Airlines Sector Primer
A 41-page primer plus Excel valuation model on airline stocks: RASM and CASM, EBITDAR and lease-adjusted debt, fuel, load factor and the downturn test.
PDF Only
The full primer in PDF format
£25 / ~$32- ✓ 41-page sector primer
- ✓ Worked valuations
- ✓ Screening thresholds
Excel Model
Plug-and-play valuation template
£45 / ~$58- ✓ Pre-built valuation model
- ✓ Sensitivity tables
- ✓ Scenario toggles
PDF + Model
Everything you need in one package
- ✓ 41-page sector primer
- ✓ Valuation model (.xlsx)
- ✓ Save £11 vs buying separately
Three primers, three Excel models
Shipping, Airlines, and Railroads. Everything at ~25% off
Inside the primer
The 15-section contents, a worked valuation page, and the Excel dashboard.
Table of Contents
- 01 How Airlines Make Money
- 02 Listed Airline Types
- 03 The Capacity and Fleet Cycle
- 04 Segments and Sub-Markets
- 05 Revenue Drivers: Building Revenue from ASMs
- 06 Cost Structure: CASM Vocabulary
- 07 Valuation Frameworks
- 08 Worked Example: EV/EBITDAR Valuation
- 09 Applied Cases: US Unit Economics
- 10 Applied Cases: Fuel and Balance Sheet
- 11 Applied Cases: European Models
- 12 The Companies in This Primer
- 13 Key Metrics and Screening
- 14 Risks, Benchmarks and Case Study
- 15 Glossary and Cheat Sheet
41 pages · 15 sections · 2 worked examples
The Excel model
Educational material for professional use. This primer and its model are not investment advice or a recommendation to buy or sell any security, and they are not personalised. Worked valuations use illustrative calibrations, not fair-value estimates for any company.
An airline sells seats at a few cents per mile more than it costs to fly them, across hundreds of billions of seat miles. The margin is thin and the fleet is often leased, so the right measure of earnings is before rent, and the right measure of debt includes the leases. That pairing, EBITDAR against lease-adjusted debt, is how the sector is valued, and getting it half right is how a model counts the rent twice.
The primer builds the tools in order: how airlines make money, the listed airline types, the capacity and fleet cycle, then the revenue build from seat miles and the cost side in the unit-cost vocabulary. Two worked examples run from first input to value, a premium network carrier and a low-cost carrier, before applied cases on US unit economics, fuel and balance sheets, and the European models. Screening closes with unit margin, load factor, lease-adjusted leverage and free cash flow through the capex cycle.
Free guides on the site cover the individual pieces, so you can revise one idea without reopening the PDF: RASM and CASM, airline CASM by carrier, load factor, fuel costs and hedging, EBITDAR and leverage, EBITDA vs EBITDAR and free cash flow and the capex cycle. Research profiles for Delta, United, American, Southwest, Ryanair and IAG run the same screens on filed results. The companion Excel model spans eleven sheets, from the two carrier builds through unit economics, the downturn and the lease-adjusted leverage screen to a live sensitivity grid, so entering your own carrier rebuilds the valuation from its seat miles up.
Sheets: Quick Start, Instructions, Assumptions, Premium Network, Low-Cost Carrier, Valuation Summary, Unit Economics, Downturn Scenario, Lease-Adjusted Leverage, Sensitivity, Dashboard.
See this methodology applied to a real company:
Delta Air Lines (DAL) →