Gol, Aeromexico Liquidity Seen ‘Weak’ as Demand Falls: Lucror

(Bloomberg) -- Grupo Aeromexico and Gol Linhas Aereas Inteligentes liquidity positions are weaker than those of Latam Airlines Group and Azul, a Lucror Analytics analysis of four regional Latin American airlines found.

►Amid cuts in capacity, base- case scenario assumes ~30% decline in Ebitda for full year, while stress-case scenario would see ~50% drop in Ebitda

►Aeromexico’s cash position at the end of 2019 covered only 0.6x of short-term debt

•“Under our base and stress-case scenarios, leverage would increase to 6.0x and 9.9x, respectively, erasing Aeromexico’s deleveraging efforts”

►Gol’s liquidity is weak with 3 billion reais in cash and marketable securities, which was less than short-term debt of 3.9 billion reais”

•“The company is exposed to FX risk, given that 15% of revenues are in USD while its debt is 90% USD denominated”

►Latam has adequate liquidity taking into account available revolving credit facility and its historical access to capital markets, bank lending: report

►Azul has adequate liquidity and is the least exposed to FX risk among major Latin American airlines

•“100% of its working capital funding was in BRL and that most of its USD- denominated debt (c. 45.5% of total debt, excluding operating lease liabilities) was composed by its USD 400 mn unsecured bonds, which were hedged at BRL/USD 4.75”

Source: BFW (Bloomberg First Word)