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Aviation data to inform financial managers in 2020

Cirium’s Head of NBFI, Miran Bastajian, shares his expert view on deploying aviation data and analytics to inform investment decisions.

By Miran Bastajian

In 2019, the aviation industry was hit by 29 airline bankruptcies, including the collapse of high-profile names, including Thomas Cook Airlines and Jet Airways. In addition, the market is developing a watch list of potential airline failures in 2020. These failures and inadequate business models raised critical questions for decision makers in NBFIs; and while the level of impact will have varied, depending on the investment thesis or risk parameters, Cirium’s data is an additional and important layer in the investment decision making process.

What remains interesting are the different questions about the knock-on effects on airline schedules, aviation asset values, quarterly earnings and ABS returns. Investors seek early warning signals, as well as an understanding on what the potential benefits and opportunities might be and where challenges may lie. With so many factors in play, one thing is certain: it has never been more crucial to leverage the most reliable sources of aviation data and analytics to inform asset and portfolio management.

At Cirium, we have data to enable finance professionals to access the most relevant insights based upon how they invest in this sector.

I’m often told that it’s not sourcing data that is the challenge; rather the big questions that customers ask are, “So, what am I getting, how good is your data? Is the data derived or raw, scraped or sourced, time-stamped and regulatory compliant?”

Assuming these questions have been satisfactorily answered, the next questions include: “How far back does it go?” and “What is the ‘completeness’ and coverage?”

We’re proud to offer the world’s most comprehensive and trusted data, as well as being committed to ensuring we provide the insight and hard facts to establish trust and substantiate the benefits.

Our scope
Cirium data includes 99.6% of all scheduled passenger flight ASKs (available seat kilometers) from 900+ global airlines going back 20 years – with 11 months of forward looking data. Our process for data collection is precisely what makes it the most reliable and trusted. Our team of researchers validate and quality check all our data from curated sources to ensure our market leading position and our client’s success.

Finally, to successfully onboard data to drive insights, it is vital to make sure the ingested information is inter-operable with a wider range of existing information and delivered according to requirements. Cirium data can be viewed as an additional layer in your investment decision-making process, where a single company’s performance is dependent not only upon its own dynamic, but also on wider industry ripples.

Schedule time to view the schedule
A component of assessing airline winners and losers is through analyzing operator schedules. Static views from publicly available sources are not dynamic enough, and don’t provide the color and, more importantly, the context to deliver enough differentiation between a multitude of similar approaches. Schedule changes, market share, erosion of market share and new route entrants add more insight.

The global fleet is not static
A granular view showing individual aircraft history or the global fleet development are not always necessary (although available, along with aircraft values). However, matching schedules to aircraft capacity and then to load factor is insightful for reading into airline revenues and ESG and sustainability considerations

It‘s not only the airlines
Using our data also provides a window into Airframe and Engine OEM books of business. Utilization growth or reduction, order books, shrinking passenger demand or airline supply and the impacts of global economic, political or health-driven cancellations are all areas of business stress and opportunity.

To find out more about how Cirium’s multiple data sets can help you with your investment management needs, contact Miran@Cirium.com.

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