AIR - Air NZ.

[King1212]

Credit is credit....be greatfull to get it...

Otherwise...go and claim your insurance...if the insurance going to cover.

Consider u all lucky to get a refund or credit in your names only. Some airlines collapsed because of these unprecedented event....

Otherwise ...next time use your Waka to travel.lol

[iceman]

Credit is credit....be greatfull to get it...

Otherwise...go and claim your insurance...if the insurance going to cover.

Consider u all lucky to get a refund or credit in your names only. Some airlines collapsed because of these unprecedented event....

Otherwise ...next time use your Waka to travel.lol

I think more worryingly for AIR and it's shareholders, people "next time" and in the future are more likely to use their competitors, many of whom have handled this situation much better.

[King1212]

Be the hero of our Aotearoa......our country need people like u all. Imo...I am happy to donate half of my ticket to AIR...to keep kiwi jobs.....

Not all the profit here....love our whanau and Tanga....

[Beagle]

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


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.

That's it in a nutshell. Suppose a couple who have saved hard for years for their trip of a lifetime wherein they were flying business class to London on AIR and then on to Switzerland but have now lost perhaps $10,000 in non refundable hotel bookings...what do they do with their $20,000 credit from AIR ? Where can they fly and what hotel's can they now afford given they're already had the value of their accommodation bookings expunged ? Worse is AIR make them try and use this credit within a tight timeframe so even if they could fly AIR to London again, (which clearly they can't as AIR won't be flying there again), they can't afford new hotel bookings and don't feel safe anyway as Europe is riddled with Covid 19. What a sham. Its a "claytons credit"...one in name only that you can't realistically use.

The VERY least AIR could easily do is to completely remove the time limit on these credits and allow people to use them as they wish. Transfer into airpoints with no date of expiry would be far more reasonable.

I agree Iceman, the backlash is coming.

[dobby41]

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.

Credits which if partially used the rest is lost.
If the credits are from international flights are hard to use in full domestically.

[Beagle]

Credits which if partially used the rest is lost.
If the credits are from international flights are hard to use in full domestically.

I really think someone needs to lodge a complaint based on a breech of the fair trading Act.
When is a credit not really a credit ? How do you use a $20,000 credit for a couple's return business class flight to London on their existing network without losing the vast majority of it as you can only use a tiny fraction of it ? How is this even remotely reasonable to customers ? Surely this is an egregious breech of the Fair Trading Act ?

I find AIR's trading practices in regard to credits grossly egregious to be quite frank about it. They disgust me to the point I will go out of my way to fly on one of their competitors wherever possible for the foreseeable future. I wouldn't mind betting a few quid I'm not the only one that feels this way.

[iceman]

Credits which if partially used the rest is lost.
If the credits are from international flights are hard to use in full domestically.

Given they've suspended nearly all of their international schedule and likely to be pretty much like that for 12 months or more, this so called credit you describe is truly shocking. Beagle is right, someone should take this further. I'm glad (and count myself lucky) my wife and I had all our bookings fully refunded.

[winner69]

I really think someone needs to lodge a complaint based on a breech of the fair trading Act.
When is a credit not really a credit ? How do you use a $20,000 credit for a couple's return business class flight to London on their existing network without losing the vast majority of it as you can only use a tiny fraction of it ? How is this even remotely reasonable to customers ? Surely this is an egregious breech of the Fair Trading Act ?

I find AIR's trading practices in regard to credits grossly egregious to be quite frank about it. They disgust me to the point I will go out of my way to fly on one of their competitors wherever possible for the foreseeable future. I wouldn't mind betting a few quid I'm not the only one that feels this way.

Almost a version of give credit where credits due

[jonu]

I really think someone needs to lodge a complaint based on a breech of the fair trading Act.
When is a credit not really a credit ? How do you use a $20,000 credit for a couple's return business class flight to London on their existing network without losing the vast majority of it as you can only use a tiny fraction of it ? How is this even remotely reasonable to customers ? Surely this is an egregious breech of the Fair Trading Act ?

I find AIR's trading practices in regard to credits grossly egregious to be quite frank about it. They disgust me to the point I will go out of my way to fly on one of their competitors wherever possible for the foreseeable future. I wouldn't mind betting a few quid I'm not the only one that feels this way.

What are their competitors doing? Are Emirates or Qantas handling their credits the same way?

[Baa_Baa]

What are their competitors doing? Are Emirates or Qantas handling their credits the same way?

I had a few thousand $ of pre-booked domestic flights on Jetstar, have had half refunded and been nagging for eight weeks to get the rest refunded, though it increasingly looks unlikely as I get no response to any Comms.

[dreamcatcher]

Shareholders currently happy SP rocketed up yesterday in aus ..........$1.47NZ sounds about right

[Beagle]

What are their competitors doing? Are Emirates or Qantas handling their credits the same way?

No idea. AIR are subject to N.Z. law under the fair trading act. However their competitors are handling things is not an excuse for egregious breeches of this act.

[iceman]

What are their competitors doing? Are Emirates or Qantas handling their credits the same way?

Not sure about them. I had credits from an European airline. Full credit for 24 months (booking by then, not travelling) to be used for partial or full single or multi bookings for any flights with them.

[Beagle]

Not sure about them. I had credits from an European airline. Full credit for 24 months (booking by then, not travelling) to be used for partial or full single or multi bookings for any flights with them.

Seems substantially more reasonable.

[44wishlists]

Credit is credit....be greatfull to get it...

Otherwise...go and claim your insurance...if the insurance going to cover.

Consider u all lucky to get a refund or credit in your names only. Some airlines collapsed because of these unprecedented event....

Otherwise ...next time use your Waka to travel.lol

You got to be sh*^ing me King1212

Real story just happened last week in my family:
My partner’s sister in law currently in Hong Kong, she attempted to book a flight from Hong Kong to Auckland. After she make the payment online and receive “confirmation”, few hours later she receives notification the flight is cancelled. Then she receives a credit from Air NZ. And guess what, when I check the flight for her again, AirNZ is still accepting booking for that cancelling flight. If you don't call that a scam, what is scam?

This is extremely frustrating and disappointing. Why would Air NZ still take bookings online when there is absolutely no flight?

[dobby41]

Credits which if partially used the rest is lost.
If the credits are from international flights are hard to use in full domestically.

Well I have to correct myself here.
What I said is what has been reported but I just rang AIR (45min wait but very helpful person at the end) and booked a domestic flight using one of my credits.
They will issue a partial credit for the remainder.

Their website also says that they are working on a better way to handle using credits - online way.
Happy(ish) customer again.

[Sideshow Bob]

You got to be sh*^ing me King1212

Real story just happened last week in my family:
My partner’s sister in law currently in Hong Kong, she attempted to book a flight from Hong Kong to Auckland. After she make the payment online and receive “confirmation”, few hours later she receives notification the flight is cancelled. Then she receives a credit from Air NZ. And guess what, when I check the flight for her again, AirNZ is still accepting booking for that cancelling flight. If you don't call that a scam, what is scam?

This is extremely frustrating and disappointing. Why would Air NZ still take bookings online when there is absolutely no flight?

That is complete BS! :mad ;: (Edit - sorry meant to say.....BS on the part of Air NZ)

[Raz]

That is complete BS! :mad ;:

Are you sure about that? When they cancelled out flights to Sydney ex Christchurch the flights out have not been cancelled and can still be booked...

[Beagle]

https://www.msn.com/en-nz/money/business/the-kiwi-icon-keeping-your-cash/ar-BB14VGa5?ocid=spartandhp

AIR's behaviour is getting under a lot of people's skin. Coutts told me earlier today he's still waiting for his credit 4 weeks after it was promised.

[44wishlists]

That is complete BS! :mad ;:

If you don't believe it, go to AirNZ, and try to book yourself a one way ticket from HK to AKL on the 3rd July. Unbelievably, the flight is still open for booking. Attached is a screenshot of the email my sister in law shortly received from AirNZ, after she PAID for her ticket.

11643

[stoploss]

https://www.msn.com/en-nz/money/business/the-kiwi-icon-keeping-your-cash/ar-BB14VGa5?ocid=spartandhp

AIR's behaviour is getting under a lot of people's skin. Coutts told me earlier today he's still waiting for his credit 4 weeks after it was promised.

I suggest anyone with a problem like this bring it to the attenton of the CEO .
Greg.Foran@airnz.co.nz

[dobby41]

https://www.msn.com/en-nz/money/business/the-kiwi-icon-keeping-your-cash/ar-BB14VGa5?ocid=spartandhp

AIR's behaviour is getting under a lot of people's skin. Coutts told me earlier today he's still waiting for his credit 4 weeks after it was promised.

The processing is very slow - they are swamped.
The sooner it is done online the better.

[workingdad]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12337019

Interesting development.

[Beagle]

"Air New Zealand is hanging tough on refunds in the face of renewed pressure from Consumer NZ which says the airline will suffer lasting brand damage". It certainly will !
Cam Wallace chief revenue officer 'If we were to open the floodgates and refund those that would accelerate the requirement to use the loan and we would have to make some even more aggressive changes to our cost base.'' He's a total muppet. Such changes would put the company on a much more competitive footing going forward and they wouldn't suffer irreparable brand damage.

Honestly where do they find these idiots ? As for paying them mega bucks...oh my goodness, they'd be better hiring a marketing graduate fresh out of University for $60,000, save themselves $1m per annum plus. Even a wet behind the ears graduate fresh out of Uni could tell you AIR are shooting themselves really badly in both feet and causing irreparable brand damage.

Another two more months for an online system for their ostensibly almost worthless credits. Pathetic is sometimes such an inadequate word. https://www.msn.com/en-nz/money/news/air-nz-on-non-refundable-airfares-credits-over-refund/ar-BB14X6Uz?ocid=spartandhp

JetStar has never looked so good !!

[Raz]

"Air New Zealand is hanging tough on refunds in the face of renewed pressure from Consumer NZ which says the airline will suffer lasting brand damage". It certainly will !
Cam Wallace chief revenue officer 'If we were to open the floodgates and refund those that would accelerate the requirement to use the loan and we would have to make some even more aggressive changes to our cost base.'' He's a total muppet. Such changes would put the company on a much more competitive footing going forward and they wouldn't suffer irreparable brand damage.

Honestly where do they find these idiots ? As for paying them mega bucks...oh my goodness, they'd be better hiring a marketing graduate fresh out of University for $60,000, save themselves $1m per annum plus. Even a wet behind the ears graduate fresh out of Uni could tell you AIR are shooting themselves really badly in both feet and causing irreparable brand damage.

Another two more months for an online system for their ostensibly almost worthless credits. Pathetic is sometimes such an inadequate word. https://www.msn.com/en-nz/money/news/air-nz-on-non-refundable-airfares-credits-over-refund/ar-BB14X6Uz?ocid=spartandhp

JetStar has never looked so good !!

Ha I just read the article, did Cam for one moment think how this looks from a customer perspective before he opened his mouth to be quoted, staggered with their media on this...we all know this but to actually state it...

It is clear they are cancelling bookings which often have little relationship to actual cancelled flights. Credits..well if we hold them back from issuing them perhaps some may be forgotten or people give up as people run around with their busy lives? If the customers pays..so what, the introversion of the airline is amazing. Passing through security at Auckland airport at the weekend, so slow with staff standing around chatting with little to do.

Optics has never been discussed at management level?

https://www.stuff.co.nz/business/121712029/air-nz-says-giving-cash-refunds-would-mean-tapping-900-million-emergency-loan-earlier

"But the airline's chief revenue officer Cam Wallace said paying so much cash out of the business would mean having to access the government money sooner, and could also mean more redundancies at the airline."

[Baa_Baa]

"Air New Zealand is hanging tough on refunds in the face of renewed pressure from Consumer NZ which says the airline will suffer lasting brand damage". It certainly will !
Cam Wallace chief revenue officer 'If we were to open the floodgates and refund those that would accelerate the requirement to use the loan and we would have to make some even more aggressive changes to our cost base.'' He's a total muppet. Such changes would put the company on a much more competitive footing going forward and they wouldn't suffer irreparable brand damage.

Honestly where do they find these idiots ? As for paying them mega bucks...oh my goodness, they'd be better hiring a marketing graduate fresh out of University for $60,000, save themselves $1m per annum plus. Even a wet behind the ears graduate fresh out of Uni could tell you AIR are shooting themselves really badly in both feet and causing irreparable brand damage.

Another two more months for an online system for their ostensibly almost worthless credits. Pathetic is sometimes such an inadequate word. https://www.msn.com/en-nz/money/news/air-nz-on-non-refundable-airfares-credits-over-refund/ar-BB14X6Uz?ocid=spartandhp

JetStar has never looked so good !!

You might’ve missed my post the other day, Jetstar haven’t refunded all my prepaid flights either. The fight for refund continues though.

[Beagle]

You might’ve missed my post the other day, Jetstar haven’t refunded all my prepaid flights either. The fight for refund continues though.

I didn't miss it. I see on their website they start flying here again on 1 July. Keep bleating to them like a lamb lost from its mother :)

[winner69]

Usually a bad sign when AIR proudly touts ‘we’ve a billion in the bank ...no worries’

Seems to be a precursor to financial catastrophe

A memorable phrase though.

[Baa_Baa]

I didn't miss it. I see on their website they start flying here again on 1 July. Keep bleating to them like a lamb lost from its mother :)

I don’t bleat like a lamb, never have, I Ram Ram Ram like the TerBaaNator! Lol 😂

Just pointing out that Jetstar are no better than AIR, they’re both fleecing their sheeple.

[Beagle]

Usually a bad sign when AIR proudly touts ‘we’ve a billion in the bank ...no worries’

Seems to be a precursor to financial catastrophe

A memorable phrase though.

Yes it sure is. As soon as they said it I got an immediate flashback to their last bailout in 2001 where they said exactly the same thing just beforehand.

[Beagle]

I don’t bleat like a lamb, never have, I Ram Ram Ram like the TerBaaNator! Lol ��

Just pointing out that Jetstar are no better than AIR, they’re both fleecing their sheeple.

Thing is with Jetheap though, you get what they say on the tin. Dirt cheap fares with really poor service...nobody expects anything else and at least they don't pretend to be something they're not.

[Rep]

"Air New Zealand is hanging tough on refunds in the face of renewed pressure from Consumer NZ which says the airline will suffer lasting brand damage". It certainly will !
Cam Wallace chief revenue officer 'If we were to open the floodgates and refund those that would accelerate the requirement to use the loan and we would have to make some even more aggressive changes to our cost base.'' He's a total muppet. Such changes would put the company on a much more competitive footing going forward and they wouldn't suffer irreparable brand damage.

Honestly where do they find these idiots ? As for paying them mega bucks...oh my goodness, they'd be better hiring a marketing graduate fresh out of University for $60,000, save themselves $1m per annum plus. Even a wet behind the ears graduate fresh out of Uni could tell you AIR are shooting themselves really badly in both feet and causing irreparable brand damage.

Another two more months for an online system for their ostensibly almost worthless credits. Pathetic is sometimes such an inadequate word. https://www.msn.com/en-nz/money/news/air-nz-on-non-refundable-airfares-credits-over-refund/ar-BB14X6Uz?ocid=spartandhp

JetStar has never looked so good !!

What Cam is essentially saying is that he's going to hang tough and continue to deny the calls to provide refunds on the basis that he doesn't pay the folk who paid good money for their tickets any interest on their involuntary loan to Air New Zealand but if he did refund he'd have to use the money that they government has pledged as a lifeline.

By doing so that avoids Greg, Cam and the rest of the remaining Executive Team having to make further hard decisions around having to reduce costs because not having that cash means less interest costs and less exposure to a Government loan that would reduce their independence to make decisions. Funding to avoid having to make further reductions to their staff is NOT the responsibility of the consumer who flies with Air NZ and can't take a flight due to the involuntary restrictions on travel... if Air NZ management have a good case not to have to reduce jobs further they can take it to their shareholders particularly the NZ Government and see how the taxpayer will judge if it value for money at the ballot box.

By waving a middle finger at the paying public and crying poor, they shed any vestige of sympathy I have for their predicament.

[samjaynz]

Family members who shelled out for the 'trip of a lifetime' and were promised cash refunds 6 weeks ago still waiting (and have lost their jobs in the interim) - I guess their modest sums of money are better off lining the likes of Cam Wallace's pockets, right? I mean earning big bucks for stating the obvious and mucking around on flight radar is definitely more valuable.

[Baa_Baa]

Thing is with Jetheap though, you get what they say on the tin. Dirt cheap fares with really poor service...nobody expects anything else and at least they don't pretend to be something they're not.

Well that might be your experience, you both have ‘special needs’ but for me flying Jetstar has saved a small fortune domestically and I haven’t noticed any difference from the AIR domestic service, except that I have a whole lot more money than had I flown with the over priced national service that is up themselves with ego and hubris. $500 air return to Auckland versus $120 return on Jetstar. Go figure. Anyway this isn’t helping me get my money back for cancelled flights.

[winner69]

Cam still keeping us up to date with his daily reports

@camwallace_nz
Slow start to the day with fog in CHC, thanks for your patience. Flying 27% of last year's @FlyAirNZ passenger numbers which requires us to operate 51% of capacity. @andykirton

[winner69]

I see Cam always tags Andy Kirton in on his tweets

Andy ex General Secretary of Labour Party (was he pushed as a result of that sex scandal?) now Head of Corporate Affairs at Air NZ

Head of Corporate Affairs generally one of the better lurks in a corporation.

He’s turning a blind eye to a lot of things as well .....suppose he still works there?

[sb9]

Good on Jon Duffy, Consumer NZ head and ex Trade Me Senior Exec standing upto customers impacted by Air NZ's pathetic handling of the situation.

[winner69]

AIR chief marketing man left last week as a result of Greg’s trimming (axing) of Exec Team

[patrick]

Poor me, poor me from Air Nz......... join the club, mate. “ Hundreds of thousands in credits”
Stop the Bull...t its many millions. They cannot even state the Truth. As I posted a few days ago this is not finished and the latest release reminds me of Donald’s responses.
Could anything be worse than that?

[winner69]

When Cam says lising so many staff has been ‘eye-wateringly sad’ for everyone I suppose he means many ended up in tears.

[tim23]

Are they obliged to refund non-refundable tickets? Providing a credit seems reasonable to me.

[Cyclical]

That Herald article Beagle linked to a page or two back with Wallace claiming they had to make some tough calls re refunds etc, said this:

While he would not disclose how much paying out the non-refundable tickets would cost, it could be close to $100 million.

Either that figure is wildly conservative, or there is something seriously wrong with the decision makers at AIR. Really at the end of the day, what difference is $100m going to make in the broad scheme of things? I don't know what their advertising budget is in the good times, but the damage being done here is going to take a hell of a lot to put right. As someone pointed out above, it's not the customer's job to fund AIR through these troubled skys.

[Raz]

Are they obliged to refund non-refundable tickets? Providing a credit seems reasonable to me.

I think what gets me is cancelled bookings when the flights are not actually cancelled and credit is not even available to rebook.

[Grimy]

Are they obliged to refund non-refundable tickets? Providing a credit seems reasonable to me.

I don't think they are (that's why they are called non-refundable), and if I couldn't use my ticket (in normal circumstances), I would have to suck up the 100% loss of my ticket price, so from that perspective I am happy that I get a credit, although a refund would be preferable, as circumstances change. But you get what you pay for, and I wasn't going to pay a lot extra for a flexi-fare (or whatever) on a flight I was 100% going to be on.
However, I didn't decide to not use my ticket. I had every intention to be on that flight. They cancelled the flight...….(which I know wasn't their choice).
But yeah. I'm okay with a credit on a non-refundable ticket.

[clip]

I don't think they are (that's why they are called non-refundable), and if I couldn't use my ticket (in normal circumstances), I would have to suck up the 100% loss of my ticket price, so from that perspective I am happy that I get a credit, although a refund would be preferable, as circumstances change. But you get what you pay for, and I wasn't going to pay a lot extra for a flexi-fare (or whatever) on a flight I was 100% going to be on.
However, I didn't decide to not use my ticket. I had every intention to be on that flight. They cancelled the flight...….(which I know wasn't their choice).
But yeah. I'm okay with a credit on a non-refundable ticket.

You can cancel a non-refundable ticket with a fee I believe? We paid around $1600 for some.flights and went to cancel on the website in early march, it showed we would need to pay around $400 in fees which we were going to just write off and take the loss, but at least get some money back. At the last stage of the process it said no online refunds, call if your flight is within 48 hours or bugger off until closer to the time.

[stoploss]

That Herald article Beagle linked to a page or two back with Wallace claiming they had to make some tough calls re refunds etc, said this:

While he would not disclose how much paying out the non-refundable tickets would cost, it could be close to $100 million.

Either that figure is wildly conservative, or there is something seriously wrong with the decision makers at AIR. Really at the end of the day, what difference is $100m going to make in the broad scheme of things? I don't know what their advertising budget is in the good times, but the damage being done here is going to take a hell of a lot to put right. As someone pointed out above, it's not the customer's job to fund AIR through these troubled skys.

He was interviewed by HEDPA tonight she said why don't you refund everyone bearing in mind you have Govt money to call on ? He said they were trying to conserve their cash so they could come out of this in the best way . when pushed from memory he said if they refunded everyone it would be all gone . He also stated they would need the Govt money in the short to med term to fund all the operations, staff,maintenance , fuel,.....This was Newstalk ZB I think 5.30-6.00 roughly.

[Sideshow Bob]

Looking at the FY19 annual report, it has "Revenue in advance" of $1.372b. This was broadly in line with FY18.

Would have to think a reasonable chunk of that $1.3b want their money back, as alot will be international flights, no timeline for border openings etc. Say if 50% wanted their money back, that is $650m.

They started this with about $1b until they started burning cash, and now down to $650m. If they drained all of those pre-paid fares, then they would have...…$650m - $650m = $0m.

And they'd be then starting to burn their major shareholders loan. :scared:

[Raz]

Looking at the FY19 annual report, it has "Revenue in advance" of $1.372b. This was broadly in line with FY18.

Would have to think a reasonable chunk of that $1.3b want their money back, as alot will be international flights, no timeline for border openings etc. Say if 50% wanted their money back, that is $650m.

They started this with about $1b until they started burning cash, and now down to $650m. If they drained all of those pre-paid fares, then they would have...…$650m - $650m = $0m.

And they'd be then starting to burn their major shareholders loan. :scared:

The fiscal angle has been, revenue in advance has always been greater than liquid assets until the government funding facility was established. They are buying for time which is understandable yet they have not really worked hard enough on the cash burn rate as they have chosen to utilised revenue in advance and risk brand value. They think they have a captive market in the end so you will be forced to fly with the us regardless.

[stoploss]

Chris Faafoi on the job (imo one of 3 competent Govt Ministers) ,lead news item . As this is "our " airline ,expect Jacinda to compassionately allow for refunds by lunchtime when she realises how many jobs are at stake , whoops I mean votes.

[Beagle]

I think what gets me is cancelled bookings when the flights are not actually cancelled and credit is not even available to rebook.

I know Couta1 has experienced this and is still waiting for his credit...but wait, all is well, (sarcasm intended), they will have an online credit system by the end of July. Just another 2 months for him to wait, so three months to get his credit for bookings that were cancelled when the flights still flew.

My thoughts are that the real figure if they had to refund all tickets would run to many hundreds of millions. Possibly over $500m. The truth is they probably need all of the Govt's $900m loan and then some more to get through this crisis and if they had to refund all tickets they would need substantially more Government "support".

Thing is though, the amount of brand damage being done here is incalculable. What are Mr and Mrs Joe Bloggs who booked business class tickets to London for $20,000 going to use their credit on ? Where can they fly ?

Might go to Queenstown in September. Not sure yet, see how long we stay Covid 19 free. Might as well just book, (if and when I feel safe enough to do so), the very cheapest flights I can get as both airlines flying in N.Z. treat their customers like ****. I suspect there will be millions of people in N.Z. thinking like me in the future who would previously taken a parochial approach and backed "their" national airline thinking they would get better service...what a joke.

[dreamcatcher]

I hope with all the Covid-19 & shoddy service by airlines the @Beagle makes a stand and drives to Queenstown

That will show the airlines eh!! :)

[Beagle]

I hope with all the Covid-19 & shoddy service by airlines the @Beagle makes a stand and drives to Queenstown

That will show the airlines eh!! :)

LOL Its a long way to drive for a one week ski trip but if someone has a current model BMW M5 they would loan me for the trip I am all ears :)

[dreamcatcher]

LOL Its a long way to drive for a one week ski trip but if someone has a current model BMW M5 they would loan me for the trip I am all ears :)

Can loan you the Prius just a little imagination required..........:t_up:

[Beagle]

Can loan you the Prius just a little imagination required..........:t_up:

:lol: :lol:

[samjaynz]

I know Couta1 has experienced this and is still waiting for his credit...but wait, all is well, (sarcasm intended), they will have an online credit system by the end of July. Just another 2 months for him to wait, so three months to get his credit for bookings that were cancelled when the flights still flew.

My thoughts are that the real figure if they had to refund all tickets would run to many hundreds of millions. Possibly over $500m. The truth is they probably need all of the Govt's $900m loan and then some more to get through this crisis and if they had to refund all tickets they would need substantially more Government "support".

Thing is though, the amount of brand damage being done here is incalculable. What are Mr and Mrs Joe Bloggs who booked business class tickets to London for $20,000 going to use their credit on ? Where can they fly ?

Might go to Queenstown in September. Not sure yet, see how long we stay Covid 19 free. Might as well just book, (if and when I feel safe enough to do so), the very cheapest flights I can get as both airlines flying in N.Z. treat their customers like ****. I suspect there will be millions of people in N.Z. thinking like me in the future who would previously taken a parochial approach and backed "their" national airline thinking they would get better service...what a joke.

Agreed. When I go back to flying for work, travel etc my new approach will be whoever is cheapest. It's all crap, so why not save a few dollars?

[dobby41]

Agreed. When I go back to flying for work, travel etc my new approach will be whoever is cheapest. It's all crap, so why not save a few dollars?

I fly with 'best value' which isn't the same as cheapest.
Cheap and get there late?
Cheap and be cancelled.
I'll stick with value - may be AIR or another.

[Tomtom]

Good to see JetStar returning to market next month. They have a real chance here with AIR annoying customers with this refund policy. It used to be that people would pick AIR every time but, if JetStar can raise their service game, they could easily have half the profitable routes bookings.

[dobby41]

Good to see JetStar returning to market next month. They have a real chance here with AIR annoying customers with this refund policy. It used to be that people would pick AIR every time but, if JetStar can raise their service game, they could easily have half the profitable routes bookings.

IF they can lift their service game - why would anyone think they could?
Their problem seemed to be shortage of crew and thin on planes so sickness and plane service issue stung them.

[Raz]

Well when we open in LA. beagle ..my one will on the lot for sale, no point in the garage, you can have a free test drive if your keen to go over to that exciting city 😛

[44wishlists]

Are they obliged to refund non-refundable tickets? Providing a credit seems reasonable to me.


The problem is AirNZ still accepting booking for their cancelled flight. It's not the matter of refundable or not. When AirNZ clearly knows they cannot offer the service, and they are still accepting booking. That's really what angry me the most.

[dobby41]

The problem is AirNZ still accepting booking for their cancelled flight. It's not the matter of refundable or not. When AirNZ clearly knows they cannot offer the service, and they are still accepting booking. That's really what angry me the most.

Raise it on their facebook page - often gets their attention.
Or else email the CEO

[Beagle]

Well when we open in LA. beagle ..my one will on the lot for sale, no point in the garage, you can have a free test drive if your keen to go over to that exciting city ��

Thanks for the offer mate but Auckland city BMW is just a little bit closer :)

[tommy_d]

IF they can lift their service game - why would anyone think they could?
Their problem seemed to be shortage of crew and thin on planes so sickness and plane service issue stung them.
if their problem was a shortage of qualified people to fill crew vacancies then they should be sorted now

[winner69]

Good effort by our Cam on TV news tonight

Corporate view of course and no magic remedy though

[King1212]

Come people ...donate your ticket to AIR. Out country needs you!

[Beagle]

https://www.msn.com/en-nz/news/national/air-new-zealand-facing-mounting-pressure-to-refund-cancelled-flights-from-lockdown/ar-BB150MQG?ocid=spartandhp

[winner69]

Credit/debacle PR nightmare

Where’s Foran in all this ....missing in action

Even if he fronted up on TV and said ‘we don’t refund non-refundable fares’ at least thats leadership (and would have made King happy as)

Poor effort Foran ...but Cam put on his corporate look when fronting up :cool:

[Raz]

Thanks for the offer mate but Auckland city BMW is just a little bit closer :)

I really thought you would jump at taking a long cramped cylinder to LAX, witness a few riots and and the added excitement of dodging a virus and finding an open shop all to take it on an extend drive...

[Raz]

Credit/debacle PR nightmare

Where’s Foran in all this ....missing in action

Even if he fronted up on TV and said ‘we don’t refund non-refundable fares’ at least thats leadership (and would have made King happy as)

Poor effort Foran ...but Cam put on his corporate look when fronting up :cool:

I thought yesterday you were saying Cam did well on the news. The problem actually is with the culture...they have beens self serving and not customer focused for a long time, the customer experience has been in a long term trend down...they laid off most of their call center staff and that is why you can't get a call taken.

Was the COVID-19 Business Debt Hibernation regime set up really for these guys..

[winner69]

I thought yesterday you were saying Cam did well on the news. The problem actually is with the culture...they have beens self serving and not customer focused for a long time, the customer experience has been in a long term trend down...they laid off most of their call center staff and that is why you can't get a call taken.

Was the COVID-19 Business Debt Hibernation regime set up really for these guys..

I was criticising Forans leadership in this ... Cam doing a good job as the yes man

Another sad story ... and pissed of customer

https://www.stuff.co.nz/business/300028072/customer-flabbergasted-at-difficulty-of-using-air-new-zealand-credits

[Beagle]

I was criticising Forans leadership in this ... Cam doing a good job as the yes man

Another sad story ... and pissed of customer

https://www.stuff.co.nz/business/300028072/customer-flabbergasted-at-difficulty-of-using-air-new-zealand-credits

There's probably hundreds of thousands of customers in N.Z. that feel AIR's conduct is morally repugnant. That's incredibly corrosive to the natural feeling of parochial goodwill many Kiwi's feel towards "their" national airline. JetStar will probably start flying again in N.Z. on 1 July 2020. Whether or not people have been directly offended by AIR's outrageous approach to credits a lot of people will vote with their feet for a very long time. Travel on an aircraft is now something to be endured, not enjoyed so vast numbers of people will choose to minimise the overall pain by choosing the very cheapest flight there is after any sense of brand loyalty has been so badly sabotaged by the "captains of industry" greedily scoffing from the trough at AIR.

[Jay]

I was thinking the same thing - where is the leader?? (Foran) - perhaps he thought he would be asked too many hard questions.
yes could have said they are non refundable tickets - hard one not their fault, not the customer fault - but could do a lot better with the credits - e.g maybe have the option of giving the credit to whomever paid for the tickets

[biker]

To state the obvious Air NZ is a major corporate with only one goal in mind- ( eventual) PROFIT
The path to that at the moment is to limit the outflow of cash in any way possible.
They fully realise that their current actions will dent their reputation in the short term but are prepared to deal with that later.
There is nothing to be gained for them by enabling customers to contact them easily. They have the cash and they’re keeping it.
The media and customers and ‘sharetraders’ can gnash their gums endlessly but the entity they are dealing with is a corporate, pure and simple, acting as corporates do, by protecting and driving the business with whatever it takes.
Personal circumstances do not register in the corporate mentality.
Foran and his new head of HR are expert technicians in this arena.
The market, which this corporate strives to please, continues to indicate the success of their strategy.

[dreamcatcher]

Jeez guys this give me MY money is raging on for weeks but AIR simply cannot afford to do that at this time without putting themselves at massive financial risk. They are in a corner, the alternative is maybe a foreign speaking airline servicing NZ and everybody loses.

[dobby41]

Jeez guys this give me MY money is raging on for weeks but AIR simply cannot afford to do that at this time without putting themselves at massive financial risk. They are in a corner, the alternative is maybe a foreign speaking airline servicing NZ and everybody loses.

I understand the financial position the company is in and I'm happy with my credits now that I can use them partially.
They say they'll have an online solution to using them in 5 weeks and that will make it even better.

[BlackPeter]

Jeez guys this give me MY money is raging on for weeks but AIR simply cannot afford to do that at this time without putting themselves at massive financial risk. They are in a corner, the alternative is maybe a foreign speaking airline servicing NZ and everybody loses.

Do airlines talk? If they do, what does it matter whether they talk "foreign"? Any airline talks foreign in all but one country ... and to be honest - I never considered how they talk when I purchased a flight. I do look at their safety ratings, the quality and reliability of their service, their customer focus and at the price of the ticket.

Air NZ is clearly seriously lacking in some of these regards. Their customer focus is revolting and their service (looking after customers who out of no fault of their own could not use the service they paid for) - non existent. If this is what you are calling "talking local", then please - can we have some more "foreign talking" airlines?

AIR NZ is not servicing NZ, they are milking New Zealanders. A "service" we well could do without.

[sb9]

Seems as though there is reverse correlation between brand damage and share price. More bad reputation, higher the price seem to be going...

[Jantar]

I am going to defend AIr Nz on the credit issue .I had booked for my wife to fly Wellington to Queenstown on the day before lockdown, and being the cheapskate I am I booked the cheapest fare, and that is non-refundable. When Jacinda announced that where you are n the Wednesday night is where you stay for the next 4 weeks, I rang Air NZ and cancelled the trip, fully expecting that I would wear the loss. I was very pleased to receive a credit for that trip.

Incidentally Sounds Air also issued a credit for the portion Picton to Wellington and that was also a non-refundable ticket.

[Zaphod]

I am going to defend AIr Nz on the credit issue .I had booked for my wife to fly Wellington to Queenstown on the day before lockdown, and being the cheapskate I am I booked the cheapest fare, and that is non-refundable. When Jacinda announced that where you are n the Wednesday night is where you stay for the next 4 weeks, I rang Air NZ and cancelled the trip, fully expecting that I would wear the loss. I was very pleased to receive a credit for that trip.

Incidentally Sounds Air also issued a credit for the portion Picton to Wellington and that was also a non-refundable ticket.

If the airline cannot provide the service that you booked, then there are certain rights under the CGA and FTA. Some airlines are portraying themselves as being generous when in fact, they are merely (nearly) obeying the law.

[dreamcatcher]

@BlackPeter (looking after customers who out of no fault of their own could not use the service they paid for)

Same could be said for AIR (through no fault of their own could NOT DELIVER the service paid for)

[BlackPeter]

@BlackPeter (looking after customers who out of no fault of their own could not use the service they paid for)

Same could be said for AIR (through no fault of their own could NOT DELIVER the service paid for)

Absolutely. No service, no pay. That's the way it should be. However AIR didn't deliver (no matter why) but still kept the money. This is highway robbery.

But be that as it may ... AIR prefers to smear their brand and who am I in trying to stop them to do so? Many other carriers around the world behaved more customer friendly and either repaid or provided full credit (some even 110% credit if customer choose credit vs. refund).

Next time I am going to fly I will pick a carrier where my money is safe. If you prefer to feed AIR's troughers - feel free to do so. I am sure they are happy to take donations as well, why don't you send them money now?

[Blue Skies]

Despite the fact Cam Wallace Chief Revenue Officer said in so many words, if AIR had to refund all the prepaid tickets it would bankrupt the airline ( & would have to draw down on Govt loan to keep flying), the SP is up 6% today.
Just shows how utterly irrational & unpredictable the market is now.

[Beagle]

Irrational exuberance with airline stocks at present, certainly not limited to AIR N.Z.
Reality will bite really hard in due course. Their most recent operating statistics out on Wednesday were an absolute shocker. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/354105/323806.pdf

[Jantar]

If the airline cannot provide the service that you booked, then there are certain rights under the CGA and FTA. Some airlines are portraying themselves as being generous when in fact, they are merely (nearly) obeying the law. But they could still provide that service. That flight did go to Queenstown on that day at that time. It was our decision to not fly.

[k14]

Absolutely. No service, no pay. That's the way it should be. However AIR didn't deliver (no matter why) but still kept the money. This is highway robbery.

But be that as it may ... AIR prefers to smear their brand and who am I in trying to stop them to do so? Many other carriers around the world behaved more customer friendly and either repaid or provided full credit (some even 110% credit if customer choose credit vs. refund).

Next time I am going to fly I will pick a carrier where my money is safe. If you prefer to feed AIR's troughers - feel free to do so. I am sure they are happy to take donations as well, why don't you send them money now?
Agree. The lack of flexibility around the credit is the real problem. If they provided the option of a cash refund or dollar for dollar airpoints credit (solely to be used to buy flights) then I wouldn't be surprised if a lot of people opted for the credit. I am relatively unaffected (about $1k of flights for 4 people flying domestically) but the people with overseas credits are being rorted which is totally unfair imo. The shareholders should be the ones that take the loss (just like they have been taking the gains for the last 10 years) not the customers.

[biker]

Irrational exuberance with airline stocks at present, certainly not limited to AIR N.Z.
Reality will bite really hard in due course. Their most recent operating statistics out on Wednesday were an absolute shocker. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/354105/323806.pdf

Irrational or not, a lot of money says AIR has a great future.
IMO Foran and his merry men and women will dice then drive this airline so hard the profits will be surprising. Lean and very Mean but very profitable.
The ideal corporate outcome.
It’s not about the people. It’s about the shareholders.
Glad I’m not short.

[dobby41]

Agree. The lack of flexibility around the credit is the real problem. If they provided the option of a cash refund or dollar for dollar airpoints credit (solely to be used to buy flights) then I wouldn't be surprised if a lot of people opted for the credit. I am relatively unaffected (about $1k of flights for 4 people flying domestically) but the people with overseas credits are being rorted which is totally unfair imo. The shareholders should be the ones that take the loss (just like they have been taking the gains for the last 10 years) not the customers.

If I was offered a refund I'd take it - I'd use the cash later for a flight but it is mine.
So then the company would have a huge run on cash.
The credit is flexible - I just (2 days ago) used $400 of a $1100 international credit (one of several we have) for a domestic flight. The rest of the credit is back with me to use later. In fact the credit is held in A$ as it was a oneway return from Aus.

[Beagle]

They can't issue cash refunds while keeping enough in reserve (including the Govt's loan) to have any sort of shot at getting through Covid 19 so they have no option but to burn up customer goodwill at an unprecedented rate.
We are nowhere near any sort of resolution of Covid 19 overseas.
I think they will burn up all existing equity and lose over $2,000m before they're properly on the other side of Covid 19. I think including extraordinary items about $700 - $800m of losses in FY20, (only 4 months effects from Covid 19) and a similar size in FY21 (12 months effects from Covid 19) and more losses in FY22. They might turn a small profit in FY23. Their international business is in complete tatters and will be for at least 2 years in my opinion.

I am very comfortable with my short position.

[Zaphod]

But they could still provide that service. That flight did go to Queenstown on that day at that time. It was our decision to not fly.

The service is the entire booking not just one sector within the booking. Unless this was a one-way booking, two separate one-way bookings, or the return sector was somehow booked to occur after lockdown lifted (unlikely given the date was unknown), then they were liable.

[macduffy]

Is Beagle's assessment is correct and if we assume that "cancelled" customers are unsecured creditors, shouldn't AIR be liquidated as an insolvent company?

;)

[Rep]

For those who are faced with only a credit rather than a refund... consider the potential for this hypothetical but entirely possible situation:

What happens even an international travel bubble does eventuate so you can travel abroad but your or just about every travel insurer decides that for any international travel that it "...will not provide any cover for claims directly or indirectly arising from, relating to or in any way connected with COVID-19?"

Then what is the use of a high value of credits with Air NZ when you it could be potentially practically unwise to travel without travel insurance because the world has changed? Do you think that Air NZ travel insurance offering won't have this disclaimer? Or that insurance that does cover a claim connected with COVID-19 is potentially unaffordable.... remember most travel cover has a death benefit and COVID 19 still has a relatively high mortality rate and/or the cost of hospitalisation (incl isolation and PPE requirements) other than on the reciprocal arrangements with Australia will be at the travellers cost?

[Raz]

https://www.stuff.co.nz/business/industries/121712064/coronavirus-air-new-zealand-to-remove-extra-150-million-from-its-wages-bill-more-job-losses-possible-ceo-says

Really!! About time..slow mo

"In a live chat with travel agents in May, Wallace said the airline aim was to retain as many employees as possible and it had shifted its focus to being a domestic airline in the short term."

Why, is it part of the Government conditions on loan facility?

ps Should elevate the SP :)

[winner69]

More ‘eye watering sad’ news from AIR

Should give the share price another boost

Air going to be super profitable in a year or so

https://www.stuff.co.nz/business/industries/121712064/coronavirus-anger-and-dismay-at-air-new-zealand-proposal-to-remove-extra-150-million-from-its-wages-bill

[Beagle]

https://www.stuff.co.nz/business/industries/121712064/coronavirus-air-new-zealand-to-remove-extra-150-million-from-its-wages-bill-more-job-losses-possible-ceo-says

Really!! About time..slow mo

"In a live chat with travel agents in May, Wallace said the airline aim was to retain as many employees as possible and it had shifted its focus to being a domestic airline in the short term."

Why, is it part of the Government conditions on loan facility?

ps Should elevate the SP :)

Govt do have to approve their business plan if they start drawing on that loan. AIR are playing hard ball with their so called credits because the Govt are ostensibly making them do so, or will be when they start drawing on that loan. All those people with credits they can't use have effectively been "taxed" extra by a quassi Govt department. Someone has to pay for some of Cindy's helicopter money, filthy rich capitalist's who can afford to fly internationally are an easy target eh.

[Jaa]

https://www.stuff.co.nz/business/industries/121712064/coronavirus-air-new-zealand-to-remove-extra-150-million-from-its-wages-bill-more-job-losses-possible-ceo-says

Really!! About time..slow mo

"In a live chat with travel agents in May, Wallace said the airline aim was to retain as many employees as possible and it had shifted its focus to being a domestic airline in the short term."

Why, is it part of the Government conditions on loan facility?

ps Should elevate the SP :)

Like how Mr Savage is so Savage he doesn't even need a first name!

[Beagle]

Like how Mr Savage is so Savage he doesn't even get a first name! RIP journalistic standards...

Apparently that's how he likes to be known. Its long overdue that Savage was given some savage treatment. AIR unions are far too powerful.

Bottom line is the fats cats that have been flying the big air buses earning $500K plus a year will have to take a couple of years leave without pay. If they haven't built up substantial assets to weather that storm after decades of earning multi hundred thousand dollar salaries then I'm sorry but that's just too bad.

[Jaa]

Apparently that's how he likes to be known. Its long overdue that Savage was given some savage treatment. AIR unions are far too powerful.

Right you are Beagle, I must retract my earlier statement. Here is the union's statement (https://www.etu.nz/air-new-zealand-proposes-further-wage-cuts-of-150-million/) or perhaps its a copy from the news article. Guess they are just doing their job fighting for their members.

Management need to balance everyone's interests, customers, staff and shareholders. None are more important than the other. No one seems happy so guess they are doing a pretty good job of it!

[jmsnz]

To be honest, I have a bit of sympathy for Air NZ. Maybe they could do better but like many large companies their stakeholders are so varied in nature that they simply can not please everyone all of the time and the rhetoric is often taken over by those with actually little or nothing at stake, as we are seeing in this thread. There have been plenty of other examples like Telecom, Sky etc not to mention Jetstar over the years as well where it gets to the point that it wouldn't matter what they did the negativity is always the headline. We are seeing it again now, the company is saying there will be more staff cuts and immediately the unions not surprisingly cry foul.

I can't see an alternative for Air NZ but to retain as much cash as they can and assuming they can survive long enough they can then have strategies to deal with the fallout. Spending the cash now won't keep everyone happy and will send them broke - that doesn't seem a great strategy.

Good luck to all holders

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12337317

"As we thrive we will not focus on size, but on quality. We will be smaller, flying fewer routes but we will not change our outstanding reputation for care, compassion and heart.''

Try telling that to the hundreds of thousands of customers with credits they can't use. Its time for a Tui !

[jmsnz]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12337317

"As we thrive we will not focus on size, but on quality. We will be smaller, flying fewer routes but we will not change our outstanding reputation for care, compassion and heart.''

Try telling that to the hundreds of thousands of customers with credits they can't use. Its time for a Tui !

Of course the alternative is 'Air NZ goes broke leaving thousands unable to use credits or get refunds....'. That said I agree with you that statement is unfortunate right now although I doubt you would be happy whatever they said.

[Beagle]

Of course the alternative is 'Air NZ goes broke leaving thousands unable to use credits or get refunds....'. That said I agree with you that statement is unfortunate right now although I doubt you would be happy whatever they said.

Some contrition that they acknowledge they have caused customers heaps of difficulty with their lack of call centre staff and inequitable credit system would be a start. Then going on to say we are looking at making it a lot easier for people to use their credits which can be applied to flights for whomever the credit holder chooses and these credits no longer have an expiry date would be far more fair and reasonable. People should be able to, for example, hold on to their business class return airfare credit to Vancouver until they feel its safe to travel their again, not if and when AIR ever allows them too. I really think someone needs to run a test case through the consumer guarantees act and / or fair trading act. You pay for a service, the supplier can't provide that service in a reasonable timeframe, my understanding is you're entitled to a full cash refund under the CGA which covers both goods and services.

For Greg Foran to say AIR have an "outstanding reputation for care, compassion and heart" is a grossly misleading representation of how they're currently treating customers. Even if he used the past tense "had an outstanding..." some would say that really stretches the truth.

Why not just come clean and simply say we'd go broke if we refunded everyone but we are introducing flexi credit, use it as and when you like with no time limit for whomever you like. I suppose its too much to ask for honest talk and fair play ?

Disc: I spent most of my remaining airpoints last weekend because I think there's a chance they might simply "disappear" under the auspices of we are sorry but we have no alternative but to invoke the force majeure clause of this system...we thank you for your understanding...etc

[winner69]

Hey Beagle .....AIR in full flight heading to FL200

OCA ascent stalled and flight plan says drop to FL90

[jmsnz]

Some contrition that they acknowledge they have caused customers heaps of difficulty with their lack of call centre staff and inequitable credit system would be a start. Then going on to say we are looking at making it a lot easier for people to use their credits which can be applied to flights for whomever the credit holder chooses and these credits no longer have an expiry date would be far more fair and reasonable. People should be able to, for example, hold on to their business class return airfare credit to Vancouver until they feel its safe to travel their again, not if and when AIR ever allows them too. I really think someone needs to run a test case through the consumer guarantees act and / or fair trading act. You pay for a service, the supplier can't provide that service in a reasonable timeframe, my understanding is you're entitled to a full cash refund under the CGA. The CGA covers both goods and services. To say AIR have an "outstanding reputation for care, compassion and heart" is a gross and extremely misleading representation of how they're currently treating customers.

Why not just come clean and simply say we'd go broke if we refunded everyone but we are introducing flexi credit, use it as and when you like with no time limit for whomever you like. I suppose its too much to ask for honest talk and fair play ?
Don't get me wrong, I am not defending them and I certainly think their messaging could have been an awful lot better than those statements which I agree are awful. As someone with a business associated with tourism who has seen their costs remain unchanged but revenues go close to 0, trust me it is a very confronting situation. We have had to make some very difficult decisions as have Air NZ and my point is that it wouldn't matter what they did there would be a very significant number of people that would very negatively impacted. It might just turn be that this is better than the alternatives.

[Beagle]

Hey Beagle .....AIR in full flight heading to F200

OCA ascent stalled and flight plan says drop to F90

I think you got the wrong company that's going to stall. AIR going too and lose heaps of altitude. Game still on to see who reaches FL100 first ;)

[winner69]

Jetstar caught the pissing customers off trick ...but theirs is big time bad

https://www.stuff.co.nz/business/300028780/jetstar-brings-back-domestic-flights-then-cancels-some

[Blue Skies]

Yep, if Air NZ are going to claim that kind of positioning it would be nice if they walked the talk and gave a **** about customers who can’t fairly use their credits. Surely the $900 m government loan facility is there to be used to run their business and do the right thing.


Interesting listening to Gregg Foran being interviewed on radio this afternoon.
After stating AIR could not afford to refund all the pre paid travel, he was asked that exact question, i.e. are you avoiding refunds so AIR will not have to dip into the $900 M Govt loan?
His rather shocking reply was, No, even without the refunds, AIR forecasts show they will be using that Govt. (convertible) loan within a couple of months & will need all of it.
That must come as a bit of a shock to anyone who is still investing in AIR because if/when that loan is Converted (& how on earth are they going to be able to repay it with interest ) it will severely dilute the value of the shares.

[winner69]

Interesting listening to Gregg Foran being interviewed on radio this afternoon.
After stating AIR could not afford to refund all the pre paid travel, he was asked that exact question, i.e. are you avoiding refunds so AIR will not have to dip into the $900 M Govt loan?
His rather shocking reply was, No, even without the refunds, AIR forecasts show they will be using that loan within a couple of months & will need all of it.
That must come as a bit of a shock to anyone who is still investing in AIR.

Not surprising ...but as you say might shock a few punters

[biker]

Perhaps these Air NZ forecasts of some gravity that the CEO is quoting in the media should be posted as announcement on NZX to stay compliant with continuous disclosure obligations? Might be helpful to the rampant optimists bidding up the share price.

They won’t do that because it’s not an official Air NZ forecast. It is simply a very very experienced CEO doing his best to smooth the troubled waters, saying what he needs to say and it may or may not, be true.
He’s playing corporate hard ball not tiddlywinks.

[CKWJ]

Interesting listening to Gregg Foran being interviewed on radio this afternoon.
After stating AIR could not afford to refund all the pre paid travel, he was asked that exact question, i.e. are you avoiding refunds so AIR will not have to dip into the $900 M Govt loan?
His rather shocking reply was, No, even without the refunds, AIR forecasts show they will be using that Govt. (convertible) loan within a couple of months & will need all of it.
That must come as a bit of a shock to anyone who is still investing in AIR because if/when that loan is Converted (& how on earth are they going to be able to repay it with interest ) it will severely dilute the value of the shares.

Cynical, but the timing of his remarks is on a Friday afternoon, without a trading day the next day, no time for the market to react, shareholders have the weekend to forget he said it. That being said, in this market he might as well say the government is bailing out the airline tomorrow and the SP goes up by 10c in a day.

Another thing to consider is the competitive landscape in the short term with the TT bubble. Across the ditch we have a well-capitalised rival in Qantas who has the ability to stand down staff without pay, and bring them back only when needed. Most of their world-wide network is offline and I can see them using the TT bubble as the opportunity to make inroads to Air NZ's position in the post-covid tasman market. They'll use Jetstar at the bottom end of the market and to put downward pressure on prices in the NZ domestic scene, even if the media coverage today wasn't good. Who knows what will happen once and if Virgin Australia get new owners.

[Traderx]

This frankly unbelievable SP surely allows AIR to quickly launch an equity raise? What are they waiting for?

[Sideshow Bob]

This frankly unbelievable SP surely allows AIR to quickly launch an equity raise? What are they waiting for?

Would have to be backed by the govt to keep their majority stake.

Maybe they'd rather charge them interest....??

[Beagle]

This frankly unbelievable SP surely allows AIR to quickly launch an equity raise? What are they waiting for?

Agreed. Its a global phenomenon. Airline shares are taking off all over the globe. Investors are "looking through" the Covid 19 pandemic assuming airlines will survive and soon thrive. Time for another Tui...

[nztx]

Agreed. Its a global phenomenon. Airline shares are taking off all over the globe. Investors are "looking through" the Covid 19 pandemic assuming airlines will survive and soon thrive. Time for another Tui...


My thoughts too

If AIR did not have the $900M Lifeline, Govt majority holder & a strangely allowable ability to legally operate on Retained Customer's Credits - then the whole outfit would likely be insolvent, parked up on the tarmac & potentially staring down the first throws of a Receivership/Liquidation right now - if there weren't strong tail winds ahead..

(like many of the other poor unfortunate badly affected businesses not hit by Labour's magic gold dust wand are likely facing)

[Beagle]

My thoughts too

If AIR did not have the $900M Lifeline, Govt majority holder & a strangely allowable ability to legally operate on Retained Customer's Credits - then the whole outfit would likely be insolvent, parked up on the tarmac & potentially staring down the first throws of a Receivership/Liquidation right now - if there weren't strong tail winds ahead..

(like many of the other poor unfortunate badly affected businesses not hit by Labour's magic gold dust wand are likely facing)

Further major gains on US airline stocks overnight but they're doing on average just 15% of the business they did at this time last year....makes perfect sense :rolleyes:

I remain of the view that its going to be a VERY long time before AIR is flying to most of its former network. https://www.cnbc.com/2020/06/04/covid-19-update-will-immunity-passports-let-people-travel-again.html

JetStar will hopefully be back on 1 July. https://www.newshub.co.nz/home/travel/2020/06/jetstar-offering-cheap-airfares-post-covid-19-including-34-auckland-wellington-flights.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Saturday+6+ June+2020

[bull....]

50+% gains since low lol this is insane good if you hold though

should be big gains monday , air stocks in the US are up 100% this week

[Blue Skies]

should be big gains monday , air stocks in the US are up 100% this week


You're probably right, but there's a yawning gap between the position US airlines & AIR find themselves in.
As Gregg Foran said last Friday on radio interview, 2/3rds of AIR revenue was International & thats all gone. ( a significant part of that was US routes which won't be back anytime soon, not a lot of profit in Trans Tasman)
Domestic accounts for only 1/3rd of their revenue so that's all they've got to 'revive, survive & thrive' (nod to the marketing dept) on.
At mo Domestic is operating on about 30% of normal & they are aiming to achieve 50% before the end of the year.


There seems to be a perception amongst recent AIR investors that the airline is too important to NZ to be allowed to fail, so their investment is completely safe. This was stated to me again this morning by a recent investor.
Foran stated AIR will need the Govt loan within months & will need all of it.
As I understand it, the Govt loan is 'convertible' so if AIR are unable to repay it, the Govt will convert the loan to shares in the remaining 48% on AIR they don't already own, severely diluting the value of other shareholders shares. I suppose the Govt could write off the $900M loan but can't really see that being a politically acceptable option, bailing out private 'wealthy' shareholders with tax payers money when Health Education Housing etc will be crying out for money.
Is that the way others more informed than myself see it?

[Cadalac123]

American Airlines up 100percent plus baby

[winner69]

AIR never actually said so but many analysts / commentators have said AIR made diddly squat out of their long haul operations....all their profit was domestic and trans-tasman

Made heaps of sitting on prepaid fares though

[CKWJ]

As I understand it, the Govt loan is 'convertible' so if AIR are unable to repay it, the Govt will convert the loan to shares in the remaining 48% on AIR they don't already own, severely diluting the value of other shareholders shares. I suppose the Govt could write off the $900M loan but can't really see that being a politically acceptable option, bailing out private 'wealthy' shareholders with tax payers money when Health Education Housing etc will be crying out for money.
Is that the way others more informed than myself see it?

The government set the terms of the agreement, AIR accepted them. Shareholders were diluted in the last bailout, so I don't see it happening any other way. Obviously they have to start using the loan first, and use it all up. So we just have to wait and see how long that all takes.

Others mention a capital raise, perhaps they're not doing it because they know the government is going to need to convert the loan and dilute the minority shareholders. Asking them to put money in only to be severely diluted in a short space of time is no doubt on Mr Foran's mind.

The bottom line is once AIR comes to the end of the loan and may need even more cash, the government can convert, dilute, and provide extra support as needed. The alternative is to let the whole thing fail and all the shareholders lose everything, government and minority shareholders alike. History shows they're not going to let that happen, but it will be a bitter pill to swallow and a lesson learned for some.

[Blue Skies]

AIR never actually said so but many analysts / commentators have said AIR made diddly squat out of their long haul operations....all their profit was domestic and trans-tasman

Made heaps of sitting on prepaid fares though


I don't think Trans Tasman was very profitable, too much competition from low cost carriers plus BARNZ (Board of Airline Representatives) says Trans Tasman flight Airport charges, taxes levies & Air Traffic Control charges are too high & make up more than half the cost of the ticket & and airlines will be looking for more profitable routes.
On other hand, North America, esp Houston Chicago much more profitable.

[Beagle]

You're probably right, but there's a yawning gap between the position US airlines & AIR find themselves in.
As Gregg Foran said last Friday on radio interview, 2/3rds of AIR revenue was International & thats all gone. ( a significant part of that was US routes which won't be back anytime soon, not a lot of profit in Trans Tasman)
Domestic accounts for only 1/3rd of their revenue so that's all they've got to 'revive, survive & thrive' (nod to the marketing dept) on.
At mo Domestic is operating on about 30% of normal & they are aiming to achieve 50% before the end of the year.


There seems to be a perception amongst recent AIR investors that the airline is too important to NZ to be allowed to fail, so their investment is completely safe. This was stated to me again this morning by a recent investor.
Foran stated AIR will need the Govt loan within months & will need all of it.
As I understand it, the Govt loan is 'convertible' so if AIR are unable to repay it, the Govt will convert the loan to shares in the remaining 48% on AIR they don't already own, severely diluting the value of other shareholders shares. I suppose the Govt could write off the $900M loan but can't really see that being a politically acceptable option, bailing out private 'wealthy' shareholders with tax payers money when Health Education Housing etc will be crying out for money.
Is that the way others more informed than myself see it?

Neither AIR nor the Govt have disclosed the conversion terms of that loan. The only other clues we have that it might be very tough on minority shareholders is the eyebrow raising interest rate the Govt are charging AIR of up to 9% " the Government having the ability to seek repayment through a capital raise by the airline after six months, or converting the loan to equity (subject to compliance with laws and any necessary regulatory and/or shareholder approvals". Extract from 20 March loan agreement announcement.

One final clue is that the next business day after the 20 March 2020 loan agreement the share price of AIR was just 80 cents.
Is it possible that AIR being desperate for the money agreed to give the N.Z. Govt the option to convert its loan at a price of the lower of the volume market weighted average price before a new market capital raise or perhaps as little as 50 cents per share ?

I know Jardens have warned their clients of the strong possibility of shareholder dilution when they came to a target price of just from memory 80 cents.

Hey Winner, guess what flight level the average analyst has AIR at in 12 months time https://www.marketscreener.com/AIR-NEW-ZEALAND-LIMITED-6491407/consensus/ Yeap, you guessed it, FL100 ;)

[King1212]

2016....AIR announced record profit ...special dividend 25c. SP went down to $1.70

Now...AIR only running at 5% of entire business...and SP is almost the same with 2016 financial year.

Oh Lord...what is going on with our greedy world. I think all fundies will use this trap to slowly exit and all be left newbies....

I am like you Master Beagle . Too scare and look at the current fundamentals... basically is not connecting with the real world

I hope I am wrong....at the means time...enjoy the gain guys. . ....

[winner69]

This random guy on sharesies is on to it

I think you're all underestimating what's going to happen if the tasman bubble comes into play. It's hoped to be started up by the end of July so it's really anyone's guess. If the announcement is made international travel can resume I doubt the share price will crash,I'd wager the opposite and we'd see it hover at 2.10

[King1212]

Classic ....all these newbies at the sharies. They all said...long term...long term..but once u are the online flat form and u are able to sell n buy....when the market in bear again....all the sheeps will follow ..

Mark my word....so far...my gut always right...

[Beagle]

2016....AIR announced record profit ...special dividend 25c. SP went down to $1.70

Now...AIR only running at 5% of entire business...and SP is almost the same with 2016 financial year.

Oh Lord...what is going on with our greedy world. I think all fundies will use this trap to slowly exit and all be left newbies....

I am like you Master Beagle . Too scare and look at the current fundamentals... basically is not connecting with the real world

I hope I am wrong....at the means time...enjoy the gain guys. . ....

I was an investor at that time and really enjoyed that 25 cent special divvy and the 10 cent ordinary divvy that went with it and thank you for reminding me mate, the business was in vastly better shape than it is presently. There is no comparison, complete chalk and cheese.

I wonder if it is a coincidence that many think of the shareies crowd as the "shoeshine crowd" like the old shoeshine boy, the last to hear and act and that both shoeshine and sharsies start with "sh" In terms of investment outcomes I got to pondering what four letter word might best describe the likely outcome they will get from their speculation that also starts with sh.. ? Hmmm

[winner69]

I was an investor at that time and really enjoyed that 25 cent special divvy and the 10 cent ordinary divvy that went with it and thank you for reminding me mate, the business was in vastly better shape than it is presently. There is no comparison, complete chalk and cheese.

I wonder if it is a coincidence that many think of the shareies crowd as the "shoeshine crowd" like the old shoeshine boy, the last to hear and act and that both shoeshine and sharsies start with "sh" In terms of investment outcomes I got to pondering what four letter word might best describe the likely outcome they will get from their speculation that also starts with sh.. ? Hmmm

There’s over $80 million invested in that sharesies ...pretty rich shoeshine crowd

Mind you average wallet about $1,400

[King1212]

Not only on sharies...a lot of them have asb ac n direct broking too...a lot of them are reading your posts...n all laughing at us ..... thinking we all here missed the boat.....

[Jaa]

Air NZ's share price performance is not out of whack with other global airlines. Unlike Singapore and Cathay, Air NZ has an almost COVID free and profitable domestic market to fly in.

While historically Trans Tasman has not been very profitable for Air NZ this has not been true for the last 5 years or so where Air NZ has dominated its competitors and made good profits. Its most profitable long haul routes was always the USA routes, one of which is still in operation.

Throw in government wage subsidies, reduced aviation fees, higher prices, lower fuel costs, reparation and increased cargo flights/prices and it is pretty obvious some on here have been overly pessimistic.

Airline share price comparison, from 2020 low to post mid-March high (mostly yesterday's closing price).

Air NZ
L: 0.8 H: 1.64 = 105%

Air Asia
L: 0.5 H: 0.86 = 72%

American Airlines
L: 8.25 H: 18.59 = 125%

Cathay Pacific
L: 7.50 H: 9.39 = 25%

Delta
L: 17.51 H: 34.16 = 95%

Jet Blue
L: 6.61 H: 13.69 = 107%

Qantas
L: 2.03 H: 4.63 = 128%

Singapore Airlines
L: 3.53 H: 4:41 = 25%

Southwest Airlines
L: 22.46 H: 38.18 = 70%

United Airlines
L 17.80 H: 42.40 = 138%

Ignoring the two Asian airlines that lack domestic markets it would seem Air NZ's share price run still has a bit to go compared to other full service airlines. A 125% increase from the bottom would give $1.80, price target for Monday?

[Waltzing]

i thought AIR had some oil hedging. Some one even calculated the value of the hedges? prehaps some with expertise in that area could enlighten us?

[justakiwi]

Really? your gut is always right?

I have no personal opinion on AIR and have never held, but the reality is - none of you actually know anything for certain, anymore than anyone else does. It is all speculation and supposition, until it’s not. Some of those Sharesies “sheep” as you call them, are not stupid. They took a calculated risk buying AIR cheap, and are willing to take a long term gamble on it paying off. Just as more than a few of us here, are with Blis.

Who knows? In 15-20 years AIR might reward them for that risk. None of you know for sure, one way or the other. These are not normal times. Anything is possible.

Just saying.


Classic ....all these newbies at the sharies. They all said...long term...long term..but once u are the online flat form and u are able to sell n buy....when the market in bear again....all the sheeps will follow ..

Mark my word....so far...my gut always right...

[King1212]

Yup...so far always right...

[justakiwi]

There’s always a first time to be wrong.


Yup...so far always right...

[Waltzing]

15 to 20 years? for an Air Line? Better to have bought AIA for an investment over that time frame surely. Profits for air lines also seem have a relationship to Jet Fuel prices and state support for competition. I would say SKC has a more certain future than AIR. The other platform (SHARES) seems to have a fee structure that best suite short term trading ?

[Beagle]

Finally...some straight talk and a change of tack on the usability of credits https://www.rnz.co.nz/national/programmes/checkpoint/audio/2018749486/air-nz-changes-tack-on-credits-for-customer-s-family I can now stop calling them a pack of tone deaf idiots as they have finally woken up and smelt the coffee as I suggested. Now if they can finally get their credit system online and up and running, that would be good.

https://www.msn.com/en-nz/news/other/air-nz-losing-dollar5m-a-day-bracing-for-more-job-cuts-chief-exec/ar-BB154Jgp?ocid=se2

Let me help the shoeshine crowd out with the maths. If you run a BBQ that burns $5 million cash a day, over a period of 12 months that $1,825 million. AIR had total shareholders equity of $2,089 million as at 30 June 2019. Now, I acknowledge the rate at which this BBQ will consume cash might come down slowly a bit as domestic passengers ramp up but not even the most optimistic of people is thinking the effects of this Covid 19 will be over in 365 days. The company itself is talking 800 days and by then only being back to 70% of its former size.

"Blind Freddy" should be able to see that AIR are in the fight of its 80 year corporate life for their very survival here and absolutely will need substantial fresh capital at some point in the next 12 months. You can be almost certain the Govt wrote itself into an advantageous position with the capital raise as part of their $900m loan agreement. Someone has to pay for all Cindy's generous helicopter money and rich capitalist shareholders will do just fine as the sacrificial lambs...

[King1212]

Don't waste your valuable time here master Beagle....these crowd don't even care...they all laughing at us ...old farts that missed the boat.

Some here even see that domestic route level 1 would cover n profitable. Some even think long term....bring the tui plz...

They did not think about March crash.....all sheeps were following the lead to the clip ....

Let the shorters eat them up ...

[stoploss]

Under level 1 everyone will be using up their credits . So the 600mio Air NZ talk about having which is really these credits will disappear . Meantime the airline has to pay pilots, aircrew, maintenance , fuel , parking charges for the planes not being used . This will take them deeply into the negative as effectively no cash is coming in .

[Justin]

they have to burn 5million a day with wage subsidy，curious how much they have to burn each day after wage subsidy.

they had 79million wage subsidy already and will apply for another 37million.

[Stranger_Danger]

"Blind Freddy" should be able to see that AIR are in the fight of its 80 year corporate life for their very survival here and absolutely will need substantial fresh capital at some point in the next 12 months. You can be almost certain the Govt wrote itself into an advantageous position with the capital raise as part of their $900m loan agreement. Someone has to pay for all Cindy's generous helicopter money and rich capitalist shareholders will do just fine as the sacrificial lambs...

The problem is every Sharesies-type buyer I know is a socialist. And a voter, in an election year.

Therefore, I could easily see some absolutely necessary and urgent decisions that need to be made now being kicked down the road as ye olde BBQ keeps on burning.

I think anyone long Air NZ is out of their mind - but there is a reason I'm not short it.

[justakiwi]

The problem is every Sharesies-type buyer I know is a socialist. And a voter, in an election year.

That’s a major assumption on your part.



I think anyone long Air NZ is out of their mind - but there is a reason I'm not short it.

Maybe you misinterpreted my previous comment. To clarify ... I think you will find that a large number of recent AIR investors, made a calculated decision to buy a “lottery ticket.” A long shot gamble. Not unlike a bet on a rank outsider at the races.

A heck of a lot more interesting than buying a lotto ticket.

[tommy_d]

flew on an air new zealand flight yesterday. The spacing between seats seems a waste of time given how people go about putting their bags in the overhead, taking them down, shuffling around during boarding, etc. When the virus gets here again, flights will be a massive spread risk.

[patrick]

Say AIR starts flying to Brisbane in October with huge demand for seats. I feel sure bookings will be “organised” so that cash buyers will get high demand seats. NOTHING has been said about holders of “credit” getting equal opportunity.

[Beagle]

The problem is every Sharesies-type buyer I know is a socialist. And a voter, in an election year.

Therefore, I could easily see some absolutely necessary and urgent decisions that need to be made now being kicked down the road as ye olde BBQ keeps on burning.

I think anyone long Air NZ is out of their mind - but there is a reason I'm not short it.

Probably the biggest disconnect between the market and the underlying economic demand for services that exists on the entire NZX. The most amazing phenomenon is this is certainly not limited to AIR on the NZX and share prices of many airlines don't make sense.

The interesting thing is AIR seem to be in conflict with almost everyone at the moment...aircraft manufacturers could be next. https://www.frequentbusinesstraveler.com/2020/06/airbus-may-sue-airlines-over-undelivered-jets/

What do AIR do with all their new aircraft orders if 777's are still sitting around corroding away and gathering dust in late 2021 ? Massive write-down of circa $400m on 777-200's coming in FY20's financials' (some of which are quite old). Could we see all the 777-300's written down in FY21 at perhaps double the cost ?...but nobody cares because that's an extraordinary item of perhaps $800m and doesn't affect future earnings...but what earnings ?

AIR should crack on and do a massive capital raise of 2:1 at 75 cents and tap into the mad keenness of the airline recovery story before everyone wakes up and smells the coffee and realises how grim and enduring the situation really is.

[winner69]

Seems a few aviation commentators have become social media ‘influencers’ and calling for the government to step and give AIR an interest free couple a hundred million loan and just give all the punters a refund ...problem solved

[Stranger_Danger]

AIR should crack on and do a massive capital raise of 2:1 at 75 cents and tap into the mad keenness of the airline recovery story before everyone wakes up and smells the coffee and realises how grim and enduring the situation really is.

See, this is where it gets really interesting.

For the sake of argument, lets say that a lot of the upward price movement in AIR has been driven by retail investors. Lets also assume a lot of these were "one off" investments, people seeing a "once in a lifetime" chance to buy a name they know, or buying on momentum, buying because friends are, buying because they temporarily had more time and money due to lockdown etc. Assume some of this stuff is at least partially true and in the price.

Now assume that big pocketed investors and institutions are capable of doing maths, and researching pandemics, and understanding how marginal airline economics are in even a benign environment, and can think about politics, and second and third order impacts etc. They can see that not only is Air NZ not a bargain - by most definitions, it is insolvent.

So, how do you price a rights issue? Especially since you have the Government shareholding, the Government loan, a growing resentment about the refunds policy, in an election year?

The key problem you have is that the people happy to chase Air NZ upwards are NOT the people capable of providing the sort of money needed to secure the long term future of the business.

Let's say the punters manage to get it up to $2.00 (get a quote on GNUS or LK or HTZ and it is clear Air NZ is a minor insanity compared to these : $2 could happen), and no sane investor or institutional manager who wants to keep their job would touch it near that price.

How do you price the rights issue?

Price it at $1.50 to $1.75 and you might learn that the sort of people able to write huge cheques are not interested anywhere near that range.

Price it at 35 to 75 cents and you will likely get your money, but a lot of the smaller new investor/Sharesies/momentum types wouldn't see this coming and would be furious at the market price after that happens. "What? We thought this couldn't fail, it has the backing of the Government!" Even worse, if a lot of these were "one off" sort of investments/investors, they may well be unwilling or unable to buy the "cheap" shares in the rights issue.

The difficult bit is that the people paying the high price don't have the money needed to save the airline, and the people with the money to save the airline would not invest at the current price. With the clock ticking. In an election year. Oh what fun!

[Beagle]

Average analyst price target one year hence is $1. To get the massive institutional support this needs it would have to be priced at a considerable discount to that.
The company needs the money in the near future, no question about that. Makes a lot of sense to strike while the ducks are quacking, 2:1 at 75 cents underwritten by the Govt would raise about $1.6 billion and would be a smart move in my opinion but as you say, we're up for an election shortly so the Govt getting a bigger stake in AIR is not the right optics at this point in time.

[King1212]

https://www.google.com/amp/s/www.newshub.co.nz/home/money/2020/06/spike-in-amateur-investors-during-level-4-lockdown.amp.html

Here we go. ...one of the main reason ....market is on the high now...

And AIR is also one of the top 10 shares that retail bought....

[winner69]

Email from our Cam this morning trying to explain/justify the situation. So many buzz words it was ‘eye watering sad’

The more they try to justify it the deeper the hole they are digging for themselves becomes.

Did admit they are essentially broke

PS ... couldnt bring myself to watch the video he included.

[King1212]

What broke.....Cindy will give more money...no worries

[winner69]

@thestinkmarket
In Chapter 20 of The Intelligent Investor, Ben Graham said the biggest returns come to those who pump penny stocks on Twitter.

[sb9]

Caught up with couple of mates over weekend first time since lockdown, among the chat came up shares and both of them (and their mates) have all piled into buying into AIR recently. All of these guys are first timers into share investing.

Does seem as though AIR to truly good value in their opinion in recent times.

[BlackPeter]

@thestinkmarket
In Chapter 20 of The Intelligent Investor, Ben Graham said the biggest returns come to those who pump penny stocks on Twitter.

Interesting - which issue of the book do you use? Mine talks in chapter 20 about "margin of safety".

As well ... didn't Ben Graham die in 1976? Amazing he predicted already before his death the rise of twitter (established 2006). Or was this a post humus prediction? Book maybe updated in a seance?

[blackcap]

Caught up with couple of mates over weekend first time since lockdown, among the chat came up shares and both of them (and their mates) have all piled into buying into AIR recently. All of these guys are first timers into share investing.

Does seem as though AIR to truly good value in their opinion in recent times.

Some of the thinking of these first timers is that the share is halved in price, it must be good value. Some really weird thinking out there. My brother for instance differentiates the power stocks on price. The Genesis SP is less than Meridian's so must be a better investment. Or also "which one has the highest yield". Crazy times.

[winner69]

Interesting - which issue of the book do you use? Mine talks in chapter 20 about "margin of safety".

As well ... didn't Ben Graham die in 1976? Amazing he predicted already before his death the rise of twitter (established 2006). Or was this a post humus prediction? Book maybe updated in a seance?

Jeez BP ..you looked up Chapter 20 :eek2:

Chapter 15 apparently talks about how good stock buy backs are good for punters

[Stranger_Danger]

What an announcement. No mention of refunds policy, or what the accounts would show if refunds were made. No sales or profit projections or even hints. Nothing about the financial impact of the grounded aircraft, nothing about fuel hedge losses, nothing about leasing liabilities.

Shares up by 20 cents?

[winner69]

What an announcement. No mention of refunds policy, or what the accounts would show if refunds were made. No sales or profit projections or even hints. Nothing about the financial impact of the grounded aircraft, nothing about fuel hedge losses, nothing about leasing liabilities.

Shares up by 20 cents?

You should have read the first sentence

Please note that this email is not intended to provide a forecast or guidance on revenue or earnings for the 2020 financial year.

Just a communication to staff in these ‘eye watering times’

[Stranger_Danger]

Oh, I read it. When something is released to market, it isn't just a communication to staff.

[blackcap]

You should have read the first sentence

Please note that this email is not intended to provide a forecast or guidance on revenue or earnings for the 2020 financial year.

Just a communication to staff in these ‘eye watering times’

The announcement was deemed "P" though... (funny there was no quantifiable data except the 70% thing and the trimming of workforce thingee)

[bull....]

if there going to trim the workforce more shortly to reduce costs , i will have to extend the time before they access the govt loan to more than 5-6mths time , this announcement should be a good day today

[bull....]

healthy profits by 2022 foran says should be at $3 by then lol paying 20c divs again... hopefully we say

[trader_jackson]

At $1.79 this would have to be the most overvalued stock on the NZX right now by a blue mile.

Simply stunning a company that is going to be losing over a billion dollars in the next few years, going to have huge dilution when the government converts their un-payable loan to equity, operating in an industry with no barriers to entry, potentially facing a lawsuit over refunds, and (at best) will be a third smaller than it was previously (when the share price was $3)... is valued at $2 billion bucks.

What is Mr Market seeing that I am not?

[bull....]

will air do a american airlines this week , that would be amazing

[Quantitative Easing]

Airline stocks are running on sentiment at the moment. So is most of the market.

[Waltzing]

If this thing moves back over 2.0 im going to reach for the sick bag... lucky i moved the losses on air back into KMD, OCA and ARG... did someone in the cockpit just throttle up on a parked grounded fleet?

[bull....]

they might not have to use the govt loan , cost cutting may bring them back to profit alone.

[Beagle]

Trading on nothing but momentum and recovery sentiment. Facts and numbers seem irrelevant at this point. Its total madness.

[k14]

Email from our Cam this morning trying to explain/justify the situation. So many buzz words it was ‘eye watering sad’

The more they try to justify it the deeper the hole they are digging for themselves becomes.

Did admit they are essentially broke

PS ... couldnt bring myself to watch the video he included.
I got sent it at 6:54. Must be some midnight oil (avgas?) being burned at the moment! It seems they are modifying their credit system slightly, bowing to public pressure.

[bull....]

Trading on nothing but momentum and recovery sentiment. Facts and numbers seem irrelevant at this point. Its total madness.

beagles short covering is driving the price higher lol

[blackcap]

Trading on nothing but momentum and recovery sentiment.

Agree. However the market can remain irrational longer than you can remain solvent is a saying that has stuck with me for a long time now. I am short AIR and luckily there are no margin calls but this ride will be interesting to say the least. Might have to short a few more at these levels.

[bull....]

Agree. However the market can remain irrational longer than you can remain solvent is a saying that has stuck with me for a long time now. I am short AIR and luckily there are no margin calls but this ride will be interesting to say the least. Might have to short a few more at these levels.

another shorter to be burned , you and beagle can cry together

[Stranger_Danger]

Bahahahaha.

Not long. Not short. Not even surprised anymore.

[Blue Skies]

they might not have to use the govt loan , cost cutting may bring them back to profit alone.


Last Friday, Greg Foran did state in no uncertain terms AIR would need to start drawing down on the govt loan within a couple of months AND would need ALL of it. (& this without refunding any of pax prepaid airfares) .
Presumably things haven't changed that much over the weekend!

[Beagle]

they might not have to use the govt loan , cost cutting may bring them back to profit alone.


beagles short covering is driving the price higher lol

You're first comment flies directly in the face of what the CEO said on Friday. Nobody suddenly conjures up a spare billion out of thin air. We don't live in some "Alice in Wonderland alternative reality" mate.

My short went on at $2.80. I am very comfortable.

[Waltzing]

profitable from 2022 and 70% of its previous size on CNBC ASIA news.

Now can someone please explain a share of price of 1.75?

it can only be described as a complete D.....

im with the Brilliant MR B on this one....

2024 ? i think this is a 5 year story on this stock.

I think we are all going to be flying Air Singapore back to europe in 2022.

[Beagle]

profitable from 2022 and 70% of its previous size on CNBC ASIA news.

Now can someone please explain a share of price of 1.75?

it can only be described as a complete D.....

im with the Brilliant MR B on this one....

2024 ? i think this is a 5 year story on this stock.

I think we are all going to be flying Air Singapore back to europe in 2022.

You're on too it ! I also think this is a 5 year story, won't make any meaningful money until FY25. That would be my choice for a trip to Switzerland too, one of the last airlines to have decent sized economy seats and really spacious business class that is REAL business class. Still working on Mrs Beagle, she's a very reluctant flyer.

[Leftfield]

You're on too it ! I also think this is a 5 year story, won't make any meaningful money until FY25. That would be my choice for a trip to Switzerland too, one of the last airlines to have decent sized economy seats and really spacious business class that is REAL business class. Still working on Mrs Beagle, she's a very reluctant flyer.

Many of my high flying friends caught out by AIR's non refund policy.......in future they will only travel on airlines that are required by law to refund. Not a good look for AIR messing with their once loyal customers, taking advantage of a legal loophole that needs closing.

[Beagle]

Many of my high flying friends caught out by AIR's non refund policy.......in future they will only travel on airlines that are required by law to refund. Not a good look for AIR messing with their once loyal customers, taking advantage of a legal loophole that needs closing.

I wouldn't mind having a few quid betting that your friends will have memories like an elephant. AIR are burning up high value customer goodwill quicker than an F111 burning av gas in a dump and burn https://www.youtube.com/watch?v=WpPEdOMSIgQ Mrs B and I nearly burst our eardrums when one of those puppies flew overhead at 100 feet in full afterburner at an airshow at Whenuapai a few years back

I see Avalon airshow has been deferred to November 2021 (shortly after some old dog turns 60). https://www.airshow.com.au/airshow2021/index.asp
Attending that has been on my bucket list for a while. Americans might be kind enough to send an F22 over again. https://www.youtube.com/watch?v=TJD1xZZCNAA
Once upon a time some pretty good Ford's were made at Geelong...how times have changed :(

[macduffy]

one of the last airlines to have decent sized economy seats and really spacious business class that is REAL business class.

But will they still have those big seats in 2025, Beagle?

;)

[Jaa]

"Now we can safely fill those planes" - Jacinda Arden, 8 June 2020

Legend.

[samjaynz]

I wouldn't mind having a few quid betting that your friends will have memories like an elephant. AIR are burning up high value customer goodwill quicker than an F111 burning av gas in a dump and burn https://www.youtube.com/watch?v=WpPEdOMSIgQ Mrs B and I nearly burst our eardrums when one of those puppies flew overhead at 100 feet in full afterburner at an airshow at Whenuapai a few years back

I see Avalon airshow has been deferred to November 2021 (shortly after some old dog turns 60). https://www.airshow.com.au/airshow2021/index.asp
Attending that has been on my bucket list for a while. Americans might be kind enough to send an F22 over again. https://www.youtube.com/watch?v=TJD1xZZCNAA
Once upon a time some pretty good Ford's were made at Geelong...how times have changed :(

One of my greatest travel "cock ups" was booking what appeared to be dirt cheap Jetstar fares for the wife and I from Melbourne to Sydney, made even better by the fact that our friends in Sydney (with whom we were to stay) were in Melbourne, and flying to Sydney (albeit on Virgin) at the same time as us and offered us a lift in their paid-for work taxi.

I sent the flight details to my friend, who kindly informed me that I had inadvertently booked a flight leaving from Avalon airport (yep, didn't check the booking).

$150 for an Uber later, and that cheap flight wasn't such a good deal.

[justakiwi]

Bloody hell! You’re younger than me! I thought you were one of the “old codgers” here ;)



I see Avalon airshow has been deferred to November 2021 (shortly after some old dog turns 60)

[winner69]

AIR might need to answer a few questions

https://www.stuff.co.nz/business/industries/121757112/nzx-making-enquiries-about-air-new-zealand-statement-to-stock-exchange

Still seems strange Cam goes around essentially pleading insolvency and no ‘official’ comment is made ....taking the mickey out of us I reckon.

[Waltzing]

well prehaps i need to reread everything and missed the rally.. more profitable than before with 5 million less customers? I really dont want to have cash lying around that wont make any money in that time frame which means yet again i will miss the AIR noise bleed rallies. Just like last time and then invest in them for dividend only to be warren buffetted again (air pocket out there somewhere, oil? hmm? carbon taxes)? IS MR B going to buy this... no i dont think he is...I do believe that this is price sensitive just like sky city news that is marked "Not price sensitive" and the stock rallies.

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12338136

Fares from only $21 Woohoo, cheap fares with crappy service just like AIR's expensive fares with crappy service !!

Auckland to Queenstown for only $48...what a bargain !!!

[Jaa]

Air NZ's share price performance is not out of whack with other global airlines. Unlike Singapore and Cathay, Air NZ has an almost COVID free and profitable domestic market to fly in.

While historically Trans Tasman has not been very profitable for Air NZ this has not been true for the last 5 years or so where Air NZ has dominated its competitors and made good profits. Its most profitable long haul routes was always the USA routes, one of which is still in operation.

Throw in government wage subsidies, reduced aviation fees, higher prices, lower fuel costs, reparation and increased cargo flights/prices and it is pretty obvious some on here have been overly pessimistic.

Airline share price comparison, from 2020 low to post mid-March high (mostly yesterday's closing price).

Air NZ
L: 0.8 H: 1.64 = 105%

Air Asia
L: 0.5 H: 0.86 = 72%

American Airlines
L: 8.25 H: 18.59 = 125%

Cathay Pacific
L: 7.50 H: 9.39 = 25%

Delta
L: 17.51 H: 34.16 = 95%

Jet Blue
L: 6.61 H: 13.69 = 107%

Qantas
L: 2.03 H: 4.63 = 128%

Singapore Airlines
L: 3.53 H: 4:41 = 25%

Southwest Airlines
L: 22.46 H: 38.18 = 70%

United Airlines
L 17.80 H: 42.40 = 138%

Ignoring the two Asian airlines that lack domestic markets it would seem Air NZ's share price run still has a bit to go compared to other full service airlines. A 125% increase from the bottom would give $1.80, price target for Monday?

Share price closed at $1.79 but did hit a high of $1.825 so I shouldn't be too harsh on myself.

A lot of dribble on this thread since I posted the above but not one person engaged with my central point. Air NZ's share price has not gone up any more than comparable airlines overseas despite being in a materially better position (level 1 yo!). Guess those new investors been buying the shares of American Airlines, Qantas and United Airlines too. :p

[Snow Leopard]

....A lot of dribble on this thread....

except for you & winner69 with that Ben Graham twitter post.

PS. Making money on some airline stuff at the moment :mellow:

[Beagle]

Enjoy your temporary unrealised gains while they last. The market in regard to airline stock won't stay in "Alice in Wonderland" for too long. Reality will bite and when it does it will bite very hard.

[Snow Leopard]

Enjoy your temporary unrealised gains while they last. The market in regard to airline stock won't stay in "Alice in Wonderland" for too long. Reality will bite and when it does it will bite very hard.

you need to let go of your emotions, old dog.

[Beagle]

you need to let go of your emotions, old dog.

Good to have some theatre and barking. This would be a really dull place if everyone curled up like a cat and hardly ever meowed ;)

[Jaa]

Beagle you have had your nose in the weeds and missed the big changes.


" Flying 27% of last year's @FlyAirNZ passenger numbers which requires us to operate 51% of capacity." @CamWallace_NZ

What effect will the end of social distancing on flights have on Air NZ's load factor and profitability? I would say HUGE.

What effect will a COVID free NZ have on business and leisure travel demand? I would say HUGE.

Combined, Air NZ could have a profitable NZ domestic operation at something like 60-70% of its former capacity as early as July. Justifies a share price increase wouldn't you say?

[Beagle]

Late 2016 they had record profits of $663m, a business that was 100% intact, a really sound outlook and were paying twice a year dividends of circa 20 cps and the share price was $1.70.

Just think about that for a minute and compare that to the current situation. This year they will post a loss inclusive of extraordinary items of at least $663m. There will be no divideds this year or next and the future has never been more uncertain with Covid 19 rampant in most countries overseas. We are not materially closer to a vacine.
Domestic is such a small part of their business and JetStar are back on 1 July. They are basically doing NO international business.

To be clear here. What we are talking about is a complete chalk and cheese situation. They couldn't be more different. Nobody has any reliable way of predicting when they might be able to commence widespread international operations, it might be a completely different timetable to what AIR are expecting that they will get back to 70% by June 2022.

To further exacerbate shareholders medium term problems, analysts are cautioning that there is the very strong likelihood of the company needing to raise substantial capital in the near future.
I think Jarden's are on the money with their 12 months hence price target of 80 cents.
There are no big changes I have missed. The company itself has said they will need all of the Govt's $900m loan and will start drawing down on this within the next few months.
You don't need a Beagle's nose for trouble to see trouble coming here, its staring at you right in the face. Part of being a hungry dog is not just sniffing out the next big feed, its also sniffing out trouble ahead. Who wants to be kicked in the head ? Not me, but fill ya boots if you believe your own theories and good luck !!

[kiora]

Ah hum
What a booper AIR
A FB message I just received
"Wtf?
Air NZ “can’t afford” to pay out refunds but can afford to buy a good food producing farm (and a rather spectacular one at that) to blanket plant in pine trees to mitigate their carbon footprint.
Please like, share or do what you can to highlight this unbelievable, unacceptable and inconsistent action of Air NZ and their banking syndicate (and shareholders) who fund and support such ill conceived mitigants.
I’m looking for 500 likes and 500 shares. Surely you are as incensed as me and many others!
And if you haven’t done so already please check out www.50shadesofgreen.co.nz - you may feel motivated to make a donation which will help us bring more awareness to the concerns of many NZers. When good food producing land is at the crux of NZ’s survival (health) and revival (economy), it must not be blanket planted in pine. 70,000 ha already since OIO relaxation, Carbon speculation and removal of steeper country from allowable planting areas all collided to cause what’s happening now"

[Stranger_Danger]

Beagle you have had your nose in the weeds and missed the big changes.



What effect will the end of social distancing on flights have on Air NZ's load factor and profitability? I would say HUGE.

What effect will a COVID free NZ have on business and leisure travel demand? I would say HUGE.

Combined, Air NZ could have a profitable NZ domestic operation at something like 60-70% of its former capacity as early as July. Justifies a share price increase wouldn't you say?

They are both valid points.

To those I would add :

What effect will fuel hedge losses and aircraft lease negotiations have on their profits and financial position?

When will the rights issue happen and at what price?

What impact will competitors having a price war to generate precious cashflow have on an industry with already marginal economics?

How much of the Government loan will be called on, and what impact will this debt have on decisions other lenders make about future borrowing capacity?

What will be the impact on culture and efficiency of 4,000 people or whatever it is leaving the business when it comes to those that are still there?

Has any permanent brand damage been done with the refunds policy?

How many of the early flights will actually generate new cash rather than using up previous credits, given that cash expenses will be created by each flight?

I could go on.

There are positives, you are correct. I can see why people are comparing the next 3 months favourably against the last 3 months. But if you look at the bigger picture, you have a financially weakened company, with shell shocked staff, less customer goodwill, more debt, the potential for cutthroat price competition, consumers probably looking to be more frugal in a recession, all sorts of political intrigue in an election year, and you have all of this in an industry which is economically marginal at the best of times.

As a gambling chip you may get to sell higher to a bigger idiot? Sure. As a long term investment, at the current price, against the likely background going forward? Madness.

[Baa_Baa]

It, the share prices exuberance, does look like madness.

I was reflecting on the Jetstar pricing of their return to market, wondering if their parent sees this as an opportunity to loss lead their way into a long term gain in market share?

They certainly have much deeper pockets than air and are not as financially distressed.

[percy]

You must spread some Reputation around before giving it to Stranger_Danger again.

[k14]

Did anyone see Cam Wallace on Fair Go tonight explaining themselves? He re-stated the $100m cost of repayment to the customers. Going back a few pages there was debate over this number. Just seems way too low (I think they stated over 100k customers having credit)? If it is right, and $100m will break the bank, then Air NZ really are well and truly in the crap.

[Jaa]

Bravo, finally someone who wants to engage rather than look at past dog poo or whine about non-refundable flight credits. Most of what you state is now well understood by the market.


They are both valid points.

To those I would add :

What effect will fuel hedge losses and aircraft lease negotiations have on their profits and financial position?

More flying will see Air NZ eat into those fuel hedge losses faster. +ve
Lower fuel prices in the medium/long term +ve
Supply/demand dynamics will see Air NZ will hold the upper hand in any lease negotiations +ve


When will the rights issue happen and at what price?

A pro rata rights issue won't affect current shareholders so much if they take up their share and/or sell their rights. - Neutral to -ve
A rights issue and/or just a profitable domestic network will allow Air NZ to raise debt and not have to use the government facility. Just as Qantas did. +ve


What impact will competitors having a price war to generate precious cashflow have on an industry with already marginal economics?

What price war? No evidence of one yet. Rather the opposite, airline fares are at historic highs due to diseconomies of scale +ve

How much of the Government loan will be called on, and what impact will this debt have on decisions other lenders make about future borrowing capacity?

The Government loan's availability makes Air NZ more investable not less. Even if as above they don't use it. +ve

What will be the impact on culture and efficiency of 4,000 people or whatever it is leaving the business when it comes to those that are still there?

The effect will be less than the galvanising and efficiency gains crisises tend to produce. Some efficiency gains like training customers to check-in themselves on their mobile phones will produce long term gains. +ve

Has any permanent brand damage been done with the refunds policy?

Overblown. I have always booked non-refundable tickets and had to burn a few in my time. Those are the risks and no one ever offered me a credit. Air NZ have moved to make the credits more flexible and access will improve with the online system. Other airlines are no better if not worse. All will be forgotten by 2021. - Neutral

How many of the early flights will actually generate new cash rather than using up previous credits, given that cash expenses will be created by each flight?

This is a fair point and will be a drag on the turnaround. -ve


Now consider the other positives, some of which I posted a few days back.

More wage subsidies ($37m), reduced government fees for aviation, lower wages, lower fuel prices, lower lease costs, reparation flights, cargo flights, increased cargo prices, heavy domestic tourism promotion, NZers travelling domestically rather than internationally and a Tasman and Pacific bubble on the horizon. All this before a vaccine or testing/treatment advances.

[Scrunch]

Enjoy your temporary unrealised gains while they last. The market in regard to airline stock won't stay in "Alice in Wonderland" for too long. Reality will bite and when it does it will bite very hard.

Quite possibly, but the NZ market has also shown it can keep the price of a market darling well above what analysts and others think is sensible. This situation can be maintained for years and years. For example lets consider the Port of Tauranga. They have only had two surplus's over $100m (but one of these involved abnormals and was in 2013). However, since October 2017 the market cap's been over $3b ($4.41) for a PE of >30x. Even during the recent march meltdown the price only fell to $4.90 (for a market cap of $3.3b). While the share price has been as high as $8, the mean market consensus as per market screener has had a maximum of $4.79 (and the highest target price of anyone has been $5.47).

The relevance to Air? - If the market can fall in love with a port, could it fall in love with an airline and keep Air's price in the stratosphere for years?

[BIRMANBOY]

Looking back in this thread to late march early April when the SP was 80 cents general consensus was bleak indeed. Since then SP has steadily climbed back up to todays price 1.78. The cries of "madness" have been steady and un-relenting. I thought this was supposed to be a traders forum lol...did anyone do any trading or did you all just buy into the cheerleaders prognostications and sit on your hands? Just Curious :D

[Baa_Baa]

Looking back in this thread to late march early April when the SP was 80 cents general consensus was bleak indeed. Since then SP has steadily climbed back up to todays price 1.78. The cries of "madness" have been steady and un-relenting. I thought this was supposed to be a traders forum lol...did anyone do any trading or did you all just buy into the cheerleaders prognostications and sit on your hands? Just Curious :D

Some people are long and have no clue about where or when to close out

Some people are short and have no clue about where or when to close out

There are some who have done nothing and are bewildered confused and still do nothing

There are others who see upside while others see downside, but still do nothing

The majority I suspect are on the sidelines intrigued by the spectacle that air is

Confounding confusing but not engaged. They are the safest

This is a disaster in the making only propped up by the government long.

Which will if it eventuates kill off all the small holders, but not necessarily benefit the shorts

[RupertBear]

You must spread some Reputation around before giving it to Stranger_Danger again.

yes I got the same message, thanks for your post Stranger Danger

[RupertBear]

Same goes to you too Baa Baa :)

[BIRMANBOY]

Very poetic Baa Baa:t_up: What I find curious is it seems everyone on this thread is, as you said, showing symptoms of 'fear and loathing" but in the meantime the alternate reality of the marketplace has bypassed this bunch of posters. I realize that hindsight is easy to comment from, but it seems as though there was some sort of collective hypnosis operating. The underlying theme was economic fundamentals are dire therefore the SP must follow this. Well a good lesson for all I suppose...we should all realize we know jack s**t about how the share market operates...instead of trying to will the market into doing what we think it should do, we should accept that we are merely observers.

Some people are long and have no clue about where or when to close out

Some people are short and have no clue about where or when to close out

There are some who have done nothing and are bewildered confused and still do nothing

There are others who see upside while others see downside, but still do nothing

The majority I suspect are on the sidelines intrigued by the spectacle that air is

Confounding confusing but not engaged. They are the safest

This is a disaster in the making only propped up by the government long.

Which will if it eventuates kill off all the small holders, but not necessarily benefit the shorts

[Snow Leopard]

To quote (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/354272/324009.pdf) Greg:
"The good news is that Air New Zealand could be more profitable in the future than before, allowing us to start reinvesting in our customer experience, to share the rewards with Air New Zealanders via consistent profit share bonuses and to distribute dividends to our shareholders"

Which I presume means we are going to make you whinging b*****s pay through the nose for flights as you did not support us in our hour of need.

And when those profits roll in and the dividends weigh down the bank balance those same whingers will be proclaiming Greg Foran as the greatest thing since Chris Luxon.

[BIRMANBOY]

And with those aspirational words...he has both intrigued new investors, placated existing and future dividend seekers and shown how important a few well chosen media blurbs can be. Previously accused of not responding and lack of communication with shareholders, evidently he said something along the line of " I'm busy trying to get this business going again and when I have something worth saying I'll say it." Good luck to him. Must admit the dividends were sweet for several years so the absence will be missed:crying:
To quote (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/354272/324009.pdf) Greg:
"The good news is that Air New Zealand could be more profitable in the future than before, allowing us to start reinvesting in our customer experience, to share the rewards with Air New Zealanders via consistent profit share bonuses and to distribute dividends to our shareholders"

Which I presume means we are going to make you whinging b*****s pay through the nose for flights as you did not support us in our hour of need.

And when those profits roll in and the dividends weigh down the bank balance those same whingers will be proclaiming Greg Foran as the greatest thing since Chris Luxon.

[dreamcatcher]

Amazing 565 million shares traded NZ-AUS since 2/3/2020 heaps of M&D retail investors?. Think SP will easily break $2 possibly this week. DOW overnight looking to open green again and Aus in catch-up after Monday's Queens Birthday holiday there.

[Snow Leopard]

This “could be” talk is a strange one....

Under-promise and Over-deliver. Greg is the Man I am telling you. :p

[Waltzing]

As stated above .

"We have set the annual results announcement in late August 2022, which is in around 800 days’ time, as the target date for Air New Zealand to report we are starting to earn healthy profits again even though we may be only 70 per cent of our pre-Covid-19 size."

and the next statement.

He said he hoped Air New Zealand in 2022 would be flying about 13 million customers a year versus almost 18 million pre-Covid-19.

"Air New Zealand could be more profitable in the future than before, ."

and finally

"reduce costs by 150 million more"

and if they do fly 13 million passengers then some serious number crunching is required to arrive at a new profit and loss estimate.

but calculating this is difficult due to routes and prices. impossible to calculate?

However if the numbers stack up then perhaps there actually maybe some fundamentals for this current valuation?

after all no one has yet to publish here a comprehensive profit and loss estimate and so the market climbs higher becuase all markets are climbing higher and momentums trend is your friend....

We need some numbers based on AIR new reconstructed model.

Stocks often go higher and higher until the actual is published..

[Blue Skies]

[QUOTE=Snow Leopard;820764]To quote (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/354272/324009.pdf) Greg:
"The good news is that Air New Zealand could be more profitable in the future than before, allowing us to start reinvesting in our customer experience, to share the rewards with Air New Zealanders via consistent profit share bonuses and to distribute dividends to our shareholders"


Could this be the same Greg?

Last week being grilled about the refund disaster, Greg was placating angry AIR customers whose money they couldn't refund without the airline going under, grimly describing (his words not mine) the desperate situation AIR was facing with 2/3rds (International) of it's business completely gone for the foreseeable future, massive ongoing costs, needing every bit of the govt $900M loan, facing a battle to survive etc. i.e. we need your money more than you do.

This week, Greg's placating the market with the news 'that AIR could be more profitable in the future than before allowing us to start reinvesting in our customer experience, to share the rewards .....etc'

Think someone must have got to him over the weekend & said in his role as CEO might need to at least project a bit of confidence for the remaining shell shocked troops! :)

[Mr Slothbear]

When he talks about flying 13 million in 2022 the majority will be in their domestic majority monopoly where they can extract supernormal profits.

I believe oil will stay cheap for a long time to come, not only has demand been reduced for significant time but future demand is also decreasing significantly. Older, less efficient aircraft will be the ones getting early retirements and cars are all going electric so these will be big changes going forward.


the value of any investment is the sum of all future cashflows discounted at an appropriate rate and recently we have seen a significant material change in the discount rate with possible further reduction in the near future ultimately boosting the value of airnz and all other investments so long as they stick around long enough to generate cash and there in lies the question. This I think has confounded many as evidenced by the posts in this thread and as surprising as compound growth can be it is just the same exponential change to an investments value when you change (in this case decreasing the OCR) the discount rate, its not linear.

Will add i’m not a holder and don’t intend to be anytime soon

[bull....]

airlines index up strong again in the US and boeing is surging , so many planes to be built obviously

[winner69]

With everybody keen to fly places and AIR ‘eye watering sad’ at cutting staff in a few months they’ll be doing a Jetstar and cancelling flights ‘due to staff shortages and operational requirements’

[winner69]

Poor sod on Twitter ...should have read the market better

HELP! I borrowed money and then shorted AIR New Zealand (AIR.NZ) and now my money is all gone. What do I do?

[Sideshow Bob]

Poor sod on Twitter ...should have read the market better

HELP! I borrowed money and then shorted AIR New Zealand (AIR.NZ) and now my money is all gone. What do I do?

Whats the saying...…"the market can stay irrational longer than you can stay financial"....or words to that effect.

[BlackPeter]

You must spread some Reputation around before giving it to Stranger_Danger again.

Did it for you ... :):

[Waiuta]

I am a holder and I'm down around 20% but I haven't incurred any loss as I haven't sold. I can afford to hang on till things improve.

Most of the opinions or conclusions formed are on the basis of incomplete information and that is pure conjecture.

Mr Market will decide regardless.

[Waltzing]

carter Worth - CNBC charts show boeing money is moving into momentum trades. If AIR moves with the US air lines then it can move back over 2 dollars but probably wont go back over 2.25-2.50. NZX has often just followed the SP 500.

[Stranger_Danger]

Check out Hertz, Whiting Petroleum and Chesapeake overnight - one is already in bankruptcy, for the other two it is almost guaranteed. Check out the US airlines.

I can understand why Air NZ looks cheap compared to this - it is!

We are approaching Full Tulip in certain parts of the market, of that I have no doubt.

[bull....]

carter Worth - CNBC charts show boeing money is moving into momentum trades. If AIR moves with the US air lines then it can move back over 2 dollars but probably wont go back over 2.25-2.50. NZX has often just followed the SP 500.

2.50 be good , need more announcements of job cutting. that moves the price nicely as well as the lead from the US. If we follow the nzx index to new highs maybe air will be $4 by then on announcement of transtasman bubble

[BlackPeter]

2.50 be good , need more announcements of job cutting. that moves the price nicely as well as the lead from the US. If we follow the nzx index to new highs maybe air will be $4 by then on announcement of transtasman bubble

Better don't mention bubbles in this context. Bubbles tend to burst :p;

[sb9]

2.50 be good , need more announcements of job cutting. that moves the price nicely as well as the lead from the US. If we follow the nzx index to new highs maybe air will be $4 by then on announcement of transtasman bubble

Gotta be one of most outrageously up ramping posts ever on this forum...

[Zaphod]

Poor sod on Twitter ...should have read the market better

HELP! I borrowed money and then shorted AIR New Zealand (AIR.NZ) and now my money is all gone. What do I do?

Answer: Launch a Gofundme campaign

Heck, we don't even need insurance now, just launch a campaign and take advantage of our naïve fellow citizens.

[bull....]

840 buyers at 1.85 wow so many

[Quantitative Easing]

Air NZ is a good swing trade but the positive sentiment will not last for long. I only entered because there was so much support around the $1.20 mark and the positive sentiment was building up at that time. "Feel good" and "We did this" are driving this stock higher at the moment. But reality will bite and there will be a retrace at some point.

[Waltzing]

Well i hope so and well done for at 1.20? Retracement to where from where? 2.10-2.20 to 1.80? Surely a bit of a sell off at 2.50, how ever i see safer trades in many other stocks.

[Beagle]

Interesting comparison chart on CNBC this morning. Brought up a bunch of the airline shares and the cruise line companies, (remember cruise lines are not even sailing yet at all). Basically they're moving in incredibly close sync and many have doubled from their lows. (AIR has more than doubled from 80 cents).

Essentially what is going on here is hot money being thrown at "the recovery story". It doesn't seem to matter what the recovery story is, all that matters is that the shares were beaten up and are now recovering. All of the experts on CNBC's fast money show thought it was madness. (Glad I am not the only one, I feel just a little bit more sane now lol)

On Friday Greg Foran admitted they will need all of the Govt's $900m loan, recall its in two tranches, one of $600m and another of $300m. This suggests to me that in FY21 when they will have to endure a very slow recovery and 12 months of the effects of Covid 19 and losses could very well exceed those estimated by brokers for FY20 of around $700m incl extraordinary items (4 months effects of the virus).

If they have to write down the value of their 777-300 fleet losses incl extraordinary items could go over a billion in FY21. Still...what would I know having followed this companies fortunes and despairs for over 35 years...

[Quantitative Easing]

Well i hope so and well done for at 1.20? Retracement to where from where? 2.10-2.20 to 1.80? Surely a bit of a sell off at 2.50, how ever i see safer trades in many other stocks.

More like 1.25 to be exact. I dunno when the retracement will be tbh. I would be lying if i told you i did. The upswing still hasn't been broken. My view is that

1) It will plateau around the $1.90-$2.10 mark

2) It might shoot up to $2.50 and then retrace back to $1.90-$2.10.

[blackcap]

Interesting comparison chart on CNBC this morning. Brought up a bunch of the airline shares and the cruise line companies, (remember cruise lines are not even sailing yet at all). Basically they're moving in incredibly close sync and many have doubled from their lows. (AIR has more than doubled from 80 cents).

Essentially what is going on here is hot money being thrown at "the recovery story". It doesn't seem to matter what the recovery story is, all that matters is that the shares were beaten up and are now recovering. All of the experts on CNBC's fast money show thought it was madness. (Glad I am not the only one, I feel just a little bit more sane now lol)

On Friday Greg Foran admitted they will need all of the Govt's $900m loan, recall its in two tranches, one of $600m and another of $300m. This suggests to me that in FY21 when they will have to endure a very slow recovery and 12 months of the effects of Covid 19 and losses could very well exceed those estimated by brokers for FY20 of around $700m incl extraordinary items (4 months effects of the virus).

If they have to write down the value of their 777-300 fleet losses incl extraordinary items could go over a billion in FY21. Still...what would I know having followed this companies fortunes and despairs for over 35 years...

Add almost a $80m interest bill on that loan and things getting tough. That said with the SP where it is, the capital raise might be at $1.50!

[Beagle]

Add almost a $80m interest bill on that loan and things getting tough. That said with the SP where it is, the capital raise might be at $1.50!

Or the Govt could have written into that loan agreement the right to convert that loan to shares at a fixed price of 50 cents, (recall the loan agreement was entered into when the share price was 80 cents). Looking at the rest of the terms of the loan that wouldn't be a big surprise.

[Sideshow Bob]

Or the Govt could have written into that loan agreement the right to convert that loan to shares at a fixed price of 50 cents, (recall the loan agreement was entered into when the share price was 80 cents). Looking at the rest of the terms of the loan that wouldn't be a big surprise.

Surely got to be low odds of conversion of the loan to shares - not going to be able to pay it back fast and the interest would be a burden in the current situation. Only unknown would be the price, whether its fixed, and at what level, or another sort of mechanism. Even at 80c, would double the number of shares on issue, and raise the govt back to circa 75%.

Wouldn't like to be a minority holder in that instance......

[winner69]

@stevebiddle
Seems pretty clear now that Air NZ picking a CEO with zero airline experience was a very bad idea.


That Steve is great supporter and defender of AIR ...and he’s saying that!

[Waltzing]

what the terms of the loan?

[Sideshow Bob]

what the terms of the loan?

Best covered by the announcement back in late March

https://www.nzx.com/announcements/350298

[Jaa]

Seems airlines have no problems raising capital or debt at the moment. First Singapore Airlines and now looks like Cathay Pacific. Both in much worse situations than Air NZ.

Cathay, Swire Pacific, Air China Suspend Trading in Hong Kong (https://www.bloomberg.com/news/articles/2020-06-09/cathay-swire-pacific-air-china-suspend-trading-in-h-k)

[keerti]

How do we short AIR?I have tried CFC and shorting is not allowed.

[Gerald]

How do we short AIR?I have tried CFC and shorting is not allowed.

https://virtualtrading.nzx.com/

This way you can reset your account each time it goes up so you don't bleed out too much.

[Beagle]

From Jetstar Website. No such thing offered by AIR on their flights...Hmmm


From June:

Masks provided to all passengers on each flight, while these are not mandatory from a safety point of view, they are recommended to be worn in the interests of everyone’s peace-of-mind. You can bring your own mask if you would prefer
Sanitising wipes available to you to wipe down seat belts, trays and armrests yourself, if you’d like

[uravgtrader]

840 buyers at 1.85 wow so many

Where can one find these level of stats?

[winner69]

@elonbachman
Bankruptcies are the new IPOs.

[Waltzing]

The bail out rate of interest was 7 to 9%. Did MR B have an opinion on this? Government bonds borrowing by supported QE. Still waiting for my refund for europe this year... fat chance i will see that for a while even though my agent has put in for it.. they need to close that loop hole but the little consumer affairs minister does not seem to want to do anything about it? He does not seem to understand how we get money in the first place and who owns it. That civil air act must have been written by the air lines. Under a socialist government i forgot " your money is there money".

[Snow Leopard]

Did a fair amount of number crunching to try and derive a value for AIR and given the Interesting Times we live in ran a few scenarios, weighted them and came up with a present value for Beagle's favourite airline of [drumroll]

$0.92 a share.

Given my track record on valuing this stock (excellent as independently assessed by myself) then any holders will want to keep a very close eye on the short-term technical indicators of choice, and try not to get trampled in the rush for the emergency exits.

Enjoy your freedom
11678

[Blue Skies]

As if things weren't hard enough already, and now a price war!
Might see a bit of sanity returning to the SP today.

AIR facing some very tough completion on its 1/3rd remaining business, with Jetstar aggressively fighting to increase its 20% share with fares from $21 AKL/WLG or CHC, soaking up 15,000 bookings in first 24 hours of the sale.

https://www.stuff.co.nz/business/300031085/jetstar-sale-fares-first-volley-in-postcovid-flight-price-war

[bull....]

As if things weren't hard enough already, and now a price war!
Might see a bit of sanity returning to the SP today.

AIR facing some very tough completion on its 1/3rd remaining business, with Jetstar aggressively fighting to increase its 20% share with fares from $21 AKL/WLG or CHC, soaking up 15,000 bookings in first 24 hours of the sale.

https://www.stuff.co.nz/business/300031085/jetstar-sale-fares-first-volley-in-postcovid-flight-price-war

saying on black monday thread profit taking so im out , rsi is overbrought as well so looks likely to happen soon

[BeeBop]

I sold out yesterday....going to watch and see what happens with the Sharesies chatters....especially if the price does the unthinkable and declines again.

[workingdad]

Cam on tv this morning said they are refunding 22 million a day. Then he said the 100million is a figure but it could be much larger than that. He says this 100 million is the non refundable tickets. Added to this 300 million in refundable tickets. John called him out, said it “sounded like BS”

Hard to have any faith in what they are saying when it’s so purposefully veiled. Just stump up, put out a PS disclosure and let investors see what the amount actually is. As alluded to by those that know air well, it’s a considerably bigger figure than they are admitting.

[Raz]

I think with AIR, this Government loan/facility is screwing up their capital structure options and incentives for management, needs to be sorted.

[blackcap]

Cam on tv this morning said they are refunding 22 million a day. Then he said the 100million is a figure but it could be much larger than that. He says this 100 million is the non refundable tickets. Added to this 300 million in refundable tickets. John called him out, said it “sounded like BS”

Hard to have any faith in what they are saying when it’s so purposefully veiled. Just stump up, put out a PS disclosure and let investors see what the amount actually is. As alluded to by those that know air well, it’s a considerably bigger figure than they are admitting.

$22m a day equates to about $660m a month. Not much $ left very quickly at that rate. I think he is telling lies.

[Raz]

$22m a day equates to about $660m a month. Not much $ left very quickly at that rate. I think he is telling lies.

Yeah, none of it adds up. Wish media would get onto the flight not cancelled yet bookings are...just shows the BS going on.

[Cyclical]

$22m a day equates to about $660m a month. Not much $ left very quickly at that rate. I think he is telling lies.

Absolutely. I said a few pages back that if it's only ~$100 million, then why wouldn't they just pay it back? The impact to their reputation is a lot more costly than that. Clearly there is a lot more to it than a measly 100mil.

[Cyclical]

I think with AIR, this Government loan/facility is screwing up their capital structure options and incentives for management, needs to be sorted.

Yeah, why is that government loan so expensive? If it's deliberately calibrated to send AIR to the wall, then why doesn't the gov just put us out of our misery and hasten the demise by forcing them to issue refunds?

[Waltzing]

sorry i made an error , my tickets are refundable and will be refunded. The Snow Cat said he crunched the numbers... well done... .92 cents? Sounds good. How does an air line move 13 million passengers with an organisation 70% smaller. Now i assume they going to automate everything? Cant automate the pilots, air crew, engineering, ground staff, some admin... They must have a lot of people they dont need then? They are going to fore the whole of the marketing department? No more expensive adverts? The board trimmed to 2 people. Senior management down to 10? Some very very busy admin staff? Someone enlighten me im a stupid country person ... see my kathmandu photo advert.