment ThesisSpirifs business model entered a maturation phase in 2018,

49、 with a new pilot contract, more disciplined growth, and better commercial execution related to market selection and yield management. We believe that 15% ASM growth in 2019-20 will help Spirit generate an even stronger unit revenue trajectory, particularly as Spirit has increased the number of mark

50、ets where it has at least 20 daily departures and therefore enhanced density. While we believed that Basic Economy would serve as a significant earnings headwind for Spirit, the company has deftly tweaked its business model to reduce exposure to the most competitive markets. Indeed, Spirits recent i

51、nvestor disclosure highlighting ancillary revenue momentum and success in bolstered yield management efforts has demonstrated to us that Spirifs business model is reinvigorated. We believe Spirit can continue to build on this momentum in 2019-20 with continued ancillary revenue growth, a more balanc

52、ed network, and a more benign competitive environment - the latter even when fuel prices continue to shaiply trend lower. Valuation multiples could also expand in this environment given the companys idiosyncratic revenue initiatives. We rate SAVE shares Overweight and believe that, despite recent re

53、lative strength in SAVE shares, the stock has significant risk-adjusted upside potential.ValuationOur Dec 2019 price target for SAVE shares is $78.00 and is predicated on our company-specific forward P/E multiple assumptions. We are applying a lOx P/E multiple to our 2020 estimates to arnve at our p

54、rice target for Spirit. For context, this is the highest target multiple for any of the airlines we cover, due in part to its faster- than-industry growth rate, idiosyncratic revenue initiatives, upward projected margin trajectory, and unique ability to stimulate demand growth. By comparison, we uti

55、lize a 8.5x target multiple for JetBlue, and 9.5x for both Southwest and Alaska. SAVE shares have experienced a 3.5x P/E valuation compression measured on consensus 2019 estimates since its autumn 2018 peak - mostly a result of industry-wide fears on cheaper fuel driving slower revenue momentum.14Ri

56、sks to Rating and Price TargetTo the downside: 1) If Spirit engages in an accelerated capacity growth strategy, we believe that sentiment on SAVE shares will worsen; 2) Should Spirit target growth in legacy airline hubs, we believe the competitive response would result in a lower unit revenue trajec

57、tory for the company; 3) Spirifs customer base is more price conscious than at other airlines, and should macroeconomic factors reduce consumers discretionary spending power, demand for air travel on Spirit may worsen.15Alaska Air Group, Inc.Neutral Alaska Air Group, Inc. (ALK;ALK US)2000 Source: Co

58、mpany data, Bloomberg, J.P. Morgan estimates.Company Data Year-end Dec ($)FY17AFY18AFY19E(Prev)FY19E(Curr)FY20EFY21EShares O/S (mn)12452-week range ($)74.83-55.83Revenue ($ mn)7,8948,2648,7348,6979,319-Market cap ($ mn)6,917.69Adj. EBITDAR ($ mn)1,9631,5101,9241,8872,039-Market cap ($ mn)6,917.69EBI

59、TDAR Margin24.9%18.3%22.0%21.7%21.9%-Exchange rate1.00Adj. net income ($ mn)791554853825913-Free float(%)99.5%Adj. EPS ($)6.374.476.936.717.50-3M - Avg daily vol (mn)1.65BBG EPS ($)6.624.40-6.667.408.003M - Avg daily val ($103.9Reported EPS ($)6.374.476.936.717.50-mn)DPS ($)1.201.281.281.280.00-Vola

60、tility (90 Day)34Dividend yield2.1%2.3%2.3%2.3%0.0%-IndexRUSSELLAdj. P/E8.87.4-BBG BUYIHOLDISELL11 0Investment Thesis, Valuation and RisksAlaska Air Group, Inc. (Neutral; Price Target: $71.00)Investment ThesisThe Alaska management team, prior to the Virgin America acquisition, had a deep t