AIR - Air NZ.

[dobby41]

How is that ethical or not a breech of the Fair Trading Act ? How can they cancel bookings (just because it suits them to do so) when the flight for which the customer has already paid is actually occurring ? This is not only morally bankrupt, its unethical and will surely be in breech of the Fair Trading Act as it amounts to a gross abuse of power. Couta is faced with paying three times the price, ( to avail himself of his non refundable hotel booking) or not going.

If this is the moral compass this company is now operating with I am ashamed to have ever been a shareholder. This sort of behaviour makes me wonder if they could very easily do a reset of people's airpoints under the auspices of force majeure or calling Covid 19 an event beyond our control which has profoundly affected us ?
It isn't ethical. It is very cynical and someone needs to challange it under some Act.
I went along with getting credits for my flights which were cancelled but this, IMHO, is going a bit far!

There is a need to make a return for the shareholder and survive, but at any cost?

[RTM]

It isn't ethical. It is very cynical and someone needs to challange it under some Act.
I went along with getting credits for my flights which were cancelled but this, IMHO, is going a bit far!

There is a need to make a return for the shareholder and survive, but at any cost?

Agree....it doesn't seem right at all. Someone needs to read the fine print really carefully to determine if they can legally do this.
However....I presume AIR NZ has already done so.

[Cyclical]

It certainly makes the case for getting a full refund for flights that were booked a while ago, knowing there's a good chance you're unlikely to be able to get equivalent flights for the same money going forward.

[Raz]

Lets face it, financially they cannot afford to refund prepaid tickets, they only do it where legally they have to... let alone honour Airpoints balances.

The only way to reduce the Airpoints balances, unless they take on the PR risk of cancelling the program, is to increase airfares which reduce the actual value although not the dollar liability.

I suspect a lot of people anticipated this like me and have used Airpoints for all their future flights, this requires you pay the tax element on flights. Doing this with the view we demand refunds for tax element if they cancel as they are not the "fare" under T & C which they are crediting back.

[Beagle]

The general risk associated with something happening to AirPoints balances has got me wondering whether it would be an opportune time to spend them all at Mitre 10 - if I 'need' to spend the cash their anyway, it seems like a safer option to fund DIY purchases with AP and simply then use the money that I would otherwise have spent at Mitre 10 to fund any future flights - nothing lost in that regard, but value protected.

I've used half this way already and will expend the rest shortly in the same manner. Makes profound common sense.


It isn't ethical. It is very cynical and someone needs to challange it under some Act.
I went along with getting credits for my flights which were cancelled but this, IMHO, is going a bit far!

There is a need to make a return for the shareholder and survive, but at any cost?

It would seem that the goodwill of the travelling public is being sorely tested and they feel under some fine print clause in their flight service agreement they're entitled to do this and that may well be the case but its morally and ethically repugnant and its seems desperate times makes management think they have a licence to take desperate measures ?
Airpoints members could be forgiven for wondering what other desperate measures might be forthcoming ?

[Brain]

The general risk associated with something happening to AirPoints balances has got me wondering whether it would be an opportune time to spend them all at Mitre 10 - if I 'need' to spend the cash their anyway, it seems like a safer option to fund DIY purchases with AP and simply then use the money that I would otherwise have spent at Mitre 10 to fund any future flights - nothing lost in that regard, but value protected.

Interestingly enough they will not convert Airpoints to Mitre10 gift cards while we are in level 3 or 4. The reason given is that they can only be spent in store. I would be only happy to receive my gift cards and wait until the stores open but not given this choice. My view is that already they are being a bit tricky.

[RTM]

OK....I'm out. Ouch. Loss of ~$25K. Made slightly ok by dividends over the years and a small gain on a sale a while ago totalling 19K,
Doesn't really make me feel any better.
Good luck holders.

[samjaynz]

Noticed that too.

I had purchased a couple of gift cards for my parents before the lockdown so they could work on their house.

I also bought a couple of appliances, and now after about 7 weeks I hear that both orders can't be fulfilled and they will give me the airpoints back (this was on Friday - they said 24hrs but still no sight of the missing APD).

Was going to buy myself some Mitre 10 gift cards instead so I could paint the fence, do up my home office etc but they won't sell them.

[Beagle]

Interestingly enough they will not convert Airpoints to Mitre10 gift cards while we are in level 3 or 4. The reason given is that they can only be spent in store. I would be only happy to receive my gift cards and wait until the stores open but not given this choice. My view is that already they are being a bit tricky.

Yes I formed that view too. Most disingenuous to not issue gift cards which I understand had a very generous date to expiry of 5 years with the so called reason that they are not allowed to issue these as they can't be spent instore under level 4 and then 3 protocol. They are treating customers as though they are toddlers with this sort of extremely dubious conduct. The way this is going it will be state owned shortly and Shane Jones will be dictating terms for all regional matters :eek2:

[Cyclical]

So if and when they cancel all Airpoints, do you think they'll cancel my debt if I dip into the 200 Airpoint credit balance? He asks, while sipping a Tui. I'm planning to spend all my balance and dip a little into that credit as soon as I can get into Mitre10...then at least I'm not accumulating a positive balance from credit card expenditure that I may never be able to redeem.

[Leftfield]

Is this the same as what is playing out with MET ? If yes..would the interpretation that AIR arrive at carry weight for MET ?

The answer is likely to be NO - but don't take my word for it. Read this article (https://rapercapital.com/2020/05/06/metlifecare-heads-i-win-big-tails-i-dont-lose-or-better/) posted on the MET thread Johnnythehorse. Heads MET win. Tails MET unlikely to lose.

[Cyclical]

The way this is going it will be state owned shortly and Shane Jones will be dictating terms for all regional matters :eek2:

It will be a close run race to see if AIR can survive until the election. If they do, and NZ's love affair with Labour continues, I doubt Shane will be around to have a hand in it.

[Beagle]

It will be a close run race to see if AIR can survive until the election. If they do, and NZ's love affair with Labour continues, I doubt Shane will be around to have a hand in it.

My money is on AIR squealing for more cash LONG before the election. Could even be more badly needed loan "support", (if you can call it that considering the interest rate on the current loan), included in this weeks budget.

[RupertBear]

The general risk associated with something happening to AirPoints balances has got me wondering whether it would be an opportune time to spend them all at Mitre 10 - if I 'need' to spend the cash their anyway, it seems like a safer option to fund DIY purchases with AP and simply then use the money that I would otherwise have spent at Mitre 10 to fund any future flights - nothing lost in that regard, but value protected.

I intend to use up as many of my AP at Mitre 10 as I can. I understand you can buy items at Mitre 10 using your AirPoints reward card with a photo ID without needing any vouchers. Or so their website says......

[Sideshow Bob]

I intend to use up as many of my AP at Mitre 10 as I can. I understand you can buy items at Mitre 10 using your AirPoints reward card with a photo ID without needing any vouchers. Or so their website says......

Yep, pay at checkout.

[Cyclical]

My money is on AIR squealing for more cash LONG before the election. Could even be more badly needed loan "support", (if you can call it that considering the interest rate on the current loan), included in this weeks budget.

You're more than likely right. So maybe Shane will get to use some planes to air drop some of his reelection funds into the regions...too little too late perhaps...only time will tell.

[Beagle]

You're more than likely right. So maybe Shane will get to use some planes to air drop some of his reelection funds into the regions...too little too late perhaps...only time will tell.

That would be a new take on the term "helicopter money" :)

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12331365 Shane Jones lays into AIR over a culture of greed and overpayment and suggests that AIR senior staffers need to accept that their value as employees has fundamentally changed in line with the grim prospects for the industry.

For once I agree with him 100% but the only way you are going to cleanse this company of the culture of entitlement that exists deep within its roots is to let it collapse. When its totally collapsed only rehire staff that are really needed with a maximum cap of $250K and anyone who doesn't want to work at a fundamentally more reasonable level can go find employment elsewhere and good luck to them. The unions and the culture of entitlement will never be fundamentally changed any other way.

As this article titled The Airline Business is Terrible and will probably get worse suggests https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12331103 Things have so fundamentally changed for the industry it will probably never be the same. Extract:-
"There's little indication that a recovery is coming soon. Most industry analysts and executives expect years to pass before airlines fly as many passengers as they did before the pandemic. Even then, a rebound may come in fits and starts, propelled by medical advancements, an economic rebound and shifts in the public's tolerance for risk".

[winner69]

Are Koru lounges open under Level 2

[nztx]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12331365 Shane Jones lays into AIR over a culture of greed and overpayment and suggests that AIR senior staffers paid more than the Prime Minister need to accept that their value has fundamentally changed.

For once I agree with him 100% but the only way you are going to cleanse this company of the culture of entitlement that exists deep within its roots is to let it collapse. When its totally collapsed only rehire staff that are really needed with a maximum cap of $250K and anyone who doesn't want to work at a fundamentally more reasonable level can go find employment elsewhere and good luck to them. The unions and the culture of entitlement will never be fundamentally changed any other way.

Wonder if SJ realises that his own value will possibly be fundamentally changed too .. come any number of unfortunate events (for example, something called an election or if Pinstone Weters for any reason is not on board & the public don't like SJ dropped into the hot seat as replacement with trying his mindless interferring & trumpeting away)

[Zaphod]

Are Koru lounges open under Level 2

No definitive announcement as yet. We haven't even seen the new schedule. IMO they'll keep them closed for the time being as they must severely restrict the number of people in the lounges, they must enforce social distancing enforced (the company has a significant Worksafe enforced liability around this) , and they cannot serve buffet style.

[Beagle]

Wonder if SJ realises that his own value will possibly be fundamentally changed too .. come any number of unfortunate events (for example, something called an election or if Pinstone Weters for any reason is not on board & the public don't like SJ dropped into the hot seat as replacement with trying his mindless interferring & trumpeting away)

Wonder no more "'I've got every right to put that challenge to the executive class of Air New Zealand because every three years I put my self to the test in the political market.''
Salary figures from last year's annual report show 31 Air New Zealand managers were paid more than what Jacinda Ardern earned then - $471,000.... The figures also showed 44 ''aircrew, engineering, overseas and other staff'' were paid more than the PM last year... "

When you have a good deep think about it, given the airline is Govt controlled and only there now because of massive Government support which has avoided it being Bankrupt already, it is completely inappropriate that any employee (including Greg Foran) now earns more than the PM. 12 staff at AIR earn more that $1m and some are doing little more than sitting around picking their noses, watching flight radar and commenting on twitter Instagram and fakebook about the bleeding obvious that demand has fallen off a cliff into a very deep chasm. Thank you "Captain Obvious" for stating the obvious but do we really need to pay you one million dollars a year to post such remarkable "insights".... Heck, some dogs post their insights for free.

[samjaynz]

Wonder no more "'I've got every right to put that challenge to the executive class of Air New Zealand because every three years I put my self to the test in the political market.''
Salary figures from last year's annual report show 31 Air New Zealand managers were paid more than what Jacinda Ardern earned then - $471,000.... The figures also showed 44 ''aircrew, engineering, overseas and other staff'' were paid more than the PM last year... "

When you have a good deep think about it, given the airline is Govt controlled and only there now because of massive Government support which has avoided it being Bankrupt already, it is completely inappropriate that any employee (including Greg Foran) now earns more than the PM. 12 staff at AIR earn more that $1m and some are doing little more than sitting around picking their noses, watching flight radar and commenting on twitter Instagram and fakebook about the bleeding obvious that demand has fallen off a cliff into a very deep chasm. Thank you "Captain Obvious" for stating the obvious but do we really need to pay you one million dollars a year to post such remarkable "insights".... Heck, some dogs post their insights for free.

You don't need the weatherman to tell you when it's bucketing down ... I'll do his job for half the price.

On a side note, cannot get anyone to action the refund of my nearly $1500 APD that were used to purchase goods that turned out (over 6 weeks later) to be permanently out of stock.

Nobody will respond to any comms.

[nztx]

Wonder no more "'I've got every right to put that challenge to the executive class of Air New Zealand because every three years I put my self to the test in the political market.''
Salary figures from last year's annual report show 31 Air New Zealand managers were paid more than what Jacinda Ardern earned then - $471,000.... The figures also showed 44 ''aircrew, engineering, overseas and other staff'' were paid more than the PM last year... "

When you have a good deep think about it, given the airline is Govt controlled and only there now because of massive Government support which has avoided it being Bankrupt already, it is completely inappropriate that any employee (including Greg Foran) now earns more than the PM. 12 staff at AIR earn more that $1m and some are doing little more than sitting around picking their noses, watching flight radar and commenting on twitter Instagram and fakebook about the bleeding obvious that demand has fallen off a cliff into a very deep chasm. Thank you "Captain Obvious" for stating the obvious but do we really need to pay you one million dollars a year to post such remarkable "insights".... Heck, some dogs post their insights for free.


How much does Joe Public pay this SJ Trougher for blowing bubbles, wiggling a stick in a large slush fund & throwing tantrums ? ;)

Not trying to in anyway defend AIR or corporate Empire building - but what would any commercial airline be shelling out for Top Level Manpower ? .. Perhaps SJ should aim his shanghai instead at the Unions who contributed to an exorbitant pyramid of Staffing costs at some of these large outfits .. in particular those owned by the taxpayer .. that is if he was game to dare even ferrit out some of the root causes, rather than shooting from the hip loudly & thereby further trying to prove valid reason for his membership of the Left's ignorant "A-H Club" ;)

[Beagle]

How much does Joe Public pay this SJ Trougher for blowing bubbles, wiggling a stick in a large slush fund & throwing tantrums ? ;)

Come on now, when in charge of a billion dollar lolly scramble there must be at least some effort in deciding in which direction to throw the lollies, that's got to be a little bit harder than watching flight radar all day and making moronic tweets. SJ has to be worth at least...oh I dunno...minimum wage :D

[nztx]

Come on now, when in charge of a billion dollar lolly scramble there must be at least some effort in deciding in which direction to throw the lollies, that's got to be a little bit harder than watching flight radar all day and making moronic tweets. SJ has to be worth at least...oh I dunno...minimum wage :D

There are tens of thousands of more worthy reciprients of a Jones rescue grant to help them survive & continue in existence - where it could be most beneficial .. and yet he wastes his time slugging AIR .. exactly what planet is SJ on ? ;)

[Beagle]

There are tens of thousands of more worthy reciprients of a Jones rescue grant to help them survive & continue in existence - where it could be most beneficial .. and yet he wastes his time slugging AIR .. exactly what planet is SJ on ? ;)

Planet Shane Jones :lol: :lol:
Anyway...back to AIR. I'd wager Grant Robertson will throw them another bone on Thursday. Hope its more fairly priced than the last one.

[biker]

If the market is correct, then AIR is no where near the dire situation that is being made out by the company itself, the media and others.
Something doesn’t add up.

[dobby41]

If the market is correct, then AIR is no where near the dire situation that is being made out by the company itself, the media and others.
Something doesn’t add up.

Why would you think that the market is correct?

[Cyclical]

If the market is correct, then AIR is no where near the dire situation that is being made out by the company itself, the media and others.
Something doesn’t add up.

I think most of us have concluded the market is indeed...incorrect.

[biker]

See below. Didn’t include quote

[biker]

Why would you think that the market is correct?

I said “If” . I didn’t say I think it is. It may or may not be. Time will tell

[biker]

Why would you think that the market is correct?

I don’t necessarily think it is but multiple millions of dollars of shares being bought and a share price of $1.25 ish would indicate something.
Yes, someone was selling but the share price went from 80c then doubled before settling down a bit to where it is now.
Multimillions of dollars say someone - many people - have confidence in the company.

[Beagle]

Air probably get about another $40-45m by my calculations from the 8 week extension to the wage subsidy scheme announced in the budget today as their business is definitely down by more than 50% ! That's good, should push the date by which they have to recapitalise the company out by a week or so. Budget provisions for an extra $400m to promote tourism locally is probably straight down a rat hole or three as you're either brave enough (and have the spare financial resources), to fly with their so called on board social distancing or you aren't / won't.

[RTM]

I don’t necessarily think it is but multiple millions of dollars of shares being bought and a share price of $1.25 ish would indicate something.
Yes, someone was selling but the share price went from 80c then doubled before settling down a bit to where it is now.
Multimillions of dollars say someone - many people - have confidence in the company.

I’m with you biker, seems odd. Personally I won’t fly anywhere soon. And will take a fair bit of care with any tourism we undertake. Just can’t see how AIR survives on domestic tourism. As you said...something doesn’t add up.
I sold out a solid loss...watching with a macabre interest to see if I made a mistake or not.

[Beagle]

Tourism isn't going back to anything like it was for many years. Iceland's Govt taking the correct, (and VERY different) approach in my opinion.
https://grapevine.is/news/2020/05/11/government-will-not-step-in-to-save-icelandair-from-bankruptcy/ (Thanks to Iceman for sending me the link)

[keenkiwiflyer]

Watching this with interest. Expecting more tourism announcements next week. Kelvin Davis has had a poor run of media, and feel they need to regain his credibility within the industry and public quickly with a election right around the corner.

I expect Air NZ to rise to mid 1.30s next week.

[Balance]

For the record :

Air NZ has contributed billions of dollars in taxes, direct and indirect (PAYE, GST), and dividends to NZ since it was effectively 'privatized' at bargain basement price of 27c ps or $850m in 2000.

Since that time, NZ government has received $1.453 billion in dividends, sold down 20% back to the public for $365m in 2013, and currently holds 52% worth $583m.

And the current bailout is a loan which has to be repaid.

https://www.nbr.co.nz/article/air-nz-has-delivered-84-annual-return-government-2002-rescue-treasury-estimates-b-189318

[Cyclical]

Watching this with interest. Expecting more tourism announcements next week. Kelvin Davis has had a poor run of media, and feel they need to regain his credibility within the industry and public quickly with a election right around the corner.

I expect Air NZ to rise to mid 1.30s next week.

With a handle like yours, do you have anything you need to disclose while commenting on this thread, lol :)

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12331941

That is why the Iceland approach posted over-page and reproduced here is the correct one. https://grapevine.is/news/2020/05/11/government-will-not-step-in-to-save-icelandair-from-bankruptcy/

[Snow Leopard]

From the OCA thread:

Not really a "craze" though is it. I think knowing what operating profit would have been without specific Covid 19 costs is useful information as hopefully that gives investors a better handle to assess fair value based on normalised profit. (One would hope Covid 19 costs won't be with us indefinitely).

So we are all looking forward to AIR using this measure then? ;)

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12331941

That is why the Iceland approach posted over-page and reproduced here is the correct one. https://grapevine.is/news/2020/05/11/government-will-not-step-in-to-save-icelandair-from-bankruptcy/

Iceland’s overall approach (not just for airlines) seems more pragmatic than our molly coddling approach

While we seem to keep subsidising and giving loans to businesses that inevitably will go broke iceland appears to ‘
“We may need to make some sacrifices,” Bjarni warns. “Losing companies that are inefficient and not working will reduce state intervention.” It is his belief that private enterprise will “stimulate” the economy and “create new jobs” if left to its own devices.

Iceland used to these economic crashes ....one of most affected countries post GFC

[Snow Leopard]

Singapore airlines announced their first ever loss, a lot of it due to future fuel hedging losses.

Their year ended 31-Mar and that final quarter was a real downer for them.

You can grab the accounts and commentary via https://www.singaporeair.com/en_UK/sg/about-us/information-for-investors/financial-results/ if you wish.

[IAK]

Good stuff. AirNZ turns dreamliner into inter island cargo carrier.
https://amp.rnz.co.nz/article/dd6dd6f0-fb8e-4218-857c-a8d6a6a8ad13?__twitter_impression=true

[Beagle]

From the OCA thread:


So we are all looking forward to AIR using this measure then? ;)

LOL


Iceland’s overall approach (not just for airlines) seems more pragmatic than our molly coddling approach

While we seem to keep subsidising and giving loans to businesses that inevitably will go broke iceland appears to ‘
“We may need to make some sacrifices,” Bjarni warns. “Losing companies that are inefficient and not working will reduce state intervention.” It is his belief that private enterprise will “stimulate” the economy and “create new jobs” if left to its own devices.

Iceland used to these economic crashes ....one of most affected countries post GFC

Molly coddling to unions lead by Savage will end badly. Iceland definitely have the right idea. Get efficient and get real or get gone. AIR (contrary to popular belief) should not be run as a social welfare organisation for the elite.

[Raz]

LOL



Molly coddling to unions lead by Savage will end badly. Iceland definitely have the right idea. Get efficient and get real or get gone. AIR (contrary to popular belief) should not be run as a social welfare organisation for the elite.

Heard this morning, Australian will discuss the trans Tasman bubble no earlier than July. News to me, may have already been put out there....

[Zaphod]

Heard this morning, Australian will discuss the trans Tasman bubble no earlier than July. News to me, may have already been put out there....

Well, the statement from Scott Morrison a few days ago was that he "could see the trans-Tasman travel bubble in operation as early as July". There's no reasons why discussions can't be held earlier, so I'm not sure whether this has indeed changed or not.

[Sideshow Bob]

https://www.airpointsstore.co.nz/Product/Mitre10/eVoucher

Mitre 10 vouchers are back at the airpoints store.....

[Sideshow Bob]

Good stuff. AirNZ turns dreamliner into inter island cargo carrier.
https://amp.rnz.co.nz/article/dd6dd6f0-fb8e-4218-857c-a8d6a6a8ad13?__twitter_impression=true

Given the amount of courier freight, and the delays......might not be a bad idea.

[Raz]

Well, the statement from Scott Morrison a few days ago was that he "could see the trans-Tasman travel bubble in operation as early as July". There's no reasons why discussions can't be held earlier, so I'm not sure whether this has indeed changed or not.

Not sure, this was direct from a Minister.

[peat]

Singapore airlines announced their first ever loss, a lot of it due to future fuel hedging losses.



financial engineering to the rescue one more time. :p


I agree there is something going on with AIR share price. Such that it makes those of us who think
the company is a basket case
are wrong. But history is on our side.

[dobby41]

I don’t necessarily think it is but multiple millions of dollars of shares being bought and a share price of $1.25 ish would indicate something.

I have talked to lots of people new to shares who all say "buy AIR, Govt won't let them fail" but they don't realise that the Govt might not (probably wouldn't if it came to that) pay them their $1.25 if they took over.
The people think they can't lose, they don't understand that they can.

[unhuman]

Likely true, but exactly how many funds are these types of investors putting in and therefore what impact are they likely to have on the share price?

Bigger players out there I would have thought buying / selling. What do they know? To be determined.

[Beagle]

I have talked to lots of people new to shares who all say "buy AIR, Govt won't let them fail" but they don't realise that the Govt might not (probably wouldn't if it came to that) pay them their $1.25 if they took over.
The people think they can't lose, they don't understand that they can.

The last bailout was at 25 cents, not $1.25. History has an ironic way of quite often recurring.

[dobby41]

The last bailout was at 25 cents, not $1.25. History has an ironic way of quite often recurring.

I was talking about the price it is now - people (new to shares) seem to think their investment is safe when it isn't.

[Beagle]

I was talking about the price it is now - people (new to shares) seem to think their investment is safe when it isn't.

I couldn't agree more. No question the effect on AIR's business and likely effect going forward for the foreseeable future has been and is highly likely to be extremely serious, to put it mildly.

[RTM]

I couldn't agree more. No question the effect on AIR's business and likely effect going forward for the foreseeable future has been and is highly likely to be extremely serious, to put it mildly.

So AIR steady for a couple of weeks in the mid 120's....what are we missing or is this as bad as it gets ?
Doesn't add up....as someone said way above.

[k14]

So AIR steady for a couple of weeks in the mid 120's....what are we missing or is this as bad as it gets ?
Doesn't add up....as someone said way above.
Yes, doesn't add up at all. Seems they have tweaked their domestic schedules going to at least July now. Had booked domestic flights for early July back in Feb and just yesterday had the confirmation for schedule change come through. Have been re-booked on slightly earlier flight at no cost to me. So I guess they are heading back towards the new normal, how this plays out is anyone's guess?

[Beagle]

So AIR steady for a couple of weeks in the mid 120's....what are we missing or is this as bad as it gets ?
Doesn't add up....as someone said way above.

There are many shares than confound me with the way they have bounced back off their 23 March lows with apparent wanton disregard for the underlying effect of a new economic reality confronting the company but none more so than AIR. How can a company retaining 75% of its workforce and 100% of its equipment but doing just ~ 10% of its business for the foreseeable future survive in its current form ? The answer clearly is it can't. The second round of wage subsidy will help to some extent but its literally like putting a band aid on a cancer.

Until there is widespread availability of a vaccine people en-masse will deem it unsafe to fly and flying will deteriorate (especially without Koru club access or any inflight service) to something one endures if they must. Sit there with your face mask on, no inflight magazine, no food, water or even a boiled lolly, not even any trolley dolly eye candy...the public response will be, no thanks, I'll drive.

A massive capital raise is an absolute certainty in my opinion...there is simply no question in my mind as to whether they can get through this without one. Timing and pricing are the only unknowns.
History suggests ( post 9/11 capital reconstruction) that the Govt will wait until minority shareholders equity has been almost expunged and then they will leverage their balance sheet to rescue the national airline in the national interest. I see no compelling reason why it will be different this time.

Minority shareholders appear to be on their very own version of a one way financial trip to Mt Erebus. I've seen some photo's of the passengers on that trip and they looked very happy half way there...and we know that didn't end well. Of course when the forward terrain warning system starts sounding (woop woop, pull up, pull up) the Govt will step in before any actual financial crash, but not before they have too. That's how I see it anyway... If others see it differently, good luck to them, I think they'll need it.

[Sideshow Bob]

Meanwhile on Sharies Facebook page, new post today:

"
Air NZ not improving much. Anyone worried?"

[propertynewb]

https://www.airpointsstore.co.nz/Product/Mitre10/eVoucher

Mitre 10 vouchers are back at the airpoints store.....

Is Mitre10 not in a bit of strife itself?

[justakiwi]

So did you take a minute to post, to help the poster better understand his investment, like I did? Or did you just enjoy a chuckle at his expense?


Meanwhile on Sharies Facebook page, new post today:

"
Air NZ not improving much. Anyone worried?"

[samjaynz]

Finally got my missing APD refunded after constant emails and phone calls (apparently some 'technical' error on their system).

Spent them immediately ... now have an industrial quantity of wine winging its way to my place.

Still blows my mind how the share price is holding up on this puppy.

[Sideshow Bob]

Is Mitre10 not in a bit of strife itself?

Off-topic, but got a link?? Bunnings have a few problems and closing stores.

[Sideshow Bob]

So did you take a minute to post, to help the poster better understand his investment, like I did? Or did you just enjoy a chuckle at his expense?

There were already 80-odd other comments, mostly echoing the same sentiment as what I would have said.

[CKWJ]

History suggests ( post 9/11 capital reconstruction) that the Govt will wait until minority shareholders equity has been almost expunged and then they will leverage their balance sheet to rescue the national airline in the national interest. I see no compelling reason why it will be different this time.

Minority shareholders appear to be on their very own version of a one way financial trip to Mt Erebus. I've seen some photo's of the passengers on that trip and they looked very happy half way there...and we know that didn't end well. Of course when the forward terrain warning system starts sounding (woop woop, pull up, pull up) the Govt will step in before any actual financial crash, but not before they have too. That's how I see it anyway... If others see it differently, good luck to them, I think they'll need it.

There are so many variables that suggest this could be much much worse for minority shareholders than last time, the first being the fact that the government is starting from 53% not 0. The second refers to the fact that while 9/11 was a big hit to the industry when they were last bailed out, it took 3 years to recover according to US transportation data, travel to significant markets could be banned altogether or heavily restricted for that length of time due to covid, let alone recover.

Even if the TT bubble gets up and running in a couple of months (the QLD premier said it could even be Sept before their borders are open), the fact remains that AIR NZ is still sitting here with a number of assets geared towards high long-haul capacity, with near zero demand or ability to use them as they were previously able to.

[dobby41]

Is Mitre10 not in a bit of strife itself?

Is it? Hadn't seen anything on that so a link would help.

[mondograss]

Is it? Hadn't seen anything on that so a link would help.

The Whangaparaoa store has made some staff redundant but that's all I've seen. Mitre10's are operated more like a franchise with operators sometimes having a bunch of stores so you might get some closures but you're unlikely to see the whole chain go under.

[Sideshow Bob]

The Whangaparaoa store has made some staff redundant but that's all I've seen. Mitre10's are operated more like a franchise with operators sometimes having a bunch of stores so you might get some closures but you're unlikely to see the whole chain go under.

I for one have more at stake with Mitre 10 through vouchers than AIR currently. :lol:

Think there would be several other posters here in the same boat. :huh:

[Beagle]

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12332833

[winner69]

Things looking brighter

@CamWallace_NZ
More progress this week with @FlyAirNZ demand growing, especially on leisure based routes. Team are looking at additional sectors for Queens Bday weekend (we could still keep that holiday if we were a republic). Some domestic lounges re-open 25 May. @andykirton

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12333170 AIR under pressure to issue more refunds instead of credits.

[Cyclical]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12333170 AIR under pressure to issue more refunds instead of credits.

So they should.

I just wrote this over in the AIA thread:

It's probably a fair bet that if the new normal is 66% of the old, that travel expenses will increase to cover a significant proportion of that short fall, landing expenses being part of that. A lot of the expenses in the industry likely don't have the room to find the efficiencies required to offset such a reduction in headcount. You'd assume (or at least expect) that airline competition would have reduced too at the end of all this (although AIR will be praying there isn't a reset, leaner and meaner Virgin AU). Flights in real terms have come down massively in recent decades. Maybe we're about to see a correction there. If that comes to fruition, it will rub salt into the wounds of those who haven't been able to get a ticket refund and yet will struggle to redeem their credit on similarly priced tickets.

[Waltzing]

I am one of those that just cancelled my 12 weeks stay in sweden for next year with large number of non refundable bookings in holland and finland and st peterberg... i think it will be 3 years before dividend income rebuilds to the point where i might return to eruope. Every 5 year there seems to be a major event and ive almost thinking is this stuff real. I had in my mind a constant theme of sell sell sell. I would have made more selling not holding nearly every time. Last year was a perfect case of sell and dont worry about the tax bracket thing. Next time i go im making sure its based on business not pleasure..

[dreamcatcher]

Airline stocks soar ...........

https://www.marketwatch.com/story/airline-stocks-soar-on-upbeat-tsa-data-analyst-commentary-2020-05-18?mod=home-page

[Marilyn Munroe]

The line up of suitors for Virgin ( Under Arm Bowlers Division);

https://www.abc.net.au/news/2020-05-18/four-bidders-shortlisted-to-take-over-virgin-australia/12259392

Boop boop de do
Marilyn

[Raz]

The line up of suitors for Virgin ( Under Arm Bowlers Division);

https://www.abc.net.au/news/2020-05-18/four-bidders-shortlisted-to-take-over-virgin-australia/12259392

Boop boop de do
Marilyn

Can't see AIR high cost structure doing well against a decent competitor(except for home)

[iceman]

Can't see AIR high cost structure doing well against a decent competitor(except for home)

Sad to see AIR let this crisis go to waste. It should have been used to make huge cost savings to make the airline much leaner and meaner for the future. Instead it will become a slow moving, uncompetitive Government controlled/run business.

[Beagle]

Can't see AIR high cost structure doing well against a decent competitor(except for home)

I see Jayne Herdlicka former CEO of JetStar is tied in with well resourced Bain Capital. Jayne's no stranger to driving costs down with plenty of disgruntled pilots and crew from JetStar in former good times. I would imagine there will be no shortage of planes available to lease on ultra competitive terms, no shortage of pilots and crews so grateful to have their jobs back on far more realistic rates and of course Virgin will not be handicapped by legacy fuel hedging issues that will cost other airlines hundreds of millions this year.

AIR have completely and utterly wasted this crisis and from what I can see brought no new systemic reduction to their bloated cost structure. Unfortunately there was never a worse time to have a new CEO with no experience in the industry. AIR will continue as what will be in effect a state controlled de facto social welfare system for the elite which in my book makes them uninvest-able at any stage in the future.

[Waltzing]

Probably fly another provider in a few years if AIR cant compete back to singapore , what about singapore to copenhagen route in 2 years? anyone want to guess the business class seat cost?

[blackcap]

"Air traffic volumes have collapsed in the wake of the Covid-19 outbreak, and Airways forecasts it will take up to two years for traffic to return to just 60% of pre-pandemic levels."

From the NBR this morning.

[samjaynz]

Is this in addition to the already announced redundancies? Or part of the existing 'package'?:

https://www.stuff.co.nz/business/industries/121575363/coronavirus-air-new-zealand-making-more-than-1300-staff-redundant-union-says

[winner69]

Is this in addition to the already announced redundancies? Or part of the existing 'package'?:

https://www.stuff.co.nz/business/industries/121575363/coronavirus-air-new-zealand-making-more-than-1300-staff-redundant-union-says

More / extra by sounds of it

Somewhere in that story it mentions 3750 staff to go all up

[Beagle]

More / extra by sounds of it

Somewhere in that story it mentions 3750 staff to go all up

So they had 12,500 and will have about about 8,750 = 70% of staff but are doing about 10% of previous business but Couta1 tells me they won't answer their phone, (despite sitting in a queue for well over an hour) to action the credit they promised him for cancelling his tickets for flights that are actually happening but they have forced him to rebook at 3 times the price for exactly the same flights ! (Breech of fair trading act right there !)

Seeing as they have staff "for Africa" with nothing to do seeing as they're not flying much the mind boggles as to why they can't answer their phone in a timely manner ? Coutts tells me he emailed them and got an automated response that he can expect a response within 21 working days. For goodness sake a business with so many staff sitting around picking their noses and watching flight radar takes a whole month to reply to emails or hours to answer the phone....its beyond pathetic, the wheels have well and truly fallen off.

This is a company that is now both financially and morally almost bankrupt. The Govt should just let it fail, nationalise it and create a type of ministry of air works. At least then you might get a response within 14 days or your phone enquiry answered within an hour. The way this is being run, honestly I think I'd rather fly JetStar.
At least that way there is no pretence that you will get anything other than appalling bad service, its simply a known fact and the price you pay reflects that.

[Cyclical]

Is this in addition to the already announced redundancies? Or part of the existing 'package'?:

https://www.stuff.co.nz/business/industries/121575363/coronavirus-air-new-zealand-making-more-than-1300-staff-redundant-union-says


More / extra by sounds of it

Somewhere in that story it mentions 3750 staff to go all up

Seems the union don't even know...

"In an email to Stuff, a spokesman for E tū said it was unclear if the cuts were in addition to those previously announced."

[Cyclical]

So they had 12,500 and will have about about 8,750 = 70% of staff but are doing about 10% of previous business but Couta1 tells me they won't answer their phone, (despite sitting in a queue for well over an hour) to action the credit they promised him for cancelling his tickets for flights that are actually happening but they have forced him to rebook at 3 times the price for exactly the same flights ! (Breech of fair trading act right there !)

Seeing as they have staff "for Africa" with nothing to do seeing as they're not flying much the mind boggles as to why they can't answer their phone in a timely manner ? Coutts tells me he emailed them and got an automated response that he can expect a response within 21 working days. For goodness sake a business with so many staff sitting around picking their noses and watching flight radar takes a whole month to reply to emails or hours to answer the phone....its beyond pathetic, the wheels have well and truly fallen off.

This is a company that is now both financially and morally almost bankrupt. The Govt should just let it fail, nationalise it and create a type of ministry of air works. At least then you might get a response within 14 days or your phone enquiry answered within an hour. The way this is being run, honestly I think I'd rather fly JetStar.
At least that way there is no pretence that you will get anything other than appalling bad service, its simply a known fact and the price you pay reflects that.

This poor response to calls and emails, or lack of as the case may be, is unfortunately probably by design. I hope the ones that are brave enough to answer the phone get a special Covid19 subsidy for the extra work related stress atm!

[Beagle]

This poor response to calls and emails, or lack of as the case may be, is unfortunately probably by design. I hope the ones that are brave enough to answer the phone get a special Covid19 subsidy for the extra work related stress atm!

LOL I suspect you are absolutely right.
Flying is now something to be "endured" rather than enjoyed. If one is endure the whole thing one might as well minimise the price. Auckland to Queenstown on JetStar for as little as $56 each way, BYO gloves, hand sanitizer, face mask, drink, snack and magazine is probably about as good as flying gets these days.

[Cyclical]

LOL I suspect you are absolutely right.
Flying is now something to be "endured" rather than enjoyed. If one is endure the whole thing one might as well minimise the price. Auckland to Queenstown on JetStar for as little as $56 each way, BYO gloves, hand sanitizer, face mask, drink, snack and magazine is probably about as good as flying gets these days.

Is that current pricing? Damn, that's quite appealing...I'll get the wife to pack the bags. Will I need to book a rental car in advance do you think?

[Beagle]

Is that current pricing? Damn, that's quite appealing...I'll get the wife to pack the bags. Will I need to book a rental car in advance do you think?

Yeap, I just had a look for mid September. These guys are cheap. Leave your booking until August if you're going in Sept. I got a current model Toyota Corolla for just over $30 a day last year.
https://www.gorentals.co.nz/
www.jetstar.com

[samjaynz]

Seems the union don't even know...

"In an email to Stuff, a spokesman for E tū said it was unclear if the cuts were in addition to those previously announced."

Glad to see I'm not the only one who's confused.

One thing I will say is the way Air NZ have carried on with delaying refunds, forcing people to rebook at higher cost etc has really put me off them. Pre Covid I flew a fair bit for work ... was a real eye opener to look back in my Xero on the last FY and see just how much I've given them (all those 5.30am CHC - AKL really add up!).

I will admit that I overspent on flights when I could have flown Jetstar for cheaper (or Qantas/Virgin/Emirates trans tasman) because I liked the lounges, the frequent flyer points, the status upgrades etc ... fool me once, right? I was a bit suckered in by the 'prestige', as it were. I'd book the premium seat for $10 extra ... because who doesn't want that bit more leg room, or I'd pay for the Works when flying to Aussie.

Although my flying is unlikely to return to the quantity it had pre-Covid, I'm now going to go with whoever is the cheapest that fits my schedule.

As others have pointed out, flying is likely to be a lot more 'grim' of a prospect in the near future. Queue up, get on board, sit there in your seat ... all that matters when the added extras are removed like meal service etc then is just the price.

Furthermore, I've been appalled at the way some members of my family have been treated trying to get refunds. I've got a couple of relatives who had a big overseas trip booked, have been promised refunds and nothing after weeks - they are out of work now so could really use the money.

[peat]

lets be frank the stated numbers are just numbers and the layoff process is going to continue on and on. After they;ve laid off heaps of the frontline staff, they'll suddenly find they have too many middle managers , and the flight planning will be a whole lot simpler so wont need so many there either.... that department doing iata stuff wont have many internationals anymore so no complex calcs to refund portions of the ticket prices etc etc ... but of course they cant do it all at once and also lets be realistic you cant have cabin crew picking up the phones ....

[Stranger_Danger]

For multiple reasons, I hate shorting, but I am so, so, so tempted.

[Beagle]

Furthermore, I've been appalled at the way some members of my family have been treated trying to get refunds. I've got a couple of relatives who had a big overseas trip booked, have been promised refunds and nothing after weeks - they are out of work now so could really use the money.
The airline appears to be morally and ethically bankrupt already ! That is profoundly shocking !

[keenkiwiflyer]

For multiple reasons, I hate shorting, but I am so, so, so tempted.
How do you short on a NZ stock?

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12333532

Union's and staff appear to have no understanding of the business or the rate at which it is burning through cash. You'd be forgiven for thinking the unions want the consultation process to drag on almost endlessly.

[Snow Leopard]

....honestly I think I'd rather fly JetStar.
....

Now, there is something I never expected to read.

[peat]

For multiple reasons, I hate shorting, but I am so, so, so tempted.



How do you short on a NZ stock?

Its very difficult to short AIR now. Not sure if Beagle still is or not.
The CMC platform is now only allowing positions to be closed out with AIR
At first they stopped you shorting it and now they're bailing from it being one of the stocks they offer even for longs. Makes you wonder why huh?

[Chinesekiwi]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12333532

Union's and staff appear to have no understanding of the business or the rate at which it is burning through cash. You'd be forgiven for thinking the unions want the consultation process to drag on almost endlessly.

Please bear with me and I will keep things brief (ish)

I can say that the Union and the company both have very clear understandings of what is transpiring and what the end game will be - as do the staff.

Staff, in this case older wide body Long Haul crew, are very aware of how this business runs - it may suprise people just how heavily invested staff are in this company, the sense of pride and ownership should be very evident and to boot there are a whole lot of employee/shareholders in this company.

Being an employee/worker doesn't preclude one from being a shareholder and Air NZ has a large number of employee shareholders (not via incentive schemes and the like). They are not mutually exclusive.

In essence the issue of the protracted wrangling over redundancies is simple and here it is.

In 2014 (or 13) Air NZ threatened the union with outsourcing its entire wide body crew resource. So essentially all crew were to disestablished and those who accepted new contracts with vastly reduced term/ conditions and salaries would be taken back on. The company stated it wanted $6 million PA from the workers.

Essentially a massive 6 million dollar a year transfer of wealth (wages) from workers to shareholders (dividends) - don't get me wrong I owned plenty of shares over these years.

In order to avoid outsourcing the Union agreed to Air NZ's second plan which was to keep all wide body Long Haul existing crew (to which the then new CEO Christopher Luxon famously stated were legacies of the past) on their current contracts but in order to keep that they needed to agree that any new crew member employed forthwith would go onto a new schedule contract - the same vastly reduced terms and conditions and salary as originally proposed in the outsource proposal. The poison was swallowed.

The two groups would be kept separate, The existing crew would operate only on 777 200 and 777 300 aircraft and the new crew group would operate exclusively on the new 787 aircraft. Both crew groups would have vastly different contracts with the contract for each crew group running to 169 pages and within those 169 page contracts were multiple sub clauses affecting different ranks - believe me it was and is a deeply detailed document.

The issue has now arisen whereby some 1500 or so crew need to be put off yet the contracts Air NZ and the Union at the time have now proven to be unbelievably contradictory and almost impossible to reconcile. You can drive a very very wide bus through the loopholes and now you have multiple groups and ranks within groups at each others throats defending their legal interpretations of why their group must remain and another group be made redundant.

The Union itself (though this union ETU inherited the bulk content of these contracts from the previous union FARSA) is at high risk of being sued by it's constituent member groups who have lawyered up. The Union like the company is completely tied in legal knots and QC's are now involved - this is a case where the company got too clever in 2014 and tore the crew apart and put in place what they thought were smart contracts.

The price they pay now for getting those annual $6m wage savings is the pain now that all suffer with these convoluted and completely contradictory contracts - I have seen them they are utterly open to challenge on so many levels and are in fact the subject of three legal challenges and more to come.

It is not the the company, the union or the staff are necessarily slowing things down it is a function of god awful contracts.

However this week the redundancy calls are being made en masse and the company has acceptable that the inevitable post redundancy legal challenges will roll in.

My disclosure:

I was but am no longer a shareholder in ANZ
I was made redundant by them yesterday.
It's been my beloved career and I mourn it deeply.
Life goes on.

[Snow Leopard]

....I was made redundant by them yesterday....

:( Sorry to hear that :(

[Sideshow Bob]

My disclosure:

I was but am no longer a shareholder in ANZ
I was made redundant by them yesterday.
It's been my beloved career and I mourn it deeply.
Life goes on.


Very sorry to hear Chinesekiwi.

Indeed having been in a similar situation, the sun does still comes up - but takes a little time.

Take care, and all the very best.

[Cyclical]

Please bear with me and I will keep things brief (ish)


Very insightful post, thanks for sharing. I was wondering if there might be some employees out there reading this thread and thinking some of us are pretty ruthless in our thinking...me included TBH. All we really want is for a healthy, competitive and sustainable company out the other side of it though. Having said that, really sorry to hear of your own position and hope that things look up for you soon.

[BlackPeter]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12333532

Union's and staff appear to have no understanding of the business or the rate at which it is burning through cash. You'd be forgiven for thinking the unions want the consultation process to drag on almost endlessly.

With a little bit of luck they kill off Air New Zealand (as they did with Ansett New Zealand) and AIR might have a chance to rise after bankruptcy proceedings like Phoenix from the ashes. Only problem is - I suppose the government will prefer to appease the unions and pay ad infinitum. Hey - it is only our money, isn't it?

{Edit:}

Just (after writing and posting above) I came across Chinese Kiwis outstanding and in depth post, which shows clearly a different perspective. It indicates that the fault is not just on the side of the unions, but that it was the company who started (and probably greatly contributed) to this mess.

I do feel for any front line staff who is now loosing their job due to no fault of their own.

I still don't think that anybody will gain through endless legal battles and delays ... but I acknowledge that the people who suffer most have the least responsibility for this mess. This is just sad.

ChineseKiwi - sad to hear about your redundancy and all the best for the future. I am sure the sun will shine again.

[samjaynz]

ChineseKiwi - sorry to hear about your redundancy. I hope you and your family are OK and you find new work or new opportunities. A close friend of my wife's lost her job with Air NZ yesterday too ... very gutted about it as she loved her work.

[RGR367]

Please bear with me and I will keep things brief (ish)

.............
My disclosure:

I was but am no longer a shareholder in ANZ
I was made redundant by them yesterday.
It's been my beloved career and I mourn it deeply.
Life goes on.

Sorry to hear about your redundancy. But yeah, life goes on and that's the spirit. And hopefully someday soon you'll be treating this redundancy too as a blessing in disguise. Good luck Chinesekiwi.

[Beagle]

Please bear with me and I will keep things brief (ish)

I can say that the Union and the company both have very clear understandings of what is transpiring and what the end game will be - as do the staff.

Staff, in this case older wide body Long Haul crew, are very aware of how this business runs - it may suprise people just how heavily invested staff are in this company, the sense of pride and ownership should be very evident and to boot there are a whole lot of employee/shareholders in this company.

Being an employee/worker doesn't preclude one from being a shareholder and Air NZ has a large number of employee shareholders (not via incentive schemes and the like). They are not mutually exclusive.

In essence the issue of the protracted wrangling over redundancies is simple and here it is.

In 2014 (or 13) Air NZ threatened the union with outsourcing its entire wide body crew resource. So essentially all crew were to disestablished and those who accepted new contracts with vastly reduced term/ conditions and salaries would be taken back on. The company stated it wanted $6 million PA from the workers.

Essentially a massive 6 million dollar a year transfer of wealth (wages) from workers to shareholders (dividends) - don't get me wrong I owned plenty of shares over these years.

In order to avoid outsourcing the Union agreed to Air NZ's second plan which was to keep all wide body Long Haul existing crew (to which the then new CEO Christopher Luxon famously stated were legacies of the past) on their current contracts but in order to keep that they needed to agree that any new crew member employed forthwith would go onto a new schedule contract - the same vastly reduced terms and conditions and salary as originally proposed in the outsource proposal. The poison was swallowed.

The two groups would be kept separate, The existing crew would operate only on 777 200 and 777 300 aircraft and the new crew group would operate exclusively on the new 787 aircraft. Both crew groups would have vastly different contracts with the contract for each crew group running to 169 pages and within those 169 page contracts were multiple sub clauses affecting different ranks - believe me it was and is a deeply detailed document.

The issue has now arisen whereby some 1500 or so crew need to be put off yet the contracts Air NZ and the Union at the time have now proven to be unbelievably contradictory and almost impossible to reconcile. You can drive a very very wide bus through the loopholes and now you have multiple groups and ranks within groups at each others throats defending their legal interpretations of why their group must remain and another group be made redundant.

The Union itself (though this union ETU inherited the bulk content of these contracts from the previous union FARSA) is at high risk of being sued by it's constituent member groups who have lawyered up. The Union like the company is completely tied in legal knots and QC's are now involved - this is a case where the company got too clever in 2014 and tore the crew apart and put in place what they thought were smart contracts.

The price they pay now for getting those annual $6m wage savings is the pain now that all suffer with these convoluted and completely contradictory contracts - I have seen them they are utterly open to challenge on so many levels and are in fact the subject of three legal challenges and more to come.

It is not the the company, the union or the staff are necessarily slowing things down it is a function of god awful contracts.

However this week the redundancy calls are being made en masse and the company has acceptable that the inevitable post redundancy legal challenges will roll in.

My disclosure:

I was but am no longer a shareholder in ANZ
I was made redundant by them yesterday.
It's been my beloved career and I mourn it deeply.
Life goes on.

Thank you for your insights. I feel very sorry for you. Best wishes.

[iceman]

Thank you for your insights. I feel very sorry for you. Best wishes.

Ditto. A very good post Chinesekiwi and I also feel sorry for your circumstances. Have a friend in the same situation as of yesterday.

[winner69]

From Salt FundsvApril report

As just one example, Air NZ (AIR, +58.2%) spiked on a retail investor driven surge, which almost appeared to be driven by a misunderstanding that the Government is bailing them out as suggested by a prominent radio host. Two of the more prominent DIY retail brokers accounted for one third of all turnover and almost all the net buying at one stage during the month.

Our take on the sombre reality is that this fine airline will survive and perhaps even prosper again in the future but current equity holders may own little of it when it does. No business with high fixed costs can survive a sudden cessation in revenue for long. AIR is burning cash faster than jet fuel and its formerly permanent positive working capital difference is falling sharply as ticket refunds and credits have to be issued. AIR also has significant out of the money oil hedges. Put this together and the onerous Government debt package must surely have a high likelihood of being converted into equity, heavily diluting current holders. The share price may come under pressure as this possibility becomes more obvious.

[Cyclical]

From Salt FundsvApril report

As just one example, Air NZ (AIR, +58.2%) spiked on a retail investor driven surge, which almost appeared to be driven by a misunderstanding that the Government is bailing them out as suggested by a prominent radio host. Two of the more prominent DIY retail brokers accounted for one third of all turnover and almost all the net buying at one stage during the month.

Our take on the sombre reality is that this fine airline will survive and perhaps even prosper again in the future but current equity holders may own little of it when it does. No business with high fixed costs can survive a sudden cessation in revenue for long. AIR is burning cash faster than jet fuel and its formerly permanent positive working capital difference is falling sharply as ticket refunds and credits have to be issued. AIR also has significant out of the money oil hedges. Put this together and the onerous Government debt package must surely have a high likelihood of being converted into equity, heavily diluting current holders. The share price may come under pressure as this possibility becomes more obvious.

Thanks winner. The highlighted bit has been obvious to a lot of us for several weeks now, and yet she's still cruising at ($1)25 thousand feet. I feel for these "retail investors" that are surely about to learn a harsh lesson.

[Beagle]

Now, there is something I never expected to read.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12333425
"Qantas and Jetstar will give masks to all passengers and implement other measures but will no longer leave an empty seat between passengers to provide a level of social distancing on board. The airline says it is impractical, unnecessary and would result in higher airfares. And Qantas boss Alan Joyce says the 60cm gap achieved by a leaving the middle seat empty is token social distancing at great economic cost".

Hmmm...I don't like the way they have unilaterally decided that with no consultation with N.Z. authorities.
For the foreseeable future...If I can't comfortably drive there in my own car, I'm not going, simple as that.

[dobby41]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12333425
"Qantas and Jetstar will give masks to all passengers and implement other measures but will no longer leave an empty seat between passengers to provide a level of social distancing on board. The airline says it is impractical, unnecessary and would result in higher airfares. And Qantas boss Alan Joyce says the 60cm gap achieved by a leaving the middle seat empty is token social distancing at great economic cost".

Hmmm...I don't like the way they have unilaterally decided that with no consultation with N.Z. authorities.
For the foreseeable future...If I can't comfortably drive there in my own car, I'm not going, simple as that.

Certainly the 60cm gap isn't the 1m they want so is it worth it?
Seems a bit token to me.

[Beagle]

Certainly the 60cm gap isn't the 1m they want so is it worth it?
Seems a bit token to me.

Leaving the middle seat vacant AND everyone wearing a mask is not ideal but in my opinion it is better than being jammed in like sardines literally rubbing shoulders and sharing arm rests with complete strangers.

[dobby41]

Leaving the middle seat vacant AND everyone wearing a mask is not ideal but in my opinion it is better than being jammed in like sardines literally rubbing shoulders and sharing arm rests with complete strangers.

You do know that jury is well out on wearing of masks - if worn badly they probably cause more harm than good.

[thedrunkfish]

The airline appears to be morally and ethically bankrupt already ! That is profoundly shocking !

Steady On.

Not too long ago AIR was considered a jewel. Remembering that companies are made of people, and people answer the phones.
I will reserve judgement on the poor souls who have to deal with customers over the phone, I can only imagine the abuse they have
suffered.

Coming from a workshop environment where every so often when someone comes in acting like an arse you have the distinct pleasure
of telling them to f*&!k off. Customer service employees have to gin and bear it.

[Beagle]

Steady On.

Not too long ago AIR was considered a jewel. Remembering that companies are made of people, and people answer the phones.
I will reserve judgement on the poor souls who have to deal with customers over the phone, I can only imagine the abuse they have
suffered.

Coming from a workshop environment where every so often when someone comes in acting like an arse you have the distinct pleasure
of telling them to f*&!k off. Customer service employees have to gin and bear it.

Lets have a look at the facts shall we.
There are separate and multiple reports from different parties indicating AIR are deliberately dragging the chain on issuing refunds and credits.
By law travel through America including transiting must be refunded not credited. AIR legal know full well that their beyond rights through America require compliance with US refund laws but have been dragging the chain and fobbing people off for ages. It took the Consumers institute to file a formal complaint with the commerce commission for them to finally agree to issue refunds, (but only for customers that ask for them). How many hours must customers sit in telephone waiting queue's to speak to someone ?
Is it reasonable that AIR are allowed to take a full month to respond to an emailed request for a refund ? What the heck are all the staff doing that aren't flying ?
75% of staff are retained and they are providing about 10% of normal flight services but wait times for communication appear to have never been worse. Does this strike you as fair and reasonable ?

I put it to you that senior management have instructed front line staff to avoid cash refunds at all costs and to actively engage in a campaign of deliberate obfuscation and frustration.

I think its an disgrace to cancel people's flights, promise them a credit and then they have to rebook exactly the same flights on the same day at 3 times the price. How on earth is this not a blatant breech of the fair trading act ? AIR in my opinion are engaging in some very sharp practices that are seriously undermining the goodwill of the public and destroying their former pretty good reputation.
I stand by my earlier comment you have quoted. AIR was good, now their reputation is being rapidly flushed down the toilet.

Any conduct is okay as long as it saves cash right ? Those front line staff answering the phones should be grateful they still have a job. A serious attitude change is required by some AIR staff. Others I know that work for AIR are very nice people but there is definitely a "culture of entitlement" within the airline from my first hand observations and discussions.

[Balance]

From Salt FundsvApril report
Put this together and the onerous Government debt package must surely have a high likelihood of being converted into equity, heavily diluting current holders. The share price may come under pressure as this possibility becomes more obvious.

Air NZ & government would need minority shareholders’ approval to convert the debt into shares, I would have thought - protection of minorities etc.

[traineeinvestor]

Air NZ & government would need minority shareholders’ approval to convert the debt into shares, I would have thought - protection of minorities etc.

Normally yes, but if a company gets into financial difficulty the shareholders are often left with a choice between (i) losing everything in an insolvency or (ii) getting massively diluted through the conversion (or similar scheme) but still having a small fraction of their original investment.

[James108]

Beagle, FYI I got a refund very quickly after I asked via email for travel booked to US.

I was pretty impressed given the circumstances.

[thedrunkfish]

Lets have a look at the facts shall we.
There are separate and multiple reports from different parties indicating AIR are deliberately dragging the chain on issuing refunds and credits.
By law travel through America including transiting must be refunded not credited. AIR legal know full well that their beyond rights through America require compliance with US refund laws but have been dragging the chain and fobbing people off for ages. It took the Consumers institute to file a formal complaint with the commerce commission for them to finally agree to issue refunds, (but only for customers that ask for them). How many hours must customers sit in telephone waiting queue's to speak to someone ?
Is it reasonable that AIR are allowed to take a full month to respond to an emailed request for a refund ? What the heck are all the staff doing that aren't flying ?
75% of staff are retained and they are providing about 10% of normal flight services but wait times for communication appear to have never been worse. Does this strike you as fair and reasonable ?

I put it to you that senior management have instructed front line staff to avoid cash refunds at all costs and to actively engage in a campaign of deliberate obfuscation and frustration.

I think its an disgrace to cancel people's flights, promise them a credit and then they have to rebook exactly the same flights on the same day at 3 times the price. How on earth is this not a blatant breech of the fair trading act ? AIR in my opinion are engaging in some very sharp practices that are seriously undermining the goodwill of the public and destroying their former pretty good reputation.
I stand by my earlier comment you have quoted. AIR was good, now their reputation is being rapidly flushed down the toilet.

Any conduct is okay as long as it saves cash right ? Those front line staff answering the phones should be grateful they still have a job. A serious attitude change is required by some AIR staff. Others I know that work for AIR are very nice people but there is definitely a "culture of entitlement" within the airline from my first hand observations and discussions.

I put it to you that your post is anecdotal and opinionated without fact.

Your the one who sounds self entitled. The entire company has gone from a shining star to a shambles through no fault of its own. Sorry if you freinds didn't get a timely refund my heart bleeds but thousands of talented and hard working people have had their lives turned upside down through no wrong doing and I won't agree with someone slandering their reputation because of a single source report of poor service.

[iceman]

Beagle, FYI I got a refund very quickly after I asked via email for travel booked to US.

I was pretty impressed given the circumstances.

My wife had a flight booked to London via LA. Cancelled and quickly refunded about 6 weeks ago. AIR staff did very well in the circumstances.

[Raz]

I put it to you that your post is anecdotal and opinionated without fact.

Your the one who sounds self entitled. The entire company has gone from a shining star to a shambles through no fault of its own. Sorry if you freinds didn't get a timely refund my heart bleeds but thousands of talented and hard working people have had their lives turned upside down through no wrong doing and I won't agree with someone slandering their reputation because of a single source report of poor service.

Self entitled to expect the basic ideals of the fair trading act to apply.

This company was never a shining star..Chinesekiwi sets out just one of these lovely management & union maneuverings and any long time customer knows the experience has been deteriorating for years pre covid-19.

If you haven't notice thousands of talented and hard working people have had their lives turned upside down right throughout the country, many with in essence no income while in AIR we have staff employed in a company with no work for them and no ability to afford. Except from Government support. Basically many cases of six figure by proxi wage subsidy. I pay six figures in tax and this is what it is wasted on.

[Beagle]

My wife had a flight booked to London via LA. Cancelled and quickly refunded about 6 weeks ago. AIR staff did very well in the circumstances.

Winner got his refund quickly too but that was many weeks ago. Since then they seem to have become obstructive. I guess that's what happens as they start to run out of money. I firmly believe they will require recapitalisation before the end of winter.

Well said RAZ.

[Raz]

Winner got his refund quickly too but that was many weeks ago. Since then they seem to have become obstructive. I guess that's what happens as they start to run out of money. I firmly believe they will require recapitalisation before the end of winter.

Well said RAZ.

Early on they did give refunds for substantial overseas travel, I went in way early with 8 scheduled return flights this year to LAX cancelled.

[Beagle]

Early on they did give refunds for substantial overseas travel, I went in way early with 8 scheduled return flights this year to LAX cancelled.

Bet you're glad to be back in N.Z. mate. Handling the Covid 19 situation just "a little" better than the US :eek2: Might be quite a while before you get to drive your BMW M5 Competition back in the states. Hope you have something pretty good here to keep you amused.

[thedrunkfish]

Self entitled to expect the basic ideals of the fair trading act to apply.

This company was never a shining star..Chinesekiwi sets out just one of these lovely management & union maneuverings and any long time customer knows the experience has been deteriorating for years pre covid-19.

If you haven't notice thousands of talented and hard working people have had their lives turned upside down right throughout the country, many with in essence no income while in AIR we have staff employed in a company with no work for them and no ability to afford. Except from Government support. Basically many cases of six figure by proxi wage subsidy. I pay six figures in tax and this is what it is wasted on.

Oh well i guess you lads will be voting with your dollar and not traveling AIR ever again then.

[Stranger_Danger]

Oh well i guess you lads will be voting with your dollar and not traveling AIR ever again then.

Long term, who knows? I suspect the chances of flying Comrade Airlines, with a picture of Dearest Leader as the new logo, are not nil.

[Balance]

I put it to you that your post is anecdotal and opinionated without fact.

Your the one who sounds self entitled. The entire company has gone from a shining star to a shambles through no fault of its own. Sorry if you freinds didn't get a timely refund my heart bleeds but thousands of talented and hard working people have had their lives turned upside down through no wrong doing and I won't agree with someone slandering their reputation because of a single source report of poor service.

Agree with you wholeheartedly, thedrunkfish.

https://www.stuff.co.nz/travel/news/117689128/air-new-zealand-wins-back-airline-of-the-year-award

"AirlineRatings.com editor-in-chief Geoffrey Thomas said New Zealand's national carrier topped nearly every category this year, saying it "punches well above its weight" and "is the industry's leading benchmark".

As to the government losing out on Air NZ, the company has paid $1.453b in dividends and over $1.6b in taxes to the NZ government since it was bailed out (due to unquestionably gross mismanaged and skulduggery by the Ozzies) in 2000. Not bad for a $850m investment which has been reduced to $485m due to the partial selldown in 2013.

[RTM]

Agree with you wholeheartedly, thedrunkfish.

https://www.stuff.co.nz/travel/news/117689128/air-new-zealand-wins-back-airline-of-the-year-award

"AirlineRatings.com editor-in-chief Geoffrey Thomas said New Zealand's national carrier topped nearly every category this year, saying it "punches well above its weight" and "is the industry's leading benchmark".

As to the government losing out on Air NZ, the company has paid $1.453b in dividends and over $1.6b in taxes to the NZ government since it was bailed out (due to unquestionably gross mismanaged and skulduggery by the Ozzies) in 2000. Not bad for a $850m investment which has been reduced to $485m due to the partial selldown in 2013.

Wasn't so long ago that the Beagle was waxing lyrical about Air New Zealand, the economies of a new fuel efficient fleet, less CAPEX looking forward, management etc etc. You've really got to understand about the personalities of posters before you factor in their "advice" to your decisions. Guess that applies to us all !

[Beagle]

Interesting BlackPeter. Admit that I've just provided one of those "buying opportunities" - I sold out of AIR yesterday. Have held for ages, but I remember the impact of the SAARS, and thought it was better to be prepared for the downside. Suspect the cash will end up in the Finance sector...more specifically the HGH sector :-)!


I've done the same. Sold all my AIR shares a couple of days ago and very likely to end up in the same place as yours, despite HGH being 21.5% of my NZX portfolio already.


I posted a couple of weeks back I saw AIR as primarily a yield stock with little prospect for capital gain. At that time if I remember correctly the price was in the mid - late 280's. I think in the late 290's now with recent developments some caution is warranted and I see some modest potential downside risk from here so as a capital preservation measure I also liquidated my small position today. It will be interesting to see how Greg Foran gets on with the unions given his reputation for cost cutting. I'll watch from the sidelines for a while.


Wasn't so long ago that the Beagle was waxing lyrical about Air New Zealand, the economies of a new fuel efficient fleet, less CAPEX looking forward, management etc etc. You've really got to understand about the personalities of posters before you factor in their "advice" to your decisions. Guess that applies to us all !

Above posts are from late January 2020 when the smart money got out at close to $3. Crikey mate, you think things might have changed just a "little bit" with Covid 19 ?
I think the people noted above can allow themselves a small pat on the back as it took until April 2020 for the legend Warren Buffet to wake up and smell the coffee !
I'm disappointed with your post, that's a pretty cheap shot. All anyone can do is call it as they see it and when business conditions change dramatically take the appropriate action in a timely manner to preserve their capital. Those who didn't take action in a timely manner suffered the consequences, including Warren Buffet !

[Raz]

Oh well i guess you lads will be voting with your dollar and not traveling AIR ever again then.


Thats the other fun fact, during normal times they have a monopoly on a good number of sectors, where they have serious competition they have bailed. i.e London route

Protected people at the expenses of the tax payers and customers..except for the health professionals can't think of any larger higher paid group. Most lost protection through the deregulation, that was over 30 years ago..time to jump into the real world.

On the overall tax contribution..who pays for that unless financial engineered..yes the customer.

[Beagle]

Thats the other fun fact, during normal times they have a monopoly on a good number of sectors, where they have serious competition they have bailed. i.e London route

Protected people at the expenses of the tax payers and customers..except for the health professionals can't think of any larger higher paid group. Most lost protection through the deregulation, that was over 30 years ago..time to jump into the real world.

On the overall tax contribution..who pays for that unless financial engineered..yes the customer.

Some airlines have scrapped their entire 777 and others their A380 fleet. Scrapping all 777's would be a good way to extricate the company from legacy elite payment contracts where pilots earn around $500K a year. 777's probably as good as useless for years anyway.

[Balance]

Thats the other fun fact, during normal times they have a monopoly on a good number of sectors, where they have serious competition they have bailed. i.e London route

Protected people at the expenses of the tax payers and customers..except for the health professionals can't think of any larger higher paid group. Most lost protection through the deregulation, that was over 30 years ago..time to jump into the real world.

On the overall tax contribution..who pays for that unless financial engineered..yes the customer.

No complaints from this passenger - plenty of competition out there these days, on international routes and main domestic routes. Where do they have monopoly routes - name 1.

The advantage of flying Air NZ (as in all national carriers) is direct non-stop flights - one pays more for the convenience and that's a fair enough choice.

Plus, I also know many Air NZ staff and they don't have a bad word to say about the airline. Some have been made redundant but having been there for decades, they saw the writing on the wall years ago when the airline started hiring crew from Asia at significantly lower costs and outsourced more and more of their servicing requirement. All airlines with a high cost structure competing against the budget airlines had to do the same. The smart ones diversified their risk from solely relying on Air NZ income a while ago - by investing in other businesses and up-skilling themselves.

[Raz]

No complaints from this passenger - plenty of competition out there these days, on international routes and main domestic routes. Where do they have monopoly routes - name 1.

The advantage of flying Air NZ (as in all national carriers) is direct non-stop flights - one pays more for the convenience and that's a fair enough choice.

Plus, I also know many Air NZ staff and they don't have a bad word to say about the airline. Some have been made redundant but having been there for decades, they saw the writing on the wall years ago when the airline started hiring crew from Asia at significantly lower costs and outsourced more and more of their servicing requirement. All airlines with a high cost structure competing against the budget airlines had to do the same. The smart ones diversified their risk from solely relying on Air NZ income a while ago - by investing in other businesses and up-skilling themselves.

Thought i was on your ignore list. NZ Regional sectors and especially AKL-LAX are in essence a monopoly.

I think everyone in NZ knows at least someone working at AIR. I also know staff at AIR and in particular the engineering division, I have yet to find someone who has kind words for airline management. Still they have a rather well paid union deal:)

Middle management have golden hand cuffs and lower level staff are really nice yet paid a premium for their work and they are thankful.

Know three pilots, they could not earn the same overseas they tell me.

The executives lived rather large pre covid-19 in Queenstown on the company tab. Many people perceive they have an entitled culture and drinking with them and socialising in the past... I would tend to agree. What the company paid for perks compared to what was acceptable when i was an executive for a public company ten years ago... was rather excessive.

[Raz]

Above posts are from late January 2020 when the smart money got out at close to $3. Crikey mate, you think things might have changed just a "little bit" with Covid 19 ?
I think the people noted above can allow themselves a small pat on the back as it took until April 2020 for the legend Warren Buffet to wake up and smell the coffee !
I'm disappointed with your post, that's a pretty cheap shot. All anyone can do is call it as they see it and when business conditions change dramatically take the appropriate action in a timely manner to preserve their capital. Those who didn't take action in a timely manner suffered the consequences, including Warren Buffet !

Warren wanted out, his parcels were just too large to shift:)

[Beagle]

Warren wanted out his parcels were just too large to shift:)

Yes I suspect that's exactly what slowed him down and a timely reminder that small investors have one (and only one) key advantage over institutions with large holdings, the ability to be nimble and liquidate quickly when circumstances warrant it. This one key advantage was wasted by some on here.

Coutts wanted me to post that what he finds most offensive was the cancellation by AIR of tens of thousands of customers bookings. Then saying they will give you a credit but not doing so. Those bookings were cancelled even though the flights were still going ahead at exactly the same times for goodness sake !! Customers who wanted to go (and avail themselves of pre-booked and prepaid hotel and rental car arrangements that are often non refundable had to re-book on exactly the same flights at several times the price.

How is this legal ? Is this not a form of commercial extortion ? How is this not a blatant breech of the Fair Trading Act ? They are forcing people to pay several times the price otherwise they lose thousands of dollars of prepaid hotel bookings. This meets the definition of commercial extortion. AIR still have a compass on their aircraft but they have completely lost their moral and ethical compass. Customers will remember the way they are being treated for many years to come.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12330512

[Raz]

Yes I suspect that's exactly what slowed him down and a timely reminder that small investors have one (and only one) key advantage over institutions with large holdings, the ability to be nimble and liquidate quickly when circumstances warrant it. This one key advantage was wasted by some on here.

Coutts wanted me to post that what he finds most offensive was the cancellation by AIR of tens of thousands of customers bookings. Then saying they will give you a credit but not doing so. Those bookings were cancelled even though the flights were still going ahead at exactly the same times for goodness sake !! Customers who wanted to go (and avail themselves of pre-booked and prepaid hotel and rental car arrangements that are often non refundable had to re-book on exactly the same flights at several times the price.

How is this legal ? Is this not a form of commercial extortion ? How is this not a blatant breech of the Fair Trading Act ? They are forcing people to pay several times the price otherwise they lose thousands of dollars of prepaid hotel bookings. This meets the definition of commercial extortion. AIR still have a compass on their aircraft but they have completely lost their moral and ethical compass. Customers will remember the way they are being treated for many years to come.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12330512


I know... its horrific and have not added details that I know of over and above this. How could you plan a flight with any assurance given their actions of late in the current environment.

[westerly]

Warren wanted out, his parcels were just too large to shift:)

Ignored his own advice. https://www.forbes.com/sites/tedreed/2020/05/03/for-a-smart-investor-warren-buffett-has-slipped-up-when-it-comes-to-airlines/#135d37c7745b

westerly

[Balance]

I know... its horrific and have not added details that I know of over and above this. How could you plan a flight with any assurance given their actions of late in the current environment.

Current - operative word.

Airline - how are other airlines managing the current environment, handling customer complaints & flight disruptions?

[Mr Slothbear]

Executive team getting a prune from 9 to 6.
https://www.stuff.co.nz/business/industries/121601999/coronavirus-air-new-zealand-executive-team-slashed

[Miway]

I had fare bookeed for Europe with Qatar in August I cancelled in mid April. via travel agent.
Was offered rebooking at no extra cost plus able to change destination with up to 5000 extra km, or take a credit with a voucher for an extra 10% above what I'd paid, or take a full cash refund.
I took the full cash refund and it appeared on my credit card within 24 hours. Couldnt ask for better service.
Current - operative word.

Airline - how are other airlines managing the current environment, handling customer complaints & flight disruptions?

[Benny1]

Some airlines have scrapped their entire 777 and others their A380 fleet. Scrapping all 777's would be a good way to extricate the company from legacy elite payment contracts where pilots earn around $500K a year. 777's probably as good as useless for years anyway.

9000 been laid off from Rolls Royce, good luck with getting the 787 engines serviced in a timely manager in the future... If AIR puts all its faith in the current 787 fleet going forward then good luck to them!

[Beagle]

9000 been laid off from Rolls Royce, good luck with getting the 787 engines serviced in a timely manager in the future... If AIR puts all its faith in the current 787 fleet going forward then good luck to them!

Yeah I saw that on CNBC yesterday, was pretty savage eh.

You fix em mate so I think what you're trying to tell us is they're a nightmare liner in more ways than just the engines :eek2:

Interesting little snippet at the end of this announcement https://www.nzx.com/announcements/353578 Executive team downsized but wait there is more...
"Mr Foran will now commence a review of the airline’s Senior Leadership Team".

One wonders if pilots earning ~ $500K aren't next in line after that for the next stage of the review process ?

[clip]

I'll be voting with my money, my airNZ fare said I could cancel online with a cancellation fee of approx 20% of the total fare. After 3 calls I could not cancel or get a refund, and no credit yet as my flight is in July. I love the airNZ planes and service however this has put me off flying with them completely for at least the next year. I will likely begrudgingly return to them if they make it through, but for the time being, not a chance.

[winner69]

Dreamliners ...once broken never fixed

A lemon always a lemon

[Beagle]

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12334254 Looks like a really "fun and safe" experience flying.

[BlackPeter]

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12334254 Looks like a really "fun and safe" experience flying.

Lets face it - people are people. Just passing a school a couple of days ago and seeing large groups of kids sitting bum to bum and face to face in the play ground. I don't think we can blame AIR for all attributes of homo so called sapiens.

As well - even if there is still community spread in NZ (which is possible, but not likely) ... the spread in a plane would be significantly lower than e.g. in a church congregation going through their usual songs (even with 2 m distance between singers).

Still - they obviously could better control the disembarkation process and I can't fathom why AIR are not able to provide masks for the passengers who still want to protect themselves.

[winner69]

Industry talk -

One of the questions during last weeks’ OAG webinars was from a New York-based corporate travel agent. He suggested that after 9/11 the people who got back on planes were considered “brave” but with COVID-19 those returning to the skies are deemed “careless”. It’s an interesting observation and highlights the important role that public perceptions about the safety of flying will play in helping the aviation sector return to some semblance of normalcy. Of course, what is really needed is that the public become confident travellers once again.


https://www.oag.com/blog/brave-careless-or-confident-getting-back-in-the-air?utm_source=hs_email&utm_medium=email&utm_content=88290981&_hsenc=p2ANqtz-8x6uOaMff7ssPM4CSRX6Lbm2diq6au6SavRw-GFfS2g9uvLUD6AYqcO41IQUEx_em735-ObnZ-HHI1fYuTPe1qEIekHQ&_hsmi=88290981

[Beagle]

Lets face it - people are people. Just passing a school a couple of days ago and seeing large groups of kids sitting bum to bum and face to face in the play ground. I don't think we can blame AIR for all attributes of homo so called sapiens.

As well - even if there is still community spread in NZ (which is possible, but not likely) ... the spread in a plane would be significantly lower than e.g. in a church congregation going through their usual songs (even with 2 m distance between singers).

Still - they obviously could better control the disembarkation process and I can't fathom why AIR are not able to provide masks for the passengers who still want to protect themselves.

I would expect AIR's staff to provide a controlled and safe embarkation and disembarkation process.
AIR, the so called premium airline where you book a window seat and hope they leave the middle seat vacant, bring your own hand sanitizer, antibacterial wipes because who really knows when they last cleaned the armrests, mask, gloves, water, snack and magazine and huddle in your seat until everyone else has disembarked to try to stay safe. No evidence that I know of to support the theory you suggested in your second paragraph.

[BlackPeter]

No evidence that I know of to support the theory you suggested in your second paragraph.

No evidence?

Try with the official government numbers. When was the last time we had a new Covid 19 case which they could not link to either an existing cluster or to overseas travel? Must be at least four weeks or so ago.

What is the typical incubation period? - 5 to 7 days.

So - what is the likelihood of community infection still going on?

[Baa_Baa]

So - what is the likelihood of community infection still going on?

Roughly 5 one thousandths percentage of the population has the virus currently and they should be in isolation recovering. My view is that is safe enough to go to level one and resume all business, including air travel with no restrictions or distancing within New Zealand.

[Beagle]

the spread in a plane would be significantly lower than e.g. in a church congregation going through their usual songs (even with 2 m distance between singers).BP

No argument with what you said about community transmission now being unlikely but where is your evidence to support this bold claim. I would have no reservations about going back to church with 2m distancing but have serious reservations about getting on a plane anytime soon with their so called social distancing.

[Sideshow Bob]

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12334254 Looks like a really "fun and safe" experience flying.

Clearly separation on Air NZ is not social distancing separation of 1 metre.....

Sitting in the window, the aisle seat is less than 1 metre. Someone in the seat behind is less than 1 metre. Someone in front is less than 1 metre.

Any of them sneeze...…

But in my books, if you are really that worried, then don't get in a metal tube with complete strangers to fly the length of the country.

[Beagle]

Agree 100% and that's the reason a lot of people won't fly for the foreseeable future. Plenty of interesting places you can comfortably drive too in N.Z. My north island favorite is Taupo.

[Sideshow Bob]

Agree 100% and that's the reason a lot of people won't fly for the foreseeable future. Plenty of interesting places you can comfortably drive too in N.Z. My north island favorite is Taupo.


Personally I'd be reasonably relaxed hopping on a domestic flight currently. But then again I don't really NEED to go anywhere.

Most of my travel is for work, and business travel is going to be reined right in by a lot of businesses - questioning whether people really NEED to travel, and now people are more use to Zoom/Skype/MS Teams etc and that video conferencing can work sufficiently. Then there is the economic situation and many firms being (or going to be) under the pump.

[Raz]

Personally I'd be reasonably relaxed hopping on a domestic flight currently. But then again I don't really NEED to go anywhere.

Most of my travel is for work, and business travel is going to be reined right in by a lot of businesses - questioning whether people really NEED to travel, and now people are more use to Zoom/Skype/MS Teams etc and that video conferencing can work sufficiently. Then there is the economic situation and many firms being (or going to be) under the pump.

It actually been great to get away from the grind of the international flights for work...the SI has plenty to do and a only a few hours away via car. Enjoying the difference.

[Beagle]

Personally I'd be reasonably relaxed hopping on a domestic flight currently. But then again I don't really NEED to go anywhere.

Most of my travel is for work, and business travel is going to be reined right in by a lot of businesses - questioning whether people really NEED to travel, and now people are more use to Zoom/Skype/MS Teams etc and that video conferencing can work sufficiently. Then there is the economic situation and many firms being (or going to be) under the pump.

Yeah I expect there will be a lot more virtual meetings in future which will undermine the most lucrative part of AIR's business.

[Sideshow Bob]

Yeah I expect there will be a lot more virtual meetings in future which will undermine the most lucrative part of AIR's business.

Yes, business travel often at relatively short-notice, and much, much less sensitive to price than leisure market. Know I've paid some eye-watering fares in the recent past because I "have" to be there and no other workable options to travel than AIR.

But having said that - travel is relatively never been cheaper (at least pre-Covid).

Would normally do 2-3 long haul and then say 12 domestic trips per annum for business. Our business would have saved a fortune in recent months.

[Beagle]

Yes, business travel often at relatively short-notice, and much, much less sensitive to price than leisure market. Know I've paid some eye-watering fares in the recent past because I "have" to be there and no other workable options to travel than AIR.

But having said that - travel is relatively never been cheaper (at least pre-Covid).

Would normally do 2-3 long haul and then say 12 domestic trips per annum for business. Our business would have saved a fortune in recent months.

Virtual meetings are not so bad these days. I bought Mrs Beagle a lovely Hewlett Packard state of the art system with super high resolution huge 27 inch screen just before the lockdown. The screen is so big and crystal clear its almost like "being there". I think there is going to be a real seismic shift in many companies perceptions about this form of virtual meeting being perfectly acceptable.
Can't even really shake hands in business safely yet anyway. As you say, business travel is often at very short notice and very high prices and the front end of planes is where the money is made.

[BlackPeter]

No argument with what you said about community transmission now being unlikely but where is your evidence to support this bold claim. I would have no reservations about going back to church with 2m distancing but have serious reservations about getting on a plane anytime soon with their so called social distancing.

Quite easy.
Plenty of examples for super spreaders being active in churches (or any religious congregations). I suppose I don't need to point to individual examples. On the other hand - I am not aware of many cases (if any) of active super spreader infecting significant numbers of other passengers in planes. Are you?

[Beagle]

Quite easy.
Plenty of examples for super spreaders being active in churches (or any religious congregations). I suppose I don't need to point to individual examples. On the other hand - I am not aware of many cases (if any) of active super spreader infecting significant numbers of other passengers in planes. Are you?

Were any of those church's practising 2 meter social distancing ? No, to the best of my knowledge they all started well before such measures were even thought of.

[BlackPeter]

Were any of those church's practising 2 meter social distancing ? No, to the best of my knowledge they all started well before such measures were even thought of.

Fair enough ... but then - I would not hold my breath that the typical church goer shows more discipline in social distancing than the typical air traveler (that's where we started). How should they? At the end it is the same people.

Given that there are several examples of super spreaders in quires where most members got sick after one performance with super spreader (and they could not possibly all have stood less than 2 m to the relevant Covid 19 spreader) do I still maintain that attending a church service - even with social distancing - is in my view less safe than going on a plane.

Obviously - the dangerous activities when attending a service are any social contacts as well as singing and chanting (which propels virus infected droplets well beyond the 2 m boundary). If the congregation refrains from social contacts (like handshaking, embracing, kissing, ...) as well as from singing and / or chanting (or if they use properly applied masks throughout the service), then I agree - going to a church should not be more dangerous than going on a plane :):

[pierre]

Yeah I expect there will be a lot more virtual meetings in future which will undermine the most lucrative part of AIR's business.

Yep - the business travel issue will definitely have an impact, but I suspect that in the past many seats at the sharp end were also filled by old farts like me (and my wife, who doesn't fart - or so she says) on leisure trips.

We've canned out of three business class return flights with AIR this year due to Covid. We'll definitely fly to Oz or the Islands once those bubbles are open but it will be quite a while before we are thinking about venturing much further - even if they start flying to other countries.

That's a double whammy for AIR and why I sold my modest holding a while back - admittedly at a loss - but I think there's a bigger one coming.

[Sideshow Bob]

https://www.nzx.com/announcements/353696 (https://www.nzx.com/announcements/353696)

Liquidity update

[winner69]

Still got $600m in the bank and haven’t to spend government money

That’s good

Share price might head back to $2

[bull....]

they burn thru all there cash in approx 5 mths on current projections then will need to start using the govt 900 m loan. also it doesnt take account of a second covid wave meaning moving up lockdown levels again in the future

[Sideshow Bob]

Still got $600m in the bank and haven’t to spend government money

That’s good

Share price might head back to $2

Then again, it might not......are you just trying to pump life into it W69?

[whatsup]

Re todays market update.

The reduction of the top table and director salaries/fees is a joke to my mind, under the circumstances a 50% reduction is more in line with what is necessary, this company is in a survival situation at present even if the fish heads cannot recognise that !!!.

[Sideshow Bob]

800 staff going at Fiji Airlines.

https://www.odt.co.nz/business/close-800-fiji-airways-staff-laid (https://www.odt.co.nz/business/close-800-fiji-airways-staff-laid)

[stoploss]

Still got $600m in the bank and haven’t to spend government money

That’s good

Share price might head back to $2
If they are going that well , surely they will be able to negotiate a better loan package :)

[Beagle]

Re todays market update.

The reduction of the top table and director salaries/fees is a joke to my mind, under the circumstances a 50% reduction is more in line with what is necessary, this company is in a survival situation at present even if the fish heads cannot recognise that !!!.

Interesting contrast with closest competitor Qantas where many of the senior executives are not taking any salary at all for the next few months.

Better update than I expected BUT it is clear this company faces a monumental sized challenge to get through this so I remain of the view it will need recapitalisation at some point...but it will be later than I expected.

[silverblizzard888]

Had over a $1 billion, after about two months they have $640 million left. Assumption is they have on average burnt $200 million per month.

Add in cost savings and I'd say they will be about $150 million per month burn, which means they have 4 more months to burn on the current amount, maybe 5-6 months if domestic flights and cargo delivery volumes do well.

Not too bad on the cash burn, but at the end of the day its a business and on the business side of things its been chucked into a metal compactor and come out like a small cube.

[winner69]

Then again, it might not......are you just trying to pump life into it W69?

Apparently sharesies drive the AIR price ......this announcement to them says AIR not going broke ..govt haven’t had to bail them out and things are getting busier and they cutting costs ...all good ,.. no worries

[Balance]

Apparently sharesies drive the AIR price ......this announcement to them says AIR not going broke ..govt haven’t had to bail them out and things are getting busier and they cutting costs ...all good ,.. no worries

Bumped into one of my Air NZ friends yesterday. It has been very brutal at the airline as he put its - 2 out of 3 senior crew staff have lost their jobs in his section (international crew).

Sounds like AIR is indeed taking the opportunity to cut back on 'expensive' staff to reduce future staff & crew cost when services build up again.

[Cyclical]

Bumped into one of my Air NZ friends yesterday. It has been very brutal at the airline as he put its - 2 out of 3 senior crew staff have lost their jobs in his section (international crew).

Sounds like AIR is indeed taking the opportunity to cut back on 'expensive' staff to reduce future staff & crew cost when services build up again.

Yeah, sounds like they are managing the situation better than some of us have been giving them credit for. And if they can get that trans tazzie bubble happening, they might just be able to squeak through without delving too deep, be that government loan or capital raise.

[Justin]

how much cash they have to burn each month nowaday

[Raz]

Yeah, sounds like they are managing the situation better than some of us have been giving them credit for. And if they can get that trans tazzie bubble happening, they might just be able to squeak through without delving too deep, be that government loan or capital raise.

I tend to agree better than expected, i guess more funded by customers credits at this time which only squares off if they cancel them, substantial overhang on future operations if they honor them. Few businesses could run two years on 70% head count (when they actually get to that point) when turnover is minimal for months, debatable 6-12 months and yet they forecast to be only coming up to 70% in two years time, as I understand it.

[Beagle]

I tend to agree better than expected, i guess more funded by customers credits at this time which only squares off if they cancel them, substantial overhang on future operations if they honor them. Few businesses could run two years on 70% head count (when they actually get to that point) when turnover is forecast to be only coming up to 70% in two years time, as I understand it.

Probably why in the announcement it was made clear that further headcount reduction is pending, or words to that effect. It could turn out that Foran with all his experience with cutting costs might be the right man for the job but the headwinds this company is facing are really fierce, no question about that.

[Raz]

So consumer NZ is requesting credit refunds and would like to see 50% reduction in headcount. Good on them, about the only group actually looking at this objectively in the media.

[Zaphod]

So consumer NZ is requesting credit refunds and would like to see 50% reduction in headcount. Good on them, about the only group actually looking at this objectively in the media.

Agree with Consumer on the refunds, however they are well outside their realm of expertise & raison d'etre calling for a 50% reduction in headcount.

[Beagle]

Agree with Consumer on the refunds, however they are well outside their realm of expertise & raison d'etre calling for a 50% reduction in headcount.

Maybe so but keeping 70% of staff when you have 10% of your business left on the basis that you simply hope your business will be back to 70% in two years time looks like a plan destined to destroy a vast amount of shareholders funds in the next two years to me.

[Jaa]

Seem Beagle et al have been overly pessimistic, even hysterical. So let me give the optimistic case.

Impressive they have kept the fuel hedge losses to only $90m. Was wondering what the effect of all those reparation and cargo flights was. Even if only break-even they help use up the fuel hedge.

Also impressive they still have $640m in the kitty after almost 10 weeks of severe restrictions and no covenant or near term debt repayment issues. $640m could last 6+ months.

By Nov/Dec:


NZ sould be at level 1 with no more social distancing or fear of domestic travel allowing the middle seats to be filled and a profitable domestic network to reemerge.
Tasman and Pacific bubble could be in operation
Near instant COVID-19 tests both on departure and on arrival could see home quarantine replace quarantine in hotels with bracelets and tracking aps. Have a look at what Hong Kong is doing to see how this could work. Thus allowing resumption of more international flights and greater international demand.
The efficacy of potential vaccines should be better understood and thus an end date could be in sight (even if still over a year away). The share market is always forward looking.


Under such conditions and with plenty of financial runway things won't look so bad. Air NZ will then be able to reorganise their debt to avoid using the usurious government loan and/or have a sensibly priced pro-rata rights issue if need be.

[Zaphod]

Maybe so but keeping 70% of staff when you have 10% of your business left on the basis that you simply hope your business will be back to 70% in two years time looks like a plan destined to destroy a vast amount of shareholders funds in the next two years to me.

Do we absolutely know that they will retain 70% of staff though? This seems to be an evolving situation for AirNZ where, as they have a better understanding of the, further decisions are made. Committing to a figure like 50% seems rash and arbitrary. IMO Consumer would have been better to simply emphasize their concern over reining in costs as best they can, within the context of protecting the consumer.

[Beagle]

Seem Beagle et al have been overly pessimistic, even hysterical. So let me give the optimistic case.

Impressive they have kept the fuel hedge losses to only $90m. Was wondering what the effect of all those reparation and cargo flights was. Even if only break-even they help use up the fuel hedge.

Also impressive they still have $640m in the kitty after almost 10 weeks of severe restrictions and no covenant or near term debt repayment issues. $640m could last 6+ months.

By Nov/Dec:


NZ sould be at level 1 with no more social distancing or fear of domestic travel allowing the middle seats to be filled and a profitable domestic network to reemerge.
Tasman and Pacific bubble could be in operation
Near instant COVID-19 tests both on departure and on arrival could see home quarantine replace quarantine in hotels with bracelets and tracking aps. Have a look at what Hong Kong is doing to see how this could work. Thus allowing resumption of more international flights and greater international demand.
The efficacy of potential vaccines should be better understood and thus an end date could be in sight (even if still over a year away). The share market is always forward looking.


Under such conditions and with plenty of financial runway things won't look so bad. Air NZ will then be able to reorganise their debt to avoid using the usurious government loan and/or have a sensibly priced pro-rata rights issue if need be.

I sold at $2.98 in late January 2020 and then went short to boot, generating another ~ $1.50 per share in unrealized profit, so far. With results like that maybe I should be overly pessimistic more often :p
Yes today's cash balance was surprising but then the way they have been disingenuously abusing customers rights lately by promising to issue credits is quite another thing.
It looks like they have burned circa $360m in the last 2 months, so ~ $180m per month. Maybe they can get this down to ~ $120m a month or thereabouts so their $640m might last them almost the 6 months you suggest depending upon how many more expensive redundancies they have to do. I still see a capital raise sometime this year. At what price is the key question.
Too early to talk about losses in calendar 2021 but I think anyone hoping they actually make a profit that year is literally flying that hope on a wing and a prayer.
The size of the loss for the year ended 30/06/2020 inclusive of all extraordinary items is going to be eye watering. I think it will take NTA down below $1 and then there's plenty of losses to come for the rest of this year and probably 2021 as well.

Its not hard to make the case that minority shareholders are in for a very hard landing. Buffet is dead right even if he was very slow to act. This is an industry facing what amounts to an existential threat. Even when this threat is over how long until the next pandemic ? Why would you bother...

[Waltzing]

Well MR B i did not follow you out until 2.0 talking a 1 dollar loss. Profits i had made on OCA. I dont expect to fly to europe again until 2022. But this time on business rather than pleasure. I hope you are right on this one and i agree a cap raise is surely on the cards? Anyone caluclated the likely income for the next 12 months since a vacine wont be available until 2021 for most of the public. Manufactured supply is surely not going to meet demand. Its not as if only people travelling will want the vacine. Thats the real problem and Air travel will return faster than 9/11 if a vacine is out there by 2022. I dont see it as 5 years for travel to return surely 2 and half.

[Jaa]

I sold at $2.98 in late January 2020 and then went short to boot, generating another ~ $1.50 per share in unrealized profit, so far. With results like that maybe I should be overly pessimistic more often :p
Yes today's cash balance was surprising but then the way they have been disingenuously abusing customers rights lately by promising to issue credits is quite another thing.
It looks like they have burned circa $360m in the last 2 months, so ~ $180m per month. Maybe they can get this down to ~ $120m a month or thereabouts so their $640m might last them almost the 6 months you suggest depending upon how many more expensive redundancies they have to do. I still see a capital raise sometime this year. At what price is the key question.
Too early to talk about losses in calendar 2021 but I think anyone hoping they actually make a profit that year is literally flying that hope on a wing and a prayer.
The size of the loss for the year ended 30/06/2020 inclusive of all extraordinary items is going to be eye watering. I think it will take NTA down below $1 and then there's plenty of losses to come for the rest of this year and probably 2021 as well.

Its not hard to make the case that minority shareholders are in for a very hard landing. Buffet is dead right even if he was very slow to act. This is an industry facing what amounts to an existential threat. Even when this threat is over how long until the next pandemic ? Why would you bother...

Putting the nauseating bragging aside (many people sold in the 290s you know), you are assuming status quo in a very dynamic situation and thus have failed to engage with any of my potentially positive points.

Air NZ saw their revenue start to drop in March and withdrew their guidance on March 9, so I would say its more like $360m over 2.5 months or about 144m a month. So after the cost reductions, maybe a cash burn of $85m a month which gives 7.5 months of financial runway.

I highly doubt by November their monthly cash burn is anything like $120m or even $85m as revenue is already recovering.

[Raz]

Putting the nauseating bragging aside (many people sold in the 290s you know), you are assuming status quo in a very dynamic situation and thus have failed to engage with any of my potentially positive points.

Air NZ saw their revenue start to drop in March and withdrew their guidance on March 9, so I would say its more like $360m over 2.5 months or about 144m a month. So after the cost reductions, maybe a cash burn of $85m a month which gives 7.5 months of financial runway.

I highly doubt by November their monthly cash burn is anything like $120m or even $85m as revenue is already recovering.

You hope for the best yet plan for the worst, oh thats right the Government will not allow the worst so don't have to plan for that. Cashflow wise revenue will recover yet cashflow will lag given how quickly people want to offload their credits. We are not getting the full financial picture for a reason. Headcount numbers have not changed to date from initial number suggested. i can tell you if this was a public list company in the US, with no union contract restraints the loss of jobs would be way higher at the minute. Look at what Qantas has done in comparison even with a unionised work force. There is political inertia.

[iceman]

LATAM files for bankruptcy protection. Not really what frequent travellers between South America and Oceania want to hear, after AIR pulling out
https://www.reuters.com/article/us-latam-airlines-bankruptcy/latin-americas-largest-airline-latam-files-for-u-s-bankruptcy-protection-idUSKBN2320GT

[Snow Leopard]

You still grounded in South America, iceman?

[Joshuatree]

World of pain for Airlines

German government takes 20% stake in $10B Lufthansa bailoutwww.upi.com › Top_News › World-News › 2020/05/25 (https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwiPo8qUpdHpAhUOVH0KHSiBBsAQFjACegQICxAG&url=https%3A%2F%2Fwww.upi.com%2FTop_News%2FWorld-News%2F2020%2F05%2F25%2FGerman-government-takes-20-stake-in-10B-Lufthansa-bailout%2F4121590435680%2F&usg=AOvVaw0jumoBZxI6_Tnwsx5zOFlk)

[Sideshow Bob]

April Ops stats should be out in the next couple of days - should be interesting reading (in a morbid, red ink way)....

[iceman]

You still grounded in South America, iceman?

Floated more like. But yes still here, until Sept by the looks but need LATAM to keep flying !!

[Balance]

https://www.marketwatch.com/story/airline-stocks-are-soaring-tuesday-here-are-wall-streets-favorites-2020-05-26

Airline stocks are soaring.

[BlackPeter]

https://www.marketwatch.com/story/airline-stocks-are-soaring-tuesday-here-are-wall-streets-favorites-2020-05-26

Airline stocks are soaring.

Well, looks like an uptrend to me - and very relevant to world wide air travel:

https://www.worldometers.info/coronavirus/worldwide-graphs/#daily-cases

Airlines are currently driven by the same fundamentals as crypto currencies.

[traineeinvestor]

Nowhere near enough to stop the haemorrhaging but it's a little but of good news:

https://www.newshub.co.nz/home/travel/2020/05/air-new-zealand-adds-business-timed-flights-to-regional-schedule.html

[gbogo]

Jardens new lower target of 84c.

[Beagle]

LATAM files for bankruptcy protection. Not really what frequent travellers between South America and Oceania want to hear, after AIR pulling out
https://www.reuters.com/article/us-latam-airlines-bankruptcy/latin-americas-largest-airline-latam-files-for-u-s-bankruptcy-protection-idUSKBN2320GT

All the best with getting home mate.

[Beagle]

Jardens new lower target of 84c.

That will be their 12 month price target so with no dividends for the foreseeable future that suggests fair value now given an appropriate equity risk is 84 less 10% =75.6 cents.
3 analysts rate it SELL https://www.marketscreener.com/AIR-NEW-ZEALAND-LIMITED-6491407/consensus/

Jarden expect AIR will need to tap into the Govt loan by sometime in this coming Oct - December 2020, (FY21), quarter and are predicting a loss for the current financial year of over $700 million ! (followed by another big loss in FY21) https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12335179

[Beagle]

You hope for the best yet plan for the worst, oh thats right the Government will not allow the worst so don't have to plan for that. Cashflow wise revenue will recover yet cashflow will lag given how quickly people want to offload their credits. We are not getting the full financial picture for a reason. Headcount numbers have not changed to date from initial number suggested. i can tell you if this was a public list company in the US, with no union contract restraints the loss of jobs would be way higher at the minute. Look at what Qantas has done in comparison even with a unionised work force. There is political inertia.

Yeap, 25,000 of the 30,000 work force redundant or on leave without pay. Very impressive considering the strength of Australian unions. CEO and senior management on no or severely reduced pay. Qantas is a company being run impressively and appropriately for the current conditions. AIR is being run like a social welfare department for the elite. Too big to fail. Foran with have Grant Robertson on his speed dial.

[Cyclical]

Yeap, 25,000 of the 30,000 work force redundant or on leave without pay. Very impressive considering the strength of Australian unions. CEO and senior management on no or severely reduced pay. Qantas is a company being run impressively and appropriately for the current conditions. AIR is being run like a social welfare department for the elite. Too big to fail. Foran with have Grant Robertson on his speed dial.

Qantas need to also send a clear message to potential Virgin investors that there will be some stiff competition for those the dare take them on, not just some bloated kangaroo. Air NZ probably still think they are immune from such a threat...time will tell.

[Panda-NZ-]

Airlines are currently driven by the same fundamentals as crypto currencies.

Yep the QAN craze is pretty rediculous. plenty of new investors thinking they have better predictions than everyone else. It seems to be the new sportsbet/TAB.

[Chinesekiwi]

Thank you to all who sent PM's and comment after my last post.

After getting the boot I decided to drive (not fly lol) the daughter back to Vic Uni in Welly and make a road trip of it.

Spent a little in many of the small towns along the way - sharing the love, felt fun yet an almost futile gesture given the tsunami of damage coming our way.

Air NZ is a good employer and more than a company - an institution perhaps. I hope in time a better version of itself reemerges, one that is invest-able but that won't be anytime soon.

Foran and his team need to address why if LWOP is not put in place why 9000 stay on the payroll when operating at 10% or less capacity and with a grim ongoing outlook.
The 3500 gone or going are in large numbers the front line operators (pilots, airport managers, outstation operators, crew, engineers etc) whose numbers will re grow proportionately as operations kick up - the expense will roll back in (aligned with revenue).

QANTAS have already showed how to put an organisation to sleep so to speak. Air NZ is only now discussing furlough outcomes some 8 weeks into a Pandemic.

Air NZ always used the word nimble - bloated and stumbling may be more apt today.

[RTM]

Share price flying on hot air ? Saving AvGas ?

[Beagle]

Thank you to all who sent PM's and comment after my last post.

After getting the boot I decided to drive (not fly lol) the daughter back to Vic Uni in Welly and make a road trip of it.

Spent a little in many of the small towns along the way - sharing the love, felt fun yet an almost futile gesture given the tsunami of damage coming our way.

Air NZ is a good employer and more than a company - an institution perhaps. I hope in time a better version of itself reemerges, one that is invest-able but that won't be anytime soon.

Foran and his team need to address why if LWOP is not put in place why 9000 stay on the payroll when operating at 10% or less capacity and with a grim ongoing outlook.
The 3500 gone or going are in large numbers the front line operators (pilots, airport managers, outstation operators, crew, engineers etc) whose numbers will re grow proportionately as operations kick up - the expense will roll back in (aligned with revenue).

QANTAS have already showed how to put an organisation to sleep so to speak. Air NZ is only now discussing furlough outcomes some 8 weeks into a Pandemic.

Air NZ always used the word nimble - bloated and stumbling may be more apt today.

Great post and thank you for your insiders view. Still vast numbers of bloated pigs scoffing themselves silly at the AIR feeding trough. Do you get first dibs to be hired again if business eventually recovers back somewhere near previous level's ?

[winner69]

Still got $600m in the bank and haven’t to spend government money

That’s good

Share price might head back to $2

Heading towards $2 ...might get there sooner than most think

[Chinesekiwi]

Once I have severed my employment( ie received the final payout) I am more able to discuss - at the moment am bound by a contract so wouldn't want to jeopardise a smooth end to this relationship. It shouldn't be a suprise that companies of this size are aware of these forums and I have heard it alluded to in the HQ.

There is at the moment no path of return for certain employees - more information once I am a free spirit.:)

[Beagle]

Heading towards $2 ...might get there sooner than most think

What type of happy juice did you have with lunch ?

[winner69]

What type of happy juice did you have with lunch ?

Might get there before OCA gets to $1

[Beagle]

Might get there before OCA gets to $1

LOL it must have been something REALLY strong :p

[Cyclical]

LOL it must have been something REALLY strong :p

Closed out that short yet, Beagle? ;)

La la...

[Justin]

someone think its heading to $0.84 cents meanwhile someone think it’s heading to $2.0 dollar soon. :confused:

[Beagle]

Closed out that short yet, Beagle? ;)

La la...

No I'm hanging in there with dogged determination. Jarden's reckon its only worth 84 cents... I reckon less...70% of staff and 100% of equipment with just 10% of business has got to be the most "compelling" business plan of all NZX listed companies. This is the stuff of "legendary genius". What could possibly go wrong LOL

[peat]

No I'm hanging in there with dogged determination.

Are the day to day holding costs negative or positive?

[Beagle]

As its a private arrangement with a shareholder I'm sorry bit I'm not at liberty to provide specific details.

[Raz]

As its a private arrangement with a shareholder I'm sorry bit I'm not at liberty to provide specific details.

so they are trying to get the trans Tasman Bubble for the July school holidays open, as expected and highlighted in the media tonight, yet late last week AIR cancelled many people bookings for the school holidays to Aussie 🙄 right hand doesn’t seem know what the left hand is doing....

[Cadalac123]

No I'm hanging in there with dogged determination. Jarden's reckon its only worth 84 cents... I reckon less...70% of staff and 100% of equipment with just 10% of business has got to be the most "compelling" business plan of all NZX listed companies. This is the stuff of "legendary genius". What could possibly go wrong LOL

but everyone in real life is telling me to buy AIR for free money beagle, even people who haven't invested before - surely this means its easy money

[Baa_Baa]

but everyone in real life is telling me to buy AIR for free money beagle, even people who haven't invested before - surely this means its easy money

Remember when the taxi driver and the shoeshine boy tells you they’re buying shares … you do what? (Hint, it’s not buy)

[Jaa]

Guess Air NZ will qualify for the 8 week wage subsidy extension. That's another $48m or so.

[Snow Leopard]

....It shouldn't be a suprise that companies of this size are aware of these forums and I have heard it alluded to in the HQ....

Yes, I hear that they have Beagle on their 'no fly' list (again). :p

[peat]

Yes, I hear that they have Beagle on their 'no fly' list (again). :p

I heard they're happy to fly him - it just has to be a short flight.

[Beagle]

Yes, I hear that they have Beagle on their 'no fly' list (again). :p

LOL, I have them on my no fly list :p

[bull....]

on fire , this and thl standout performers last week or so

[winner69]

on fire , this and thl standout performers last week or so

On fire indeed ...could get to 2 bucks before OCA gets to 1 buck

[bull....]

On fire indeed ...could get to 2 bucks before OCA gets to 1 buck

ORR'S got yor back

[patrick]

someone think its heading to $0.84 cents meanwhile someone think it’s heading to $2.0 dollar soon. :confused:

If they meet the obligation to refund cash for cancelled flights things will be?
Not even refunding cash for flights they cancelled b4 Government intervention.Monopoly at its WORST!

[Beagle]

On fire indeed ...could get to 2 bucks before OCA gets to 1 buck

I think its a race to see which company gets to $1 first. Now that would be a fair contest :p

[Cyclical]

I think its a race to see which company gets to $1 first. Now that would be a fair contest :p

Haha, good one! In this "la la" market though, I wouldn't be brave enough to bet against winner69, even if my holdings suggest otherwise.

[iceman]

Talk of AIR scrapping their 777-200 and possible 300s as well. That could be one helluva write down.
I've done a lot of miles in these aircraft and they've been very reliable old workhorses https://www.stuff.co.nz/business/121655635/coronavirus-air-nzs-777200er-fleet-may-never-fly-again-due-to-the-impact-of-covid19

[Snow Leopard]

Story is that all 777's are being grounded for a year, possible old -200 ones will never fly in AIR livery again.
Just under 1,000 long haul crew to go.

So much uncertainty over time-frames and demand makes it impossible to put a current value on AIR.

17-April I posted that, that is like six weeks ago.

[iceman]

17-April I posted that, that is like six weeks ago.

My apologies. No way to keep up with all comments on ST and I just saw the article on Stuff today. Once again you're ahead of your time :-)

[Blue Skies]

Talk of AIR scrapping their 777-200 and possible 300s as well. That could be one helluva write down.
I've done a lot of miles in these aircraft and they've been very reliable old workhorses https://www.stuff.co.nz/business/121655635/coronavirus-air-nzs-777200er-fleet-may-never-fly-again-due-to-the-impact-of-covid19


Although Snow leopard previously posted this, current SP seems to indicate has been completely forgotten in last few weeks.
Good reminder for anyone tempted at these levels!

[Beagle]

They'd better be quick, looks like the plane graveyard at Alice Springs is filling up very quickly ! https://www.news.com.au/travel/travel-updates/health-safety/singapore-airlines-a380s-arrive-at-plane-graveyard-near-alice-springs/news-story/1827baca1b32f40a43d6222fd07cc4f6

[winner69]

Consumers surprised that only 6% of their subscribers who had cancelled flights got cash refund ..others got credits

Airline guru commentator says consumer just doesn't understand how airlines work....if they refunded everybody they'd be insolvent

Methinks the airline guru commentator doesn't understand morality or what insolvency means.

[Beagle]

So...its morally acceptable to issue flight credits which must be used in a tight timeframe, irrespective of whether one's circumstances have changed or not and irrespective of whether AIR now fly where you want to go and these credits are being issued by a company that is technically insolvent if it weren't for these credits they would be insolvent. This a company that's keeping 70% of its staff and presently doing 10% about of its business and that means the company is worth $2.

Houston, I think we have a problem...

[dobby41]

I don't really have a big problem with credits but I'd rather have the $10k they owe me in cash.
The problem I do have is that it seems that you can exchange a credit (based on booking reference) for 1 new booking. So if I have a credit for $1k and the new flights cost $600 I have lost $400 - very clever on their part.
I'm disappointed that you can't just use $ credits like $ AirPoints and do it on-line - just add a new total, Status Points, AirDollars and AirCredits.

[James108]

I agree that if they cannot deliver the service a refund should be offered (which I have received, for a trip to US).

However no one was complaining about airlines that were leveraged to the gills (both debt and operating leverage) during the relentless decrease in air fares over the last 30 years. Maybe this is the price consumers have to pay for being able to fly anywhere in the world for the cost of 2 weeks pay.

If airlines had to pay out I am sure many would indeed go insolvent, or be bailed out by the tax payer. I'm sure those living pay cheque to pay cheque would take a dim view on subsidising the jet setting class.

[peat]

but of course we'd be arguing the other way if it suited us, remember the T+C's of buying cheap airline tickets.

I agree its not morally fair but it is in the contract when purchasing right? Lets remember we support the rule of law.

[Jaa]

Talk of AIR scrapping their 777-200 and possible 300s as well. That could be one helluva write down.
I've done a lot of miles in these aircraft and they've been very reliable old workhorses https://www.stuff.co.nz/business/121655635/coronavirus-air-nzs-777200er-fleet-may-never-fly-again-due-to-the-impact-of-covid19

Mr Curly the analyst seems to be jumping to a conclusion a bit. If the leased aircraft fly back home, Air NZ are left with 4 777-300 and 4 777-200. Not great for an airline to maintain 4 of anything so he's probably right but the two types have mostly common parts and training.


The national carrier has seven 777-300ER with an average age of eight years and eight of the smaller 777-200ER which have an average age of nearly 14 years.

Four of the 777-300ER are owned and three are leased. Of the 777-200ER four are owned and four are leased. https://www.stuff.co.nz/business/121655635/coronavirus-the-air-nz-777200er-planes-which-may-never-fly-again

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12335472

Big Capital Raise predicted. Just for you Winner, Andy Bowley of Forsyth Barr has an underperform and a high risk rating and a price target of...have a guess, its either $1.00 or $2.00...sorry I won't give you a chocolate fish if you guess correctly because the answer is too easy ;)

[Raz]

So finally have some aussie flights cancelled, state will get confirmation of credits via email, two weeks late zip to date. Also note you cannot combine credits from different booking references and if three travelling on one booking reference, same deal... three must book and apply credit to each individual. Sounds heavy impair credits if thats what you really should call them...

[Beagle]

Agree, Air NZ has totally neglected looking after the customer with their tricky and unethical approach to credits. Acting like a monopoly, not like a company that cares about customers. Very different to what it once was. The decent thing to do would be to offer refunds or at the very least add credits to Airpoints total as you have suggested.

It saddens me to hear that AIR are not even issuing credits that can be used in a fair way and that's even if you want and can still afford to travel within the credits reasonable tight timeframe and that's assuming they still fly to somewhere you want to go ! What a load of complete nonsense and talk about actively sabotaging customer goodwill !!
Trouble with airpoints is it has lots of fine print and what amounts to force majeure clauses too. Off to Mitre Ten to see what I can spend my remaining airpoints on this weekend before they make some strategic "customer focused" changes there :eek2:

[dobby41]

The decent thing to do would be to offer refunds or at the very least add credits to Airpoints total as you have suggested.

My suggestion is a seperate credit total rather than add to Airpoints.
Can only be used on flights but at least you can use them in bits and pieces.
At the moment I have 4 credits but the big one is around $6k - going to be hard for the 2 of us to use that in one hit any time soon.

[iceman]

My suggestion is a seperate credit total rather than add to Airpoints.
Can only be used on flights but at least you can use them in bits and pieces.
At the moment I have 4 credits but the big one is around $6k - going to be hard for the 2 of us to use that in one hit any time soon.

What is being described by you and Raz here is shocking. This is not fair credit by any stretch of the imagination. I´m glad my wife and I got full refunds early on. My wife also had flights booked with an European airline that were cancelled but they gave her a full credit to be used for flights with them, however she wants (part payment, several payments etc etc) for 24 months after credit was issued. Much fairer.

[stoploss]

Rolls Royce downgraded to BB, “ junk status , sub investment grade .”( source- The Times)
Does Air NZ still have work to be done by them on the 787 engines ?

[winner69]

Love the way AIR management keep thanking those at the coal face

@camwallace_nz
Big shout out to the @FlyAirNZ contact centre. Working extremely hard in very tough circumstances. Thanks for everything you are doing to support our business and customers. @andykirton @lizfrasernz

[winner69]

Dreamliner parked down WLG ...direct flight from LAX

Had Avatar film crew on board apparently

Good to see economic activity picking up again

[King1212]

Well..better to get refund in credit rather than AIR takes u to your destination and u got corona virus...lol

[patrick]

Well..better to get refund in credit rather than AIR takes u to your destination and u got corona virus...lol

Well better still to offer a Credit in a transparent way that can easily be used for the full face value.
We have not heard the last word on this.

[King1212]

Come on man....this we call unprecedented event. ..a credit refund is better than nothing. I am happy to lose or got charged 10%

Even insurance doesn't not want to cover this event.

Stop mourning people....support your company..... revenue down 95%....jobs on the line...cash burnt like me wipe my arshe using toilet paper

[winner69]

Come on man....this we call unprecedented event. ..a credit refund is better than nothing. I am happy to lose or got charged 10%

Even insurance doesn't not want to cover this event.

Stop mourning people....support your company..... revenue down 95%....jobs on the line...cash burnt like me wipe my arshe using toilet paper

In normal times they screw you if you want to cancel or change plans.

And now they screw you really properly when they cancel flights

Glad I got my cash

[winner69]

Captain Kirk says he had enough runway to stop if he had to ......or could have taken off earlier if he put his foot down

Fascinating footage for locals of Dreamliner taking off WLG

https://twitter.com/rosspnz/status/1266866299377840128?s=21

[iceman]

Come on man....this we call unprecedented event. ..a credit refund is better than nothing. I am happy to lose or got charged 10%

Even insurance doesn't not want to cover this event.

Stop mourning people....support your company..... revenue down 95%....jobs on the line...cash burnt like me wipe my arshe using toilet paper

Not sure if you´ve read what people are complaining about. The main complaints are not about getting credits per se, but getting "credits in name only" as Raz put it, i.e. credits that are difficult or impossible to use.