A bumpy ride ahead

Cash and working capital insights into the airline sector

Global airline carriers are heading for a bumpy ride, fuelled by excess capacity and rising costs. This is jeopardising profits, eroding equity and increasing the risk of insolvency.

Now more than ever, airlines need to keep a close eye on their funding sources, aiming to deleverage either through raising fresh shareholder capital or through embarking on cash and working capital optimisation initiatives.

This report explores the following working capital trends within the sector, from both a geographic and carrier perspective:

  • Days Sales Outstanding (DSO)
  • EBITDA margin
  • Leverage
  • Liquidity index
  • Cash conversion efficiency (CCE)
  • Capital expenditure.

Together these trends show that the airline sector is under pressure, particularly on liquidity and leverage. Improving cash flows therefore becomes paramount in order to sustain future growth.

A bumpy ride ahead: Cash & working capital insights into the airline sector
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