AIR - Air NZ.

[tommy_d]

there might be a lot of people getting caught up in the hype and doing things they don't really understand.

i resemble that accusation
fun time to jump in eh...
"i'm gonna be a day-trader", right?

obviously i've just opened a sharesies account. Fun times.

[justakiwi]

Some will understand that. Some will not. We all learn from the decisions we make along the way.

My own daughter bought some AIR. Yes, I did explain to her the risks of doing so, but she is an adult, earning her own money, who can make her own decisions. She didn’t buy many and only spent an amount she was prepared to lose. She is a total beginner, but she’s a smart girl. She understands that buying AIR was a calculated risk “lottery ticket” gamble. She has no intention of buying any more, and considers them a long term “let’s see what happens” purchase.

And who knows? None of us know how this will pan out. Not really. In 10-20 years the rest of us might be kicking ourselves.

I just hope people know the risk they are taking buying Air NZ at these levels (and i picked Air NZ in the 2020 competition before this all happened). Unless a miracle happens, shares are almost certain to be worth close to zero given government restrictions, demand collapse, fixed costs, haemorrhaging cash position and the likelihood the $900 m government loan will have to be converted to equity at knock down price.

[Beagle]

I just hope people know the risk they are taking buying Air NZ at these levels (and i picked Air NZ in the 2020 competition before this all happened). Unless a miracle happens, shares are almost certain to be worth close to zero given government restrictions, demand collapse, fixed costs, haemorrhaging cash position and the likelihood the $900 m government loan will have to be converted to equity at knock down price.

The mind truly boggles as to what on earth they will do with their billions of dollars of 777's and Dreamliners just sitting there eating their heads off with depreciation, maintenance and funding costs ? They won't even be able to keep their fleet of A320, A321, ATR's and Q300's anywhere near busy. It took 3 years for demand to come back from 9/11, a one-off event that killed a few thousand people. One wonders how long (if ever?) before things return to normal for international travel this time ?

I can't see any other outcome than them burning at the very least the total $2b in equity that was on their balance sheet as at 31 December 2019 before this company is profitable again, probably considerably more. They'll be burning through at least $270m a month in cash at present, ($320m a month total loss including depreciation). It only takes 6 months of that and all the equity is gone ! They're not coming back in any big way within 6 months, its simply not possible. Even if domestic comes back to 40-50% of normal later this year that's only going to slow that burn rate down a little. Until there's a vaccine that's widely available the size of the daily cash bonfire at AIR is truly confronting.

[stoploss]

Interesting the large shareholders who hold 90% don’t sound like they are going to step up to the plate...
Crushed under $5 billion of debt, Virgin Australia waits to see if the government will bail it out.
https://www.stuff.co.nz/business/wor...s?cid=app-iPad

[Cyclical]

Read my post above.

They are just starting out for goodness sake. Not everyone has huge buckets of money to invest. Some of us have to start with small regular amounts, and Sharesies allows us to do that. Most of us couldn’t do it if we were investing via a traditional broker and paying their fees.

Why do so many of you feel the need to constantly rain on someone else’s parade?

if you, and others here, have joined the Facebook group just to have a laugh at our expense, go get your kicks somewhere else

Yep, well it's fair to say the FB group is pretty low rent haha. But hey, I agree with what you are saying about ST being intimidating for the novice and it's great that starters these days have things like Sharesies and the FB group to get a leg up. I joined up their myself a couple of weeks ago, and while ST is the place I come to learn, I have added the odd helpful (hopefully) post over there on FB.

While I'm no expert, I've been busy losing money on and off since about '86 and have learnt plenty along the way. If I can impart some of that knowledge on today's noobs just starting out, then that's great.

I do worry that a lot of them are about get horribly burnt and put off for life though, just like '87.

[Cyclical]

Interesting the large shareholders who hold 90% don’t sound like they are going to step up to the plate...
Crushed under $5 billion of debt, Virgin Australia waits to see if the government will bail it out.
https://www.stuff.co.nz/business/wor...s?cid=app-iPad

Will be interesting to see what the Aussie government does here. One would assume they will let it fall. They can't even make a profit during boom times, so why have the tax payer keep it going just to add some price competition to the other what will be national airline?

[mp52]

The mind truly boggles as to what on earth they will do with their billions of dollars of 777's and Dreamliners just sitting there eating their heads off with depreciation, maintenance and funding costs ? They won't even be able to keep their fleet of A320, A321, ATR's and Q300's anywhere near busy.

It'd be interesting to look at a breakdown on demand/supply on 777s and Dreamliners pre-Covid - lease and orders actual and planned. Thinking being, if there is a shortage in supply of these fuel efficient and relatively low maintenance long distance airliners, there may be a market in AirNZ leasing a portion of its fleet to another airline on a no-compete basis? One way for an airline to generate revenue and quickly build code-share routes in the post-covid environment?

[mp52]

Fuel efficiency unfortunately less impactful with super low oil prices. I would think all passenger airliners have a surplus of aircraft so a little hard to fathom where lease demand would come from.

Yes indeed. Perhaps viable if an airline is already committed to retiring aged aircraft from their fleet and decides to cancel back-orders for new aircraft in favour of leasing? The glut of airlines likely looking to offload though would make it a buyers market.

These numbers make interesting reading:
https://en.wikipedia.org/wiki/List_o..._type_and_year

Some huge delivered and on-order numbers for Emirates on 777-300s pre-Covid for example.

[Beagle]

You make a good point. There does not appear to be a future worth saving given persistent failure to achieve profitability during the boom years. You can see why the big shareholders don’t want to throw good money after bad into this bottomless pit. Have to give it to Luxon, prescient to extract Air NZ from Virgin shareholding a year or two ago.

Yes, well done to Luxon and to the board for their decision to pay out the full 25 cents per share received from the sale of their stake in that zombie airline. That was his single best decision while at AIR.

[thedrunkfish]

Are you guys watching the share price this morning? This is crazy