AIR - Air NZ.

[CKWJ]

Extension of WLG runway into Cook Strait ludicrous plan but they seem he’ll bent on pissing off the locals in still pursuing it.

It's a combination of local politicians wanting a legacy project, and their erroneous assumption that carriers were lining up to fly long haul to Wellington pre-covid. Infratil didn't even want to even stump up their full share of the project cost compared to their equity in the airport company, which tells you how much return they expect to see from it.

Singapore Airlines had to be subsidised by Wellington ratepayers to fly the Singapore-Melbourne-Wellington route, to the tune of $800,000 per year. Air NZ has stated they have no interest in flying long haul out of Wellington with a runway extension, and that was all in pre-covid times. Seems like a huge expenditure for questionable and uncertain gains.

[Raz]

Today at the hearing into the Wellington airport expansion, the Wellington airport gave evidence that they and airnz expect things to be back to normal flight levels, with a covid19 vaccine, by 2021.

Let's see if this optimistic prediction ages well.

An effective vaccine distributed throughout the world and to a level that is effective herd immunity by 2021 let alone during 2021. Not going to happen on that time line. Don't have the verified trial completed of a vaccine yet....

[Beagle]

Foran's 800 day plan is for travel to be back to 70% by August 2022. I think he's very optimistic.

[Cadalac123]

An effective vaccine distributed throughout the world and to a level that is effective herd immunity by 2021 let alone during 2021. Not going to happen on that time line. Don't have the verified trial completed of a vaccine yet....

This is a big point a large number of people don't understand.. pointless to preach this since most in the investing community don't have a scientific background so don't actually understand how these things work.

Especially cringe when I hear CNBC news telling me the market went up on VACCINE HOPE!@!@

[Beagle]

Still pissed off with Air NZ. So flying Jetstar tomorrow. Cheaper.

Safer, (free mask and wipes upon request) and cheaper. As for the AIR share price all I can say is that its pretty obvious the second round of stimulus cheques have started to flow ;)

[Raz]

Safer, (free mask and wipes upon request) and cheaper. As for the AIR share price all I can say is that its pretty obvious the second round of stimulus cheques have started to flow ;)

The last week of July is the cut off for the US stimulus cheques so lets see if that has any effect on the market in time. A lot of people are risk adverse now on flying, no one in my family wants to re-engage with the world let alone flying anywhere ...

[Waltzing]

The amount of time its taken AIR to short out the basics of PPE and Crews surely indicates why as investors we have always traded NZ stocks since it almost impossible to determine there performance until its to late. FBU ect.

It also shows that NZ AIR and the government have found the logistics of implementing new behavioural systems , IT , train civilian staff at all part of the chains to be a SLOW process taking months. It will take much much longer to get a system in place for a safe opening up of parts of the border. Hence why many of the old hands here are waiting for a much lower share price or maybe have removed air lines off the investing radar for good.

[iceman]

AIR getting 4 new Dreamliner engines delivered. Hopefully they will work as expected https://www.stuff.co.nz/business/industries/122033161/from-russia-with-love-sovietera-jet-takes-off-from-auckland-airport

[Beagle]

Great, they finally get these engines when they no longer need them. That's Rolls Royce "service" for you.
Speaking of so called RR service standards....why do I get the feeling that AIR are simply playing Russian Roulette with passenger safety ? https://www.stuff.co.nz/business/122015183/air-nz-now-rostering-separate-crews-for-a320-international-and-domestic-flights

[Waltzing]

yes i have posted a couple of those. Amazing ..... leads to assume more companies and organisations in NZ are run like that....she 'll be right ...

[Snow Leopard]

Due to fly London - Doha - Kuala Lumpur in a few weeks with Qatar Airways.

I will have to wear a mask, face shield & gloves and their crew uniform looks like a hazmat suit.

Gone are the good old days of flying.

[Brain]

Due to fly London - Doha - Kuala Lumpur in a few weeks with Qatar Airways.

I will have to wear a mask, face shield & gloves and their crew uniform looks like a hazmat suit.

Gone are the good old days of flying.

Don’t forget your flying goggles and scarf

[winner69]

At least our Cam still has a job

Shareholders glad not paying these people surplus to requirements now ....employees (no matter how great they are) are just another commodity like fuel eh

@CamWallace_NZ
A tough week @FlyAirNZ as we farewell so many more great people from across our business. I wanted to mention and thank the fantastic FSM's who are departing. In normal times I travelled long haul every second week and these special people really made a huge difference. Thank you

[BlackPeter]

Due to fly London - Doha - Kuala Lumpur in a few weeks with Qatar Airways.

I will have to wear a mask, face shield & gloves and their crew uniform looks like a hazmat suit.

Gone are the good old days of flying.

Gone might be as well the days when it was more likely than not to catch every second long haul flight a bad cold or a flu from some fellow passenger coughing and spitting somewhere in your vicinity. At least for me this was sort of the long term average.

Sick people not anymore allowed to board the plane ... and all this PPE can be only useful to protect from colds and flues.

These new days might well have their silver lining ...

Have an enjoyable and save flight ...

[Beagle]

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12345607 More truly shocking publicity for AIR

[Beagle]

Tourism changed forever. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12345416

Reported on Network news last evening Taupo is booming and that's before the school holidays even really kicked off properly. Business up 20% on last year.
Chatted with a guy today who said last weekend, (a week before the school holidays even started) he and his wife were turned away from a couple of the best Restaurants in Taupo because he hadn't booked in advance and they were at maximum capacity.

Taupo has always struck me as a great place. I would think the boom times there will continue as people disaffected by flying overseas and who are not very keen on getting on a plane at all, simply drive there for a good time.

[Raz]

Tourism changed forever. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12345416

Reported on Network news last evening Taupo is booming and that's before the school holidays even really kicked off properly. Business up 20% on last year.
Chatted with a guy today who said last weekend, (a week before the school holidays even started) he and his wife were turned away from a couple of the best Restaurants in Taupo because he hadn't booked in advance and they were at maximum capacity.

Taupo has always struck me as a great place. I would think the boom times there will continue as people disaffected by flying overseas and who are not very keen on getting on a plane at all, simply drive there for a good time.

Sure, there are winners and losers...driving distance to a major population area will do well at the weekends and holiday times, same in the South island, its the day in day out that has dropped and the average spend...it great for a local if you can travel at other times, just don't think the industry as a whole can survive on that...

[BlackPeter]

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12345607 More truly shocking publicity for AIR

Mind boggling. How is it be possible an airline realizes only after boarding that the plane is overloaded? If incompetence has a name it clearly must be Air New Zealand.

Obviously - the story how they treated their victims (you can't really call these people passengers, can you?) afterwards is hard to fathom. Getting a customer due to AIR's incompetence into quarantine prison and then asking them to pay for it? They should instead compensate the customers for the time they lost due to AIR's fault.

I shall put AIR on my "avoid at all cost" list next to Aeroflot and Air Malaysia.

[Beagle]

Mind boggling. How is it be possible an airline realizes only after boarding that the plane is overloaded? If incompetence has a name it clearly must be Air New Zealand.

Obviously - the story how they treated their victims (you can't really call these people passengers, can you?) afterwards is hard to fathom. Getting a customer due to AIR's incompetence into quarantine prison and then asking them to pay for it? They should instead compensate the customers for the time they lost due to AIR's fault.

I shall put AIR on my "avoid at all cost" list next to Aeroflot and Air Malaysia.

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12345683 The mind truly boggles. AIR are flying only a tiny fraction of their previous services so they should have all the resources they need to look after the very few people they are flying really well, especially elderly vulnerable passengers. Its very hard to come to any other conclusion than there is a gross level of incompetence and lack of care by front line staff. Foran can issue all the weasel words and platitudes he likes but publicity like this really hurts and like you, many will go out of their way to avoid AIR in the future if at all possible.

[Rep]

Mind boggling. How is it be possible an airline realizes only after boarding that the plane is overloaded? If incompetence has a name it clearly must be Air New Zealand.

Obviously - the story how they treated their victims (you can't really call these people passengers, can you?) afterwards is hard to fathom. Getting a customer due to AIR's incompetence into quarantine prison and then asking them to pay for it? They should instead compensate the customers for the time they lost due to AIR's fault.

I shall put AIR on my "avoid at all cost" list next to Aeroflot and Air Malaysia.

"They offered to get off the full flight after the captain advised passengers it was overweight and off-balance, but other passengers were randomly picked off a list, she said."

An Air New Zealand spokeswoman said when removing passengers from a flight the airline had a standard process which took into account a number of factors, including ticket type and loyalty level...

Solomon said other passengers told they had to leave included an elderly woman, another mother and daughter, a mother with a young child and a group of four male teenagers.

The passengers were given the impression that passengers were requested via a random process - the reality is that they weren't at all, the passengers were profiled based on the fare and their airline status.

Therefore no one up the front of the plane was going to be asked to come off the aircraft regardless of any balance issue, no-one with a Gold and probably Silver status or anyone travelling with them (not just Air NZ but also under their obligations with Star Alliance, so those US passengers would probably have been kept aboard even if they had never flown with Air NZ if they had a Star Alliance status).

Pity those in the cheap seats - the offloaded passengers almost likely fitted the profile - the poor buggers, they were the acceptable collateral damage for Air NZ because they figured they were the least important.

[macduffy]

Is it easier to off-load a few lower-fare passengers than to explain to a regular freight customer why you had to offload their valuable cargo?

[Rep]

Is it easier to off-load a few lower-fare passengers than to explain to a regular freight customer why you had to offload their valuable cargo?

Sure it is macduffy. It's apparently much easier to take an elderly passenger, who doesn't fly often, off the aircraft, then give her a traumatic experience and deny her food and water for eight or nine hours - whilst erroneously telling them as a result of being offloaded that they would have to pay for their accommodation, meals and other costs for 14 days in quarantine and relying on the compassion of the police to comfort her whilst in distress. I mean stuff does go wrong but a small serving of compassion from the staff of our national carrier might have made it slightly less distressing.

As Alan Martin of LV Martin once pledged "If it's not right, we'll put it right and it's the putting right that counts."

"When we first got off the plane they told us we could ring our family to come and pick us up. The elderly lady was very distressed and crying," Solomon said...

In an email to the Herald the daughter of the elderly traveller said the nine-hour ordeal was traumatic for her mum who was not a keen flyer at the best of times.

"It was after 9pm before she finally got to the hotel and 9.30 before she was given dinner. She was not even offered so much as a cup of tea or coffee. She is normally a very anxious person and is frightened of flying so the whole experience was quite traumatic...not helped by her being 78."

"She was quite frightened by the yelling and screaming of some of the people who were offloaded with her. Apparently an older male policeman sat and chatted to her and that was comforting."

Added her mum, "We were not given anything to eat or drink until just before we left the airport and that was a very small plastic container of water and either a tiny pack of chips or a bliss ball and we didn't get dinner until 9.30 and all meals were cold. It was a long time from check in at 12.30 until we got a cold meal at 9.30."

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12345683

[macduffy]

Exactly, Rep. Unfortunately, there isn't an emoji for expressing a blend of sarcasm and disgust to accompany my post #17775.

:(

[Rep]

No foul macduffy, it obligated me to provide context as to the sheer nastiness of the whole affair.

My mother doesn't fly often either and all I'm asking is whether we would the same thing to happen to our parents, grandparents, partner or child and be given the same level of disdain.

[kyanar]

Is it easier to off-load a few lower-fare passengers than to explain to a regular freight customer why you had to offload their valuable cargo?
Offloading cargo would likely draw the ire of the government, as with so few planes flying cargo space is more of a premium than passenger space. The government is also part paying for some cargo to be shipped just to keep exporters in business.

[winner69]

Makes a good story but surely just a coincidence ....10 of the 11 off loaded were Maori

https://nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12345864

[dobby41]

Off load 3 kids, who were booked as adults as they aren't taking unacompanied minors, is unfortunate.
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12345864

[winner69]

Off load 3 kids, who were booked as adults as they aren't taking unacompanied minors, is unfortunate.
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12345864

I wondered how they got through check in if AIR not accepting unaccompanied kids ...would have been dad’s problem to fix then

[traineeinvestor]

I wondered how they got through check in if AIR not accepting unaccompanied kids ...would have been dad’s problem to fix then

Children can fly alone from age 12: https://www.airnewzealand.co.nz/special-assistance-children-travelling-alone-airband

[winner69]

Children can fly alone from age 12: https://www.airnewzealand.co.nz/special-assistance-children-travelling-alone-airband

That seems to say not for international at the moment.

[dobby41]

Children can fly alone from age 12: https://www.airnewzealand.co.nz/special-assistance-children-travelling-alone-airband

Within NZ - this was International.
How would that work anyway - they get to Aus and the kids go into isolation and look after themselves?

[stoploss]

Within NZ - this was International.
How would that work anyway - they get to Aus and the kids go into isolation and look after themselves?
As happens in NZ , you can join someone in quarantine , so presumably a parent would join them .

[Blue Skies]

Since last Saturday 4 July Sydney Airport placing severe restrictions on numbers of passengers arriving per flight to a max of 50 per flight.
Megan Woods now talking about a freeze on bookings on AIR & bound to follow similar restrictions.
Each flight with 50 pax on an A320 designed to carry 171 or an A321 designed to carry 214 would be a significant loss to the airline.



https://7news.com.au/news/travel/sydney-airport-limits-inbound-passengers-to-50-per-flight-c-1144617

[dobby41]

As happens in NZ , you can join someone in quarantine , so presumably a parent would join them .

Thanks - makes sense mostly. (I wonder if the joiner has to pay for themselves (food etc)?)

[kyanar]

Thanks - makes sense mostly. (I wonder if the joiner has to pay for themselves (food etc)?)
I'm not aware of any Australian states that permit someone from outside to enter mandatory quarantine, so it would never come up. You cannot be joined by someone else.

[dobby41]

I'm not aware of any Australian states that permit someone from outside to enter mandatory quarantine, so it would never come up. You cannot be joined by someone else.
So stoploss is wrong?

As happens in NZ , you can join someone in quarantine , so presumably a parent would join them .

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12346192

Freshly recapitalised Qantas turns up the competitive heat with their subsidiary JetStar. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12346192
Remember JetStar provides free face masks and anti bacterial wipes upon request.

Meanwhile the Govt is going to manage the numbers coming into the country. https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12346018

[stoploss]

I'm not aware of any Australian states that permit someone from outside to enter mandatory quarantine, so it would never come up. You cannot be joined by someone else.

Yep sorry , it appears that a child under 18 doesn't have to quarantine , they can be picked up by parent or guardian and then have to self isolate for 14 days at home.

[Jaa]

It is becoming common overseas to quarantine overseas arrivals in hotels only until they receive a negative COVID test result, usually at day 2 or 3. If negative then people continue the 14 days at home in self-quarantine. Hong Kong is the most advanced at this using a mobile app to track movement and wristband, Malaysia too has something similarly successful.

Seems to be little appetite for this in NZ yet but its a much more sustainable approach. Maybe in a few months when things have settled down. Even if it was just for people who have spent the last 30 days in Australia would make a big difference in the number of rooms required. Also be interesting to see what % of people test positive at day 12 compared to day 3.

Until then Air NZ pays the price. Seems insane for Air NZ to be forced to do this but not the middle eastern airlines, Singapore etc that are rapidly scaling up their capacity worldwide. Will the government compensate Air NZ?

Guess with Melbourne Airport not operational and Sydney restricted to 50 people the numbers would have gone down anyway.

Cam talked about this on RNZ today (https://www.rnz.co.nz/news/national/420658/air-nz-putting-a-temporary-hold-on-new-international-bookings-to-nz).

[Beagle]

Govt are talking to other airlines as well but ~ 80% of returning Kiwi's are coming on AIR, (according to various stuff I have read today on this).

[dobby41]

It is becoming common overseas to quarantine overseas arrivals in hotels only until they receive a negative COVID test result, usually at day 2 or 3. If negative then people continue the 14 days at home in self-quarantine. Hong Kong is the most advanced at this using a mobile app to track movement and wristband, Malaysia too has something similarly successful.

Seems to be little appetite for this in NZ yet but its a much more sustainable approach. Maybe in a few months when things have settled down. Even if it was just for people who have spent the last 30 days in Australia would make a big difference in the number of rooms required. Also be interesting to see what % of people test positive at day 12 compared to day 3.


Isolation at home - seemed to be issues with this at the start with people not really isolating.
Then we had a recent case where they tested negative on day 3 but positive on day 5.
It may make a fair middle ground but the 1st case we get of someone testing positive at home will drive the media (and some on these threads) foamy at the mouth.
I'm not sure NZers understand what a low or medium risk option would look like - they'd assume no risk until something happened.

People want the borders open now but they also want zero risk - can't be done.
I think the media drives some of this in their desire to get copy and clicks.

[Jaa]

Isolation at home - seemed to be issues with this at the start with people not really isolating.
Then we had a recent case where they tested negative on day 3 but positive on day 5.
It may make a fair middle ground but the 1st case we get of someone testing positive at home will drive the media (and some on these threads) foamy at the mouth.
I'm not sure NZers understand what a low or medium risk option would look like - they'd assume no risk until something happened.

People want the borders open now but they also want zero risk - can't be done.
I think the media drives some of this in their desire to get copy and clicks.

Yes the media partly but mostly I blame Todd Muller and his National Party who have been very cynical in a desperate attempt to turn around their fortunes. Open the border, shut the border, bring people to Queenstown, no not those people, managed isolation is a shambles but bring everyone home anyway! Nothing constructive.

Longer term I like the idea of people who have been in a green zone of countries that have no community transmission being allowed to quarantine at home after a negative day 3 test. No chance of that happening before the election with National's hysterics.

Shocking but almost inevitable with Muller's poor leadership that ex-National president and key party figure Michelle Boag and National MP Hamish Walker thought it was ok to leak private, confidential health data. They are simply not fit to govern.

[Stranger_Danger]

The Qantas raise at $3.65 is looking smart with the news from Melbourne today and the shares closing at $3.66.

Air NZ better get a move on or the placement price has a good chance of getting lower the longer they sit on their hands...

[Raz]

Govt are talking to other airlines as well but ~ 80% of returning Kiwi's are coming on AIR, (according to various stuff I have read today on this).

More constraints and political risk/uncertainty..not getting any easier running a business flying.

[Beagle]

More constraints and political risk/uncertainty..not getting any easier running a business flying.

Emirates freezes new bookings for 3 weeks too. Yes mate, these new changes will certainly make an impact going forward...speaking of impact :eek2: https://www.nzherald.co.nz/travel/news/article.cfm?c_id=7&objectid=12346353

[BlackPeter]

Emirates freezes new bookings for 3 weeks too. Yes mate, these new changes will certainly make an impact going forward...speaking of impact :eek2: https://www.nzherald.co.nz/travel/news/article.cfm?c_id=7&objectid=12346353

Looks like they didn't do a proper "chicken test" (https://www.prmarketingbollox.com/blog/improving-marketing-productivity-take-the-chicken-test) before releasing this plane :):

[Beagle]

https://www.msn.com/en-nz/news/national/sorry-but-new-zealand-is-all-full-up/ar-BB16rgGz?ocid=spartan-dhp-feeds

N.Z. Inc puts up the no vacancy sign

[Beagle]

Due to fly London - Doha - Kuala Lumpur in a few weeks with Qatar Airways.

I will have to wear a mask, face shield & gloves and their crew uniform looks like a hazmat suit.

Gone are the good old days of flying.

I reckon you're going to rock that new face shield snowie https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12345343
At least some airlines are taking passengers safety seriously, unlike AIR who take a she'll be right what could possibility go wrong approach :eek2:

[bottomfeeder]

Post removed by subscriber.

[Jaa]

Been quite a bit of pressure to resume flights to COVID free realm countries and it now looks like it will happen. Small ray of sunshine for Air NZ. Anyone fancy a some sun?

Pacific bubble: Flights between Cook Islands and NZ to be confirmed next week (https://www.rnz.co.nz/news/national/421170/pacific-bubble-flights-between-cook-islands-and-nz-to-be-confirmed-next-week)

Edit: Looks more like wishful thinking from the Cook Islands side at his stage.
Flights to Rarotonga: PM Jacinda Ardern shuts down talk of Pacific bubble next week (https://www.stuff.co.nz/travel/news/122122342/flights-to-rarotonga-pm-jacinda-ardern-shuts-down-talk-of-pacific-bubble-next-week)

[stoploss]

I see Qantas has cancelled all international flights bar NZ until Mar 2021.
So if we do open up the bubble , might be stiff competition .However it looks increasing likely
going to be a long time till AIR NZ , can get back to any real capacity .

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12348043
Yeap parking up their A380's for "at least three years" as they will have no use for them.
Heck that's at least 1095 days...which makes Foran's 800 day plan look more than a little optimistic.
Looking increasingly like all AIR's 777's are worth not much more than scrap metal.

[Not The Chosen One]

Move over Air NZ, JetRaro is on its way... Sorry northerners, South Island only. Some decent flight times listed on their website. When the likes of Jetstar and Virgin flew, the flight times were horrendous

https://www.stuff.co.nz/travel/300057053/kiwi-businessman-ready-to-go-with-direct-flights-from-christchurch-to-rarotonga

http://jetraro.co.nz/

[iceman]

Move over Air NZ, JetRaro is on its way... Sorry northerners, South Island only. Some decent flight times listed on their website. When the likes of Jetstar and Virgin flew, the flight times were horrendous

https://www.stuff.co.nz/travel/300057053/kiwi-businessman-ready-to-go-with-direct-flights-from-christchurch-to-rarotonga

http://jetraro.co.nz/

I seem to have a vague memory of Mike Pero getting involved in one of the earlier failed airlines, maybe Kiwi Air or whatever it was called based out of Hamilton ?

[kiora]

I seem to have a vague memory of Mike Pero getting involved in one of the earlier failed airlines, maybe Kiwi Air or whatever it was called based out of Hamilton ?

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10333314

[dobby41]

I seem to have a vague memory of Mike Pero getting involved in one of the earlier failed airlines, maybe Kiwi Air or whatever it was called based out of Hamilton ?

Kiwi Air was Ewan Wilson

[Beagle]

Just as well Mike Pero has a big fortune because as the old adage suggests...How do you make a small fortune in aviation ? Start with a big one :)

[Zaphod]

Just as well Mike Pero has a big fortune because as the old adage suggests...How do you make a small fortune in aviation ? Start with a big one :)

I had to double check today's date wasn't April 1st! Hopefully this endeavour is a success, however there are some significant factors pushing against it, not the least being a pandemic which will probably still be active for some time to come.

[Teatree]

Got an email from air nz today refund coming for cancelled akl syd flights from 31 may. Tax is being refunded to credit card and flight portion to air points whence it came. Still waiting for webjet from an earlier one. Looks like Aust will be out of reach for a while

[Waltzing]

those park ups might be short than expected.. the moderna trails are expanding on stage one success. US Air Line stocks moving up already in pre market.

[Cyclical]

I seem to have a vague memory of Mike Pero getting involved in one of the earlier failed airlines, maybe Kiwi Air or whatever it was called based out of Hamilton ?


Kiwi Air was Ewan Wilson

The end result will likely be the same...AIR will ultimately hand out an anti competitive 'itch slapping to ensure they don't stick around too long and the NZ public don't get over burdened with more choice than they're rightly entitled. Remember Freedom Air? Was around just long enough to serve a purpose...

[Zaphod]

The end result will likely be the same...AIR will ultimately hand out an anti competitive 'itch slapping to ensure they don't stick around too long and the NZ public don't get over burdened with more choice than they're rightly entitled. Remember Freedom Air? Was around just long enough to serve a purpose...

We seem to accept the same behaviour from big box retailers like Mitre 10 or Bunnings, but not from Air NZ?

[Cyclical]

We seem to accept the same behaviour from big box retailers like Mitre 10 or Bunnings, but not from Air NZ?

Free market realities isn't it. Accept it or otherwise, I'm just pointing out the likely fate of Pero Air.

[percy]

This week's www.chrislee.co.nz taking stock's Air NZ article makes for interesting reading.

[Beagle]

This week's www.chrislee.co.nz taking stock's Air NZ article makes for interesting reading.

I think he might have been listening to some dog barking :)...must admit, its good he didn't hold back. Been plenty of other media articles along similar lines but Chris Lee really does get stuck in and good on him.. Literally nobody could say they weren't cautioned about this one.

[BlackPeter]

those park ups might be short than expected.. the moderna trails are expanding on stage one success. US Air Line stocks moving up already in pre market.

Second US Covid wave currently exponentially rising. However - if you think this one will be bad (already much worse than the first one), than you haven't seen the third wave they will get in autumn / early winter :scared:.

Expect their airline stocks to follow the car rentals (Hertz), but sure - ride the hype wave while the surf is good.

[Baa_Baa]

This is a bit disturbing, Siri is just unbelievable for doing stuff, like hands free messaging, calling, making meetings, setting reminders … heaps of stuff, but now I’m getting notifications from Siri, and guess what for … the single worst investment right now on the NZX, soon to ruin all shareholders and become essentially government owned. I’m not even sure what to do about it, other than ignore it, I feel some responsibility to point out to Siri (Apple) the stupidity of this. Some people might misconstrue it as advice to buy?

[Waltzing]

"Second US Covid wave currently exponentially rising.' i think DR F says they are still in the 1st wave in the US...

[Xerof]

This is a bit disturbing, Siri is just unbelievable for doing stuff, like hands free messaging, calling, making meetings, setting reminders … heaps of stuff, but now I’m getting notifications from Siri, and guess what for … the single worst investment right now on the NZX, soon to ruin all shareholders and become essentially government owned. I’m not even sure what to do about it, other than ignore it, I feel some responsibility to point out to Siri (Apple) the stupidity of this. Some people might misconstrue it as advice to buy?

Siri is reputed to be a rampant shorter :p

[winner69]

Siri is reputed to be a rampant shorter :p

Wonder which broker Siri uses?

[Leftfield]

Wonder which broker Siri uses?

Bound to be Sharsies.

[BlackPeter]

"Second US Covid wave currently exponentially rising.' i think DR F says they are still in the 1st wave in the US...

It depends on what numbers you are looking at.

If you look at the number of active cases - they actually had a first peak around mid May, went down slightly in June and are now on an exponential upswing (second wave?).

11791

But no matter whether you see this as the continuation of the first wave or the second - it is clearly trumpesk! They do know how to party these Americans, don't they? Every day another thousand dead Americans or so. How many died during 9/11?

Back to the subject of this thread ... transpacific travel with US will be a looong time away. The Americans first need to remove the cancer in the white house, then the virus ... and then perhaps we can at some stage talk about travel again. Late 2021 / early 2022?

[Stranger_Danger]

Back to the subject of this thread ... transpacific travel with US will be a looong time away. The Americans first need to remove the cancer in the white house, then the virus ... and then perhaps we can at some stage talk about travel again. Late 2021 / early 2022?

Depends on how the war with China is going.

[Zaphod]

The online tool for refunds was released today. I excitedly log in to unfortunately find my international flights all have "contact us' next to them. Damn. Back to the drawing board.

[k14]

The online tool for refunds was released today. I excitedly log in to unfortunately find my international flights all have "contact us' next to them. Damn. Back to the drawing board.
Better than me, when I enter the details for my cancelled flights I get a "cannot find this booking reference".

[dobby41]

The online tool for refunds was released today. I excitedly log in to unfortunately find my international flights all have "contact us' next to them. Damn. Back to the drawing board.

Refunds? Credits use tool was released.
Worked for me but only for NZ$ tickets.
One of mine is A$ so doesn't show.

[Zaphod]

Refunds? Credits use tool was released.
Worked for me but only for NZ$ tickets.
One of mine is A$ so doesn't show.

Yes, credit tool sorry.
Mine were in NZ$ but the first few times I entered the booking code it stated it couldn't find the booking, then I got a "contact us" message. Will wait another few weeks and see how things go.

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12350178
Lawyer cops a $30K costs ruling and 1 year ban from AIR.

[blackcap]

I don't know the legalities but I just received full refunds for my flights to Europe. I was on AIR from Auckland to HK, and on the way back Shanghai to Auckland. But also the Cathay Pacific flight to Paris and the one back on Air France from paris were included in the refund.

Well done AIR for pulling that one off for me. (well actually Flight Centre, but I guess via AIR). Was a pleasant surprise to say the least.

[Grimy]

Yes, credit tool sorry.
Mine were in NZ$ but the first few times I entered the booking code it stated it couldn't find the booking, then I got a "contact us" message. Will wait another few weeks and see how things go.

Credit tool had our credit amount correctly showing. And I'm pleased that booking deadline has been moved out till the end of next year with another 12 months for taking the flight. hopefully things will be a lot better before December 2022. If not I guess a $1,000 flight credit sitting unused will be the least of our problems.......

[Beagle]

https://www.stuff.co.nz/business/industries/122194473/air-nzs-strong-domestic-recovery-could-entice-jetstar-to-expand-in-nz--analyst

QAN are vastly better capitalised than AIR and their subsidiary Jetstar have lots of spare planes and crew and I would suggest there is a lot of former AIR customers who have been seriously disaffected by their appallingly customer service in recent months. Both now have bad customer service, why pay more with AIR ?

[kyanar]

https://www.stuff.co.nz/business/industries/122194473/air-nzs-strong-domestic-recovery-could-entice-jetstar-to-expand-in-nz--analyst

QAN are vastly better capitalised than AIR and their subsidiary Jetstar have lots of spare planes and crew and I would suggest there is a lot of former AIR customers who have been seriously disaffected by their appallingly customer service in recent months. Both now have bad customer service, why pay more with AIR ?

Qantas has had just as much negative press over the way they've handled the COVID crisis, about the only thing protecting them is that Aussies are rabidly nationalistic at times.

[Marilyn Munroe]

https://www.stuff.co.nz/business/industries/122194473/air-nzs-strong-domestic-recovery-could-entice-jetstar-to-expand-in-nz--analyst

QAN are vastly better capitalised than AIR and their subsidiary Jetstar have lots of spare planes and crew and I would suggest there is a lot of former AIR customers who have been seriously disaffected by their appallingly customer service in recent months. Both now have bad customer service, why pay more with AIR ?

Propstar wont be back. Its aircraft were clapped out old turbo-prop bangers that Queer and Nasty Airlines operated across the ditch. They tried to sell them, couldn't, so sent them to Aoteroa to extract value from them before they were scrapped.

A recapitalised Virgin(Under Arm Bowlers Division) is more of a threat to Cullen Airlines in my opinion. The spreadsheet jockeys who brought in will be wondering what to do with all the 737-800's they inherited. You don't have to be a genius to work out the conclusion they will come to.

Boop boop de do
Marilyn

[Jaa]

Trust Beagle to focus on an unlikely negative outcome rather than the real, positive news front and center. Investing in NZ would lead to short and medium term negative cashflows that Qantas and Virgin can ill afford and carries the huge risk of a re-occurrence of COVID-19 locally as there just has been mysteriously in Vietnam after 99 days of no local transmission. Also almost impossible to transfer staff with the current restrictions on arrivals that both NZ and Aus have at the moment. I haven't come across David Mackenzie before but Peter Harbison who is very well respected pours cold water on the idea.

This idea that Air NZ is in a weaker financial position than Qantas is nuts. Air NZ is flying in one of the most active domestic markets in the world, are backed by the government and have access to a $900m loan facility when/if required?!? Their latest policies and online tool to use flight credits places them far in front of similar airlines. They are also clearly able to raise capital on the NZX, which now looks like it will happen after the election.

The big news is Air NZ's domestic capacity is increasing to 70% in August according to Cam and is on an improving path. That's a big deal and a clear competitive advantage to Air NZ. All those catchup bookings will be flowing to the bank, offset somewhat by use of flight credits.

[Beagle]

QAN has raised $3,000,000,000 capital already without even tapping the Australian Govt. I think I'll just that number be the reply to your post Jaa.

[Jaa]

QAN has raised $3,000,000,000 capital already without even tapping the Australian Govt. I think I'll just that number be the reply to your post Jaa.

Raising that much, that quickly is a sign of weakness as much as investor faith.

No question in my mind, Air NZ burnt less cash today than Qantas relative to the size of their businesses and will continue to do so for the foreseeable future.

[Beagle]

Raising that much, that quickly is a sign of weakness as much as investor faith.

No question in my mind, Air NZ burnt less cash today than Qantas relative to the size of their businesses and will continue to do so for the foreseeable future.

I couldn't disagree more. I have seen the very strong proactive approach QAN have taken towards cost control and the amount of equity raised places them in an incredibly strong financial position relative to AIR. AIR is weak, has been fumbling and desperately needs to raise capital but at what price will the market support that ?

[Jaa]

Air NZ's operating stats for June bit of a half way house. Loads and yields were ok considering and they have back 26% of their passengers and 44% of domestic revenue seat kms. The real test/surprise will be July's operating results which had the school holidays and no social distancing requirements.

International is now limited by NZ's managed isolation capacity set at 12k a month for the foreseeable future. In June they flew 26k passengers internationally so this will have to decrease especially as the number of outbound passengers is probably decreasing too.

If they can maintain a domestic load factor of around 80% while flying 70% of the domestic network in August they may come close to monthly cashflow break-even depending on the levels of flight credits, future bookings and lease payments. Regardless the trend will be clear.

With the election on Sep 19 and the op stats out near the end of September. That would be a good time to raise capital and restore the balance sheet, with a positive story of 3 months of rising demand and reducing cash outflows under their belt. I would not call that weak, Beagle.

The big risk is a re-emergence of locally transmitted COVID in NZ like what has happened in Vietnam.

[Beagle]

A reality check. AIR flew revenue passenger kilometers in June 2020 (when for the majority of that month we were in level 1) of less than 10% of what it flew in June 2019. Their overheads will be similar to last year. Even if they can get up to 20% of former capacity overall the reality is that total overhead including staff is likely to be circa 80% of what it was. The prospect of a Trans-tasman bubble anytime in the foreseeable future is now looking like a wishful pipedream and there are clear capacity restraints at the boarder restricting passanger repatriation flights.

The truth is Covid 19 looks like more of a problem world-wide than it did a couple of months ago and until there's a highly effective vacine that's widely available the prospect of any meaningful international schedule apart from freight is extremely dim.

I think they will be doing very well indeed if they can reduce the cash burn to $100m a month in FY21. If others think that's an investable proposition for a major capital raise with an unknown timeframe to when the airline might be profitable again...then I wish you luck, you're going to need it :eek2:

https://www.stuff.co.nz/business/industries/122273364/new-tranche-of-air-new-zealand-cancellations-leaves-kiwi-woman-in-frightening-position

https://www.stuff.co.nz/business/industries/122221203/coronavirus-we-werent-ready-to-handle-this-air-new-zealand-ceo-says

[Bjauck]

...
The truth is Covid 19 looks like more of a problem world-wide than it did a couple of months ago and until there's a highly effective vacine that's widely available the prospect of any meaningful international schedule apart from freight is extremely dim...
IATA thinks it will now take until 2024 - another year longer than it originally forecast - until air passenger traffic gets back to pre covid levels.
https://www.voanews.com/economy-business/world-airline-recovery-take-longer-expected

[iceman]

A reality check. AIR flew revenue passenger kilometers in June 2020 (when for the majority of that month we were in level 1) of less than 10% of what it flew in June 2019. Their overheads will be similar to last year. Even if they can get up to 20% of former capacity overall the reality is that total overhead including staff is likely to be circa 80% of what it was. The prospect of a Trans-tasman bubble anytime in the foreseeable future is now looking like a wishful pipedream and there are clear capacity restraints at the boarder restricting passanger repatriation flights.

The truth is Covid 19 looks like more of a problem world-wide than it did a couple of months ago and until there's a highly effective vacine that's widely available the prospect of any meaningful international schedule apart from freight is extremely dim.

I think they will be doing very well indeed if they can reduce the cash burn to $100m a month in FY21. If others think that's an investable proposition for a major capital raise with an unknown timeframe to when the airline might be profitable again...then I wish you luck, you're going to need it :eek2:

https://www.stuff.co.nz/business/industries/122273364/new-tranche-of-air-new-zealand-cancellations-leaves-kiwi-woman-in-frightening-position

https://www.stuff.co.nz/business/industries/122221203/coronavirus-we-werent-ready-to-handle-this-air-new-zealand-ceo-says

I flew in with AIR this morning from LAX on a Dreamliner. They had 3 PAX in business class, 3 PAX in premium economy class and 83 PAX in economy class. The cargo hold was full. A crew member that has been flying the route regularly last couple of weeks it has been fairly similar on the flights he's done.

I have to say AIR did well with pre-flight communications, boarding and in-flight service.

[Beagle]

I flew in with AIR this morning from LAX on a Dreamliner. They had 3 PAX in business class, 3 PAX in premium economy class and 83 PAX in economy class. The cargo hold was full. A crew member that has been flying the route regularly last couple of weeks it has been fairly similar on the flights he's done.

I have to say AIR did well with pre-flight communications, boarding and in-flight service.

Welcome back mate. Very happy for you that you've finally be able to get home after all this time. 14 days to go and you can look forward to seeing your family again, bet you can't wait ! Don't go jumping any fences ;)

[Jaa]

A reality check. AIR flew revenue passenger kilometers in June 2020 (when for the majority of that month we were in level 1) of less than 10% of what it flew in June 2019. Their overheads will be similar to last year. Even if they can get up to 20% of former capacity overall the reality is that total overhead including staff is likely to be circa 80% of what it was. The prospect of a Trans-tasman bubble anytime in the foreseeable future is now looking like a wishful pipedream and there are clear capacity restraints at the boarder restricting passanger repatriation flights.

The truth is Covid 19 looks like more of a problem world-wide than it did a couple of months ago and until there's a highly effective vacine that's widely available the prospect of any meaningful international schedule apart from freight is extremely dim.

I think they will be doing very well indeed if they can reduce the cash burn to $100m a month in FY21. If others think that's an investable proposition for a major capital raise with an unknown timeframe to when the airline might be profitable again...then I wish you luck, you're going to need it :eek2:

Air NZ can't do anything about Australian or NZ government rules. Only 30 pax allowed per plane into Sydney and Brisbane now so cancellations inevitable.

Think you'll find their costs have already dropped more than 20%. They cut 30% of the staff remember? Fuel is still down about 1/3. Leased planes will be returning and parked planes don't need as much maintenance. That is the big 4 cash costs. Other variable costs will be down too and others non-existent like overtime, bonuses and new plane payments. The government has also cut aviation fees. If the current trends continue, no way their monthly cash burn is $100m+ in August or September.

If a re-emergence of locally transmitted COVID in NZ is the big risk, it is balanced by a vaccine being available at the end of the year. Lots of vaccines going to phase 3 trials in the US and UK now.

[tommy_d]

I flew in with AIR this morning from LAX on a Dreamliner. They had 3 PAX in business class, 3 PAX in premium economy class and 83 PAX in economy class. The cargo hold was full. A crew member that has been flying the route regularly last couple of weeks it has been fairly similar on the flights he's done.

I have to say AIR did well with pre-flight communications, boarding and in-flight service.

sounds like a tick for air nz. And glad you managed to get where you want to go.

Another tick for air nz from me.
Although the time taken to be able to use the credits from cancelled flights has been a hassle, i'm happy that they've got the tool up and running. The airpoints used to pay for cancelled flights were credited to my account a while back, and today i booked and paid for flights using a credit from a ticket paid with real dollars and it worked seamlessly.

[Beagle]

https://www.nzherald.co.nz/business/news/video.cfm?c_id=3&gal_cid=3&gallery_id=222521

[iceman]

https://www.nzherald.co.nz/business/news/video.cfm?c_id=3&gal_cid=3&gallery_id=222521

All these articles and wild guesstimates are just plucking numbers out of thin air. I don't see how anyone can give any half informed forecasts about world travel or tourism at this stage, except that it will get much worse before it gets better. Until we have a reliable and widely available effective vaccine, things are looking very bleak.

[biker]

https://www.nzherald.co.nz/business/news/video.cfm?c_id=3&gal_cid=3&gallery_id=222521

Where is this article? Sounds interesting but the link doesn’t take you there and can’t se it on the Herald site.

[winner69]

https://www.nzherald.co.nz/business/news/video.cfm?c_id=3&gal_cid=3&gallery_id=222521

Even getting back to 2019 levels in 2027 is a big guess

My considered guess is never

As I heard today - So when does the world go back to normal? Sorry to say, but it already did. This is it. This is the new normal.

[iceman]

Where is this article? Sounds interesting but the link doesn’t take you there and can’t se it on the Herald site.

It does take you to a podcast interview

[Zaphod]

This is it. This is the new normal.

Long-term, for the most part, things will not remain this way. If the virus continues to mutate becoming more infectious but less virulent, people actively take precautions to slow the spread, and we can inoculate against it, then we'll slowly return to our former ways. That's just human nature.

[Beagle]

Even getting back to 2019 levels in 2027 is a big guess

My considered guess is never

As I heard today - So when does the world go back to normal? Sorry to say, but it already did. This is it. This is the new normal.

Spending endless hours jam packed in like sardines in a narrow aluminium tube has never looked this unappealing and I can't help but wonder if the romance of travel ever comes back ? Might not ever get to Switzerland ? Just as well we have Queenstown which is arguably just as good....and I can drive there.

[winner69]

Spending endless hours jam packed in like sardines in a narrow aluminium tube has never looked this unappealing and I can't help but wonder if the romance of travel ever comes back ? Might not ever get to Switzerland ? Just as well we have Queenstown which is arguably just as good....and I can drive there.

Good time to reread Taleb’s Antifragile

all about how some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure , risk, and uncertainty. Maybe get a winner for the future - doubt whether airlines will be winners

[Jaa]

Long-term, for the most part, things will not remain this way. If the virus continues to mutate becoming more infectious but less virulent, people actively take precautions to slow the spread, and we can inoculate against it, then we'll slowly return to our former ways. That's just human nature.

As unsustainable, extractive and even banal as tourism had gotten in so many place around the world pre-COVID I suspect you are right Zaphod. Could even be a tourism surge from people wanting to make up for lost time. A bit like the baby boom after WWII.

[Raz]

As unsustainable, extractive and even banal as tourism had gotten in so many place around the world pre-COVID I suspect you are right Zaphod. Could even be a tourism surge from people wanting to make up for lost time. A bit like the baby boom after WWII.

Currently I do see pent up demand, it really depends on duration, it changes outlook and habits the longer it goes on however its also will change the economics...in the industry and disposable income of individuals, the masses matter than those who can just afford at any price.

[Jaa]

Currently I do see pent up demand, it really depends on duration, it changes outlook and habits the longer it goes on however its also will change the economics...in the industry and disposable income of individuals, the masses matter than those who can just afford at any price.

True, even Air NZ has been surprised by the pent up demand for domestic flights and that was after only 2-3 months of serious restrictions.

Disposable incomes may decline but traveling likely will never be cheaper. Plenty of excess capacity in airlines, hotels, attractions, restaurants etc.

[biker]

True, even Air NZ has been surprised by the pent up demand for domestic flights and that was after only 2-3 months of serious restrictions.

Disposable incomes may decline but traveling likely will never be cheaper. Plenty of excess capacity in airlines, hotels, attractions, restaurants etc.

Yes, and the business’s you mention will adjust their margins to attract people back, returning prices to ‘normal’ at a later date when people ARE back.
So initially a window of very cheap travel which keen travellers will snap up.

[iceman]

The new normal !!!
https://www.forbes.com/sites/avidan/2020/08/02/in-a-twist-on-loyalty-programs-emirates-is-promising-travelers-a-free-funeral-if-infected-with-covid-19/

[Sideshow Bob]

The new normal !!!
https://www.forbes.com/sites/avidan/2020/08/02/in-a-twist-on-loyalty-programs-emirates-is-promising-travelers-a-free-funeral-if-infected-with-covid-19/

Extremely reassuring! ;)

Although I haven't died for a while, don't think €1,500 would go that far.....

[Marilyn Munroe]

The time has come for civil servants in the Ministry of Transport instead of sipping tea and nibbling biscuits give some stark but realistic advice to the incoming government about the future of Cullen Airlines.

Every ten years or so Cullen Airlines stalls financially and needs an injection of taxpayers money to survive.

A policy of allowing Cullen Airlines to crash and burn next time is politicly untenable. There is no way our elected representatives would accept travelling to Wellington on a bus.

The realpolitik aim should be to limit the dip into taxpayers pockets next time, and there will be a next time.

I propose the the Government announce a single isle aircraft only rescue policy. Operation of wide body jets is solely at the creditors and shareholders risk. This allows support for domestic and Trans Tasman operations. To those that gasp and mutter words like tourism and flag carrier I say international cargo is carried OK by non Kiwi shipping companies why not air travel.

Boop bopp de do
Marilyn

[Beagle]

The new normal !!!
https://www.forbes.com/sites/avidan/2020/08/02/in-a-twist-on-loyalty-programs-emirates-is-promising-travelers-a-free-funeral-if-infected-with-covid-19/

Pretty good effort in making PPE gear look good but there's no way to make death look sexy no matter who pays !

[Jaa]

The time has come for civil servants in the Ministry of Transport instead of sipping tea and nibbling biscuits give some stark but realistic advice to the incoming government about the future of Cullen Airlines.

Every ten years or so Cullen Airlines stalls financially and needs an injection of taxpayers money to survive.

A policy of allowing Cullen Airlines to crash and burn next time is politicly untenable. There is no way our elected representatives would accept travelling to Wellington on a bus.

The realpolitik aim should be to limit the dip into taxpayers pockets next time, and there will be a next time.

I propose the the Government announce a single isle aircraft only rescue policy. Operation of wide body jets is solely at the creditors and shareholders risk. This allows support for domestic and Trans Tasman operations. To those that gasp and mutter words like tourism and flag carrier I say international cargo is carried OK by non Kiwi shipping companies why not air travel.

Boop bopp de do
Marilyn

Sounds like a solution in search of a problem.

The government made a fantastic profit from bailing out Air NZ in 2001, 19 years ago not 10 like you say. Whose to say they won't do so again this time?

Mixed ownership model of Air NZ is working well for all stakeholders IMHO. Don't change what isn't broken.

[Jaa]

Interesting few articles and interviews on NZHerald.

In one Cam Wallace states the domestic network is almost back to 80% capacity (https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12354376) and in the second Grant Bradley states Air NZ got its cash burn down to $60m in June (https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12352376). Forsyth Bar also upgraded its price target from 80 to 90 cents.

Lastly an article about the government's cargo subsidy scheme (https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12354312) being under-spent with only $140m of the $320m allocated to be spent by the end of the month and thus likely to be extended. Air NZ must be earning at least half of that.

[Beagle]

Thank you for your second link wherein you claimed that Grant Bradley states AIR got its cash burn down to $60m in June.
I've had a super hard last two weeks working on a major assignment with a fixed deadline so forgive me, but I didn't see that claim in that article. Perhaps I am going cross eyed ?. Perhaps people should read it for themselves and make up their own mind. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12352376
One thing is absolutely for sure, a price target 12 months hence of 90 cents is a long way short of today's closing price of one dollar thirty something. Until there's a widely available and highly effective vaccine I remain of the view AIR is a very bad and extremely high risk investment.

[Jaa]

Thank you for your second link wherein you claimed that Grant Bradley states AIR got its cash burn down to $60m in June.
I've had a super hard last two weeks working on a major assignment with a fixed deadline so forgive me, but I didn't see that claim in that article. Perhaps I am going cross eyed ?. Perhaps people should read it for themselves and make up their own mind. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12352376
One thing is absolutely for sure, a price target 12 months hence of 90 cents is a long way short of today's closing price of one dollar thirty something. Until there's a widely available and highly effective vaccine I remain of the view AIR is a very bad and extremely high risk investment.

He says it in the video, about half way through.

Always a good idea to watch for trend changes Beagle. Get away from here and enjoy your weekend :)

[Beagle]

He says it in the video, about half way through.

Always a good idea to watch for trend changes Beagle. Get away from here and enjoy your weekend :)

Good advice, had a really good weekend, much needed !!
Looks like Virgin is slimming down. No return to N.Z. yet so that's good for AIR, (for now). https://www.odt.co.nz/business/virgin-slashes-3000-more-jobs-no-timing-return-nz

[kyanar]

Sounds like a solution in search of a problem.

The government made a fantastic profit from bailing out Air NZ in 2001, 19 years ago not 10 like you say. Whose to say they won't do so again this time?

Mixed ownership model of Air NZ is working well for all stakeholders IMHO. Don't change what isn't broken.

I would generally treat anything MM says about Air NZ with a refinery of salt. Said member appears to have a personal vendetta against AIR and QAN and would be spewing hatred if they literally developed technology to teleport individuals across the planet and monetise it.

[Waltzing]

No PPE offered for crews of the special isolation flights. We can assume the transfers are virus free. On the good new front my AIR-NZ-Singapore european flight credits have been refunded after 2 months wait... the money does come back... eventually...

[JohnnyTheHorse]

US airline index up 7% overnight. Seeing a rotation from tech into airlines and travel. Air has been trading in a very narrow range, so will this be enough of a catalyst to change things?

[gains]

US airline index up 7% overnight. Seeing a rotation from tech into airlines and travel. Air has been trading in a very narrow range, so will this be enough of a catalyst to change things?

It'd be hard to differentiate from the announcement of a travel bubble with the Pacific Islands I imagine..

[Marilyn Munroe]

I would generally treat anything MM says about Air NZ with a refinery of salt. Said member appears to have a personal vendetta against AIR and QAN and would be spewing hatred if they literally developed technology to teleport individuals across the planet and monetise it.

My beef against Cullen Airlines is the existence of the Cullen Put.

In other words if things go well shareholders get to quaff champagne and swing from the chandeliers if things turn horrid taxpayers have to front up with their hard earned cash.

There have already been calls on the Cullen Put and and in all likelihood there will be more in the future.

It is time ordinary Kiwi jokers who have to pay for this by stacking supermarket shelves or milking cows told the sacred cow, Cullen Airlines, next time you are on your own mate.

Boop boop de do
Marilyn

[Beagle]

I presume all flights in and out of Auckland will be grounded tomorrow ? Wonder what precautions there will be for other domestic flights ?

[gains]

I presume all flights in and out of Auckland will be grounded tomorrow ? Wonder what precautions there will be for other domestic flights ?

I have a relative travelling into Auckland, before they move up the levels, this morning. I don't believe any flights are flying after that

[iceman]

I’m at Auckland Airport (domestic). All normal here until midday

[winner69]

I’m at Auckland Airport (domestic). All normal here until midday

Would have been end of the world if you were held in captivity in Auckland for a few more days eh

Bon voyage

[Zaphod]

I presume all flights in and out of Auckland will be grounded tomorrow ? Wonder what precautions there will be for other domestic flights ?

Have been notified that other flights are now delayed or cancelled, due to aircraft repositioning issues. This will have a massive flow-on effect, and I pity the airline staff having to deal with this mess this morning.

[kyanar]

My beef against Cullen Airlines is the existence of the Cullen Put.

In other words if things go well shareholders get to quaff champagne and swing from the chandeliers if things turn horrid taxpayers have to front up with their hard earned cash.

There have already been calls on the Cullen Put and and in all likelihood there will be more in the future.

It is time ordinary Kiwi jokers who have to pay for this by stacking supermarket shelves or milking cows told the sacred cow, Cullen Airlines, next time you are on your own mate.

Boop boop de do
Marilyn

The largest of those shareholders is the taxpayer (NZ Government) and it has quaffed quite a lot of champagne out of their original bailout. Even the billion dollars (of loans, with interest, that come with terms that prohibit any shareholders quaffing anything while the loan facility exists) that is being chipped in now is easily dwarfed by the dividends and capital gains the government has gained from the bailout. The government has a vested interest in preventing it going bust because as 51% owner, they stand to lose a lot of money if that happens.

So no, I don't buy your claim that it's anything to do with the commercial relationship between AIR and the Government. The fact you insist on calling it "Cullen Airlines" (and Qantas "Queer and Nasty" which is actually plain offensive) certainly belies your personal hatred of the company. Did Rob Fyfe run over your dog or something?

[nztx]

The largest of those shareholders is the taxpayer (NZ Government) and it has quaffed quite a lot of champagne out of their original bailout. Even the billion dollars (of loans, with interest, that come with terms that prohibit any shareholders quaffing anything while the loan facility exists) that is being chipped in now is easily dwarfed by the dividends and capital gains the government has gained from the bailout. The government has a vested interest in preventing it going bust because as 51% owner, they stand to lose a lot of money if that happens.

So no, I don't buy your claim that it's anything to do with the commercial relationship between AIR and the Government. The fact you insist on calling it "Cullen Airlines" (and Qantas "Queer and Nasty" which is actually plain offensive) certainly belies your personal hatred of the company. Did Rob Fyfe run over your dog or something?


Something ran over my foot though when I tried to hastily exit when things previously hit the fan a few months back with AIR .. should I like them any better now ? ;)

[Jaa]

My turn to express astonishment at Air NZ's share price... it hasn't changed from a week ago! :confused:

As I have stated here, the domestic business was just starting to thrive and this would have been enough to sustain the company until a vaccine arrives so long as the virus didn't re-emerge.

I am confident the country will get on top of this latest cluster and run it into the ground. Air NZ also has plenty of reserves (and the government loan) to survive the short term effects. Its the medium term effect on confidence and people's propensity to travel for the rest of year which will hammer Air NZ.

The hoteliers know...


New Zealand Hotel Owners Association executive director Amy Robens said the latest impacts on the struggling sector were “beyond grim” and the ongoing repercussions seemingly endless.

...

“Any extension to the current lockdown status will see the moderate level of business hotels are experiencing wash completely. We are at the end of the road,” Robens warned. - Virus resurgence a step too far for hoteliers (https://www.nbr.co.nz/story/virus-resurgence-step-too-far-hoteliers)

Glad you took the weekend off and enjoyed life a bit while you could Beagle. Life can continue on with social distancing and masks but it isn't as much fun.

[tommy_d]

the reddish-eye from new plymouth to wellington last tuesday wasn't as full as normal, and it was fairly cheap...
had a meeting with a colleague from auckland yesterday, via zoom, he was stuck in auckland airport....
air-nz seems like a stock to trade or ignore, not a stock to buy and hold

[Waltzing]

here in the central north island you would not have even know there was a level 2 today and as for social distancing there was plenty of parties last night in hamilton central. Air fare credit Money from air arriving back from flight bookings at last in bank accounts. A member from the hamilton city council said to me that hand sanitizer in council buildings had almost disappeared until she reminded management teams. this little leak should actually help the population realise that need to improve behaviours as the crazy drivers also in this area showed that many people simple did not understand the seriousness of the situation.

[Blue Skies]

Will be interested to see if Qantas's just announced A$2.7 Billion loss, will sober up some of AIR current shareholders this afternoon.

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12358047 Read it and weep. Excerpt "The impact of Covid on all airlines is clear. It's devastating and it will be a question of survival for many".

A VERY bad sector to be invested in for the foreseeable future. AIR reports next Thursday. Good luck to shareholders, you're going to need it :eek2:

I think the chances of a substantial capital raise at a deeply discounted price being announced contemporaneously with the full year result next week are quite high.

[Paradox]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12358047 Read it and weep. Excerpt "The impact of Covid on all airlines is clear. It's devastating and it will be a question of survival for many".

A VERY bad sector to be invested in for the foreseeable future. AIR reports next Thursday. Good luck to shareholders, you're going to need it :eek2:

I think the chances of a substantial capital raise at a deeply discounted price being announced contemporaneously with the full year result next week are quite high.

However, the market seems to like AIRNZ for other reasons and is propping it up really well.

Disc: Maintaining short position

[steveb]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12358047 Read it and weep. Excerpt "The impact of Covid on all airlines is clear. It's devastating and it will be a question of survival for many".

A VERY bad sector to be invested in for the foreseeable future. AIR reports next Thursday. Good luck to shareholders, you're going to need it :eek2:

I think the chances of a substantial capital raise at a deeply discounted price being announced contemporaneously with the full year result next week are quite high.

Yes agree if they dilute the SP enough it would force the govt to stump up,or have their 52% diluted to what around 30%.It would be better than the govt loan at what 7-8%!

[RGR367]

However, the market seems to like AIRNZ for other reasons and is propping it up really well.

Disc: Maintaining short position

Shorten it a bit more for your dollar's sake.

[Beagle]

However, the market seems to like AIRNZ for other reasons and is propping it up really well.

Disc: Maintaining short position

I'm not concerned by that as the fundamentals of the business are really shocking so I am also maintaining my modest short position.

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12358616 Pay-walled

"The airline — led by Walsh — has been advocating for months now to its 51 per cent shareholder (the Government) that it should step up and lead a capital raise to restore the company's balance sheet". Walsh is the new Chairperson.

I think there's at least a 50% chance a substantial capital raise will be announced on Thursday this week along with the annual result.

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12358616 Pay-walled

"The airline — led by Walsh — has been advocating for months now to its 51 per cent shareholder (the Government) that it should step up and lead a capital raise to restore the company's balance sheet". Walsh is the new Chairperson.

I think there's at least a 50% chance a substantial capital raise will be announced on Thursday this week along with the annual result.

More like 80% I reckon ....can’t say it’s a certainty can we

Ready and primed are we?

[Beagle]

More like 80% I reckon ....can’t say it’s a certainty can we

Ready and primed are we?

The exact opposite of what would make a good quasi term deposit :)

[blackcap]

More like 80% I reckon ....can’t say it’s a certainty can we

Ready and primed are we?

The sharesies crowd will be all over this one. I reackon a 1:1 at $1 would be a goer. Give em another $1B and would not need to touch the loan facility. Whats not to like.

[Heimand]

I would say there is more than 80% chance of capital rise soon.

[Paradox]

The sharesies crowd will be all over this one. I reackon a 1:1 at $1 would be a goer. Give em another $1B and would not need to touch the loan facility. Whats not to like.
Given it is trading at $1.38, it may get good support even at $1.25?

[Stranger_Danger]

The sharesies crowd will be all over this one. I reackon a 1:1 at $1 would be a goer. Give em another $1B and would not need to touch the loan facility. Whats not to like.

My read on the Sharesies crowd is they would not have the cash on hand, as a group, to participate 1:1. It would also be the first rights issue for a lot of them, many would be confused, and for some it could blow up the "Jacinda has our back" thesis.

I think a successful raising would require an outsized institutional placement component to be successful - and that will require a much lower price than the Sharesies crowd would be theoretically willing to pay.

[blackcap]

My read on the Sharesies crowd is they would not have the cash on hand, as a group, to participate 1:1. It would also be the first rights issue for a lot of them, many would be confused, and for some it could blow up the "Jacinda has our back" thesis.

I think a successful raising would require an outsized institutional placement component to be successful - and that will require a much lower price than the Sharesies crowd would be theoretically willing to pay.

The sharesies crowd have had quite a few placements or rights issues and have participated with gusto. Think KMD, IFT, IKE, and many more the last 2 months. Many have been disappointed they got scaled back. Well that is my read on it.

I take your view about the price. I think insto's would accept $1 as a 30% discount to current SP. Also remembering the govt has to put in their share so not that much needs to be raised.

That said my initial post was a bit more tongue in cheek, sounds nice and symmetrical; 1 for 1 at 1.

[Sideshow Bob]

I thought there was talk capital raise not until after the election? Which would have been 4 weeks away.

Now about 8 weeks away......maybe they can't wait that long??

[Beagle]

The sharesies crowd have had quite a few placements or rights issues and have participated with gusto. Think KMD, IFT, IKE, and many more the last 2 months. Many have been disappointed they got scaled back. Well that is my read on it.

I take your view about the price. I think insto's would accept $1 as a 30% discount to current SP. Also remembering the govt has to put in their share so not that much needs to be raised.

That said my initial post was a bit more tongue in cheek, sounds nice and symmetrical; 1 for 1 at 1.

111 is a good basis to play cricket but I doubt Covid 19 will be a respecter of the long standing rules of the gentleman's game. Its hard to hit the ball out of the park when you keep getting underarm deliveries. $1.1 Billion should see them through to next year's capital raise and keep the hundreds of millions per annum of GST and PAYE flowing through to the Govt so they can't lose...but as for other shareholders, they look like they're on a hiding to nothing.

[iceman]

The International Air Transport Association warning of global annual airline losses of USD 84 BILLION this year. Frightening.

https://www.bbc.com/news/business-53908474

[Paradox]

The International Air Transport Association warning of global annual airline losses of USD 84 BILLION this year. Frightening.

https://www.bbc.com/news/business-53908474

Yet, AirNZ is one of the market darlings and continues to climb. Any guesses what’ll happen tomorrow after the results are out?

[iceman]

Yet, AirNZ is one of the market darlings and continues to climb. Any guesses what’ll happen tomorrow after the results are out?

No guesses from me on that one. I do not understand the current valuation and have no interest in getting back on the SH register anytime soon.

[Beagle]

Glad I didn't book Jetstar for my annual ski holiday this year, (usually go first thing in Sept). Cancelling services altogether in N.Z. through to at least 6 Sept paints them in a bad light. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12359252

They're really not interested at all in maintaining continuity of services unless its profitable to them. Not one ounce of thought for customers and how they're affected...that's something new for Jetstar isn't it ! (sarcasm intended).

Picking between flying AIR or flying Jetstar at this point feels like choosing between being forced to marry one extremely ugly sister or the other.
The plain fact of the matter is Covid 19 is major risk on public transport despite all the lies AIR have tried to perpetrate about their so called hospital grade air filters. Those filters will not help you if someone near you has Covid 19.

If I can't be bothered driving the distance I'm not going.

[iceman]

Glad I didn't book Jetstar for my annual ski holiday this year, (usually go first thing in Sept). Cancelling services altogether in N.Z. through to at least 6 Sept paints them in a bad light. They're really not interested at all in maintaining continuity of services unless its profitable to them. Not one ounce of thought for customers and how they're affected...that's something new for Jetstar isn't it (sarcasm intended).

Picking between flying AIR or flying Jetstar at this point feels like choosing between being forced to marry one extremely ugly sister or the other. Covid 19 is major risk on public transport despite all the lies AIR have tried to perpetrate about their so called hospital grade air filters.

AIR not much better mate. At 12.05 yesterday I booked a ticket for my daughter Dunedin-Auckland. At 12.08 she received a cancellation notice. Dad back on the phone for 35 minutes to change to a flight the following day which was handled well by the operator. 3 hours later that flight also cancelled. Back on the phone. This time waiting 65 minutes to change to another flight the same day, BUT with a 9 hour stopover in Wellington. So leaves Dunedin at 0625 hrs and arrives Auckland 18.15 hrs. That is if its not cancelled !!

[dobby41]

AIR not much better mate. At 12.05 yesterday I booked a ticket for my daughter Dunedin-Auckland. At 12.08 she received a cancellation notice. Dad back on the phone for 35 minutes to change to a flight the following day which was handled well by the operator. 3 hours later that flight also cancelled. Back on the phone. This time waiting 65 minutes to change to another flight the same day, BUT with a 9 hour stopover in Wellington. So leaves Dunedin at 0625 hrs and arrives Auckland 18.15 hrs. That is if its not cancelled !!

Last weekend I had 2 cancellations from a flight from CH to AK but only a few minutes wait each time and very well handled.
I got to Auckland much easier than anyone who had booked Jetstar considering that they had cancelled ALL flights with no options.

[Blue Skies]

Yet, AirNZ is one of the market darlings and continues to climb. Any guesses what’ll happen tomorrow after the results are out?


Either there'll be a rush for the oxygen masks as they pop out of the overhead bins, or the passengers will continue to reassure themselves the steep dive, engine on fire & multiple alarms going off in the cockpit are nothing to worry about.

Expect after a brief sell off SP will recover, these are indeed strange times.

Disc sold out

[McPussPuss]

With all the focus on airlines cutting costs, operating routes intentionally at a loss is a business plan some managements may potentially avoid. This at a time when there is much uncertainty regarding the political whims on lock downs and alert levels leading up to an election where electorate sentiment is clear about being tough on covid.

Jetstar has much lower overheads than AIR which makes the choice to keep planes on the ground relatively enticing. They would obviously think this outweighs continuity of service as they clearly have the govt. as the cause and the low cost end of the market is more sensitive to price primarily as opposed to the segment AIR caters to.

All domestic operators have been trying to have over the top social distancing requirements on board relaxed at levels 2 and 3 as their own risk management strategies, (e.g. mandatory masks prior to the govt mandate) are comprehensive, conservative and backed by IATA. There have been so few, if any, cases of transmission on board aircraft and in my opinion it is much safer than going to a supermarket where people are free to not wear masks and employ their own versions 'distancing' while picking up and putting back items for others to handle at their leisure. An exemption however safe unfortunately won't sit well with the optics the govt. are going with.

IATA guidance on page 25 specific to distancing on board;

https://www.iata.org/contentassets/df216feeb8bb4d52a3e16befe9671033/iata-guidance-cabin-operations-during-post-pandemic.pdf?fbclid=IwAR2ocSgr8vAQD2iXYBlySWtJ2gTa YkwfBMYxqzN9XjUDdtrnjwghxiq_e0o

[wilba]

Last weekend I had 2 cancellations from a flight from CH to AK but only a few minutes wait each time and very well handled.
I got to Auckland much easier than anyone who had booked Jetstar considering that they had cancelled ALL flights with no options.

are you an elite or gold member?

[dobby41]

are you an elite or gold member?

No, just bronze.
When I rang the system picked up my airpoints number and that I had a flight coming up - so quick answering but a person who could do stuff.

[winner69]

Suppose you need to take ones face mask off if the oxygen thingies drop down

[wilba]

No, just bronze.
When I rang the system picked up my airpoints number and that I had a flight coming up - so quick answering but a person who could do stuff.

gotcha. at least in pre covid days airnz would re-route/prioritize those that were at least gold status up the queue so they wouldn't have to wait.

[iceman]

They still do that wilba and it cuts waiting time. Quite often significantly. But they are extremely busy now so one can not expect an instant response, whatever the level. I think they’re all doing their best in very trying circumstances and no doubt having to deal with many short fused and rude customers. I don’t envy them

[Beagle]

Tomorrow the landing gear tyres hit the runway...its going to be a rough landing and very ugly.

[couta1]

Tomorrow the landing gear tyres hit the runway...its going to be a rough landing and very ugly. The way the NZX is currently operating it's not going to matter. Lol

[JSwan]

Tomorrow the landing gear tyres hit the runway...its going to be a rough landing and very ugly.

Knowing AIR the stock might rally hard because the loss wasn't as "bad" as expected

[Heimand]

Knowing AIR the stock might rally hard because the loss wasn't as "bad" as expected

I agree, they did a lot better than expected! Look at other airlines and you can see AIR had a better plan! Tomorrow we will see above $1.50.

[stoploss]

The way the NZX is currently operating it's not going to matter. Lol
Can see a total clusterxxxx NZX down with another cyber attack at the same time 100's of Sharsies investors trying to bail .....

[tommy_d]

AIR not much better mate. At 12.05 yesterday I booked a ticket for my daughter Dunedin-Auckland. At 12.08 she received a cancellation notice. Dad back on the phone for 35 minutes to change to a flight the following day which was handled well by the operator. 3 hours later that flight also cancelled. Back on the phone. This time waiting 65 minutes to change to another flight the same day, BUT with a 9 hour stopover in Wellington. So leaves Dunedin at 0625 hrs and arrives Auckland 18.15 hrs. That is if its not cancelled !!

stay in dunedin? seems pretty stupid to be booking non-essential flights into and out of auckland right now. I'd criticise the ticket buyer's smarts way before i'd moan about the airline on this onew

[iceman]

stay in dunedin? seems pretty stupid to be booking non-essential flights into and out of auckland right now. I'd criticise the ticket buyer's smarts way before i'd moan about the airline on this onew

Not very smart to be this judgmental without knowing any of the facts, not even travel dates. I deal with Air NZ a lot and think they are generally a good bunch.

[blackcap]

stay in dunedin? seems pretty stupid to be booking non-essential flights into and out of auckland right now. I'd criticise the ticket buyer's smarts way before i'd moan about the airline on this onew

How do you know it was non-essential travel? It might have been a doctor needing to get back to the coal face or whatever.

[winner69]

I think the market will like the Look Through Covid Adjusted Normalised Operating Profit of $224m

Nothing else matters

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/358759/329436.pdf

[trader_jackson]

I think the market will like the Look Through Covid Adjusted Normalised Operating Profit of $224m

Nothing else matters

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/358759/329436.pdf

When is the big capital raise coming? Must be soon... gearing at nearly 70%, still burning hundreds of millions each quarter... and only have a little bit over a few hundred million left in the bank (before having to borrow on that extremely expensive shark loan from the government).

But you're right winner - the current ridiculously high share price says it all - nothing at all matters, the story is strong with Air NZ

[100101]

When is the big capital raise coming? Must be soon... gearing at nearly 70%, still burning hundreds of millions each quarter... and only have a little bit over a few hundred million left in the bank (before having to borrow on that extremely expensive shark loan from the government).

But you're right winner - the current ridiculously high share price says it all - nothing at all matters, the story is strong with Air NZ

Absolutely. The airline cant keep relying on government handouts shielding the rest of the shareholders.

[blackcap]

Telling for me is $1.1B in funds left...... (including govt facility). So actually $200m left and going to be dipping into it soon. Unless they do a CR.

[iceman]

When is the big capital raise coming? Must be soon... gearing at nearly 70%, still burning hundreds of millions each quarter... and only have a little bit over a few hundred million left in the bank (before having to borrow on that extremely expensive shark loan from the government).

But you're right winner - the current ridiculously high share price says it all - nothing at all matters, the story is strong with Air NZ

With cash of only around $200m and burning through $ 175m per month in recent months but forecasting to get that down to $65-85m, we can assume they run out of cash in about 2 months, without a capital raise or Government loan. A decision surely is looming on the CR.

[allfromacell]

With cash of only around $200m and burning through $ 175m per month in recent months but forecasting to get that down to $65-85m, we can assume they run out of cash in about 2 months, without a capital raise or Government loan. A decision surely is looming on the CR.


"Short-term liquidity as at 25 August 2020 was approximately $1.1 billion, made up of cash and the $900 million standby loan facility from the New Zealand Government. Due to the strong cash position pre-Covid-19, swift action taken by management to reduce cash burn and a better than expected return of domestic demand after the initial lockdown was lifted in New Zealand, the airline has not yet utilised the standby loan facility. However, it expects to start drawing on these funds in the coming days."

Looks like they already have run out of cash.

[trader_jackson]

"Short-term liquidity as at 25 August 2020 was approximately $1.1 billion, made up of cash and the $900 million standby loan facility from the New Zealand Government. Due to the strong cash position pre-Covid-19, swift action taken by management to reduce cash burn and a better than expected return of domestic demand after the initial lockdown was lifted in New Zealand, the airline has not yet utilised the standby loan facility. However, it expects to start drawing on these funds in the coming days."

Looks like they already have run out of cash.

Yup, looks like it, and they're already at 70% leverage... no worries, share price heading to $1.50 today!!

[Blue Skies]

Wow just $200 M left at the end of June. Burnt through $85 M of that in July & another $85 M in August, no wonder needing to draw down of that govt loan within days.

[Heimand]

I think 200m left by 25th of August.

[Paradox]

Yup, looks like it, and they're already at 70% leverage... no worries, share price heading to $1.50 today!!
Initially maybe, but there will be downward pressure from big holders. At this burn rate, they will get through until elections and when the public attention is elsewhere, the drawdown will start (an easy win in the first few days for the new government)

[winner69]

Still have $800m plus of fares paid in advance (or waiting for refunds) and over $400m for expected loyalty travel / points

[Beagle]

Total Equity left as at 30 June 2020 $1,318m.
Annual Depreciation and amortization last year (excludes abnormal write down on 777-200's) $841m = $70m per month
Predicted cash burn at mid point of range going forward $$75m per month.
Total of cash burn and depreciation and amortization $145m per month.

1318 / 145 = 9.1 months before all equity will be expunged as at 30/06/2020 = 7.2 months from today's date.

NTA as at 30/06/2020 was $1.01. With estimated losses since of circa $290m I estimate the current NTA is about 75 cents.

My conclusion.
The company is almost certainly going to need to raise capital in the next 7 months otherwise it will be insolvent and in a negative equity situation.
I believe the prudent thing to do would to have been to raise equity now.
I think its politically inconvenient for the Govt to do so because some of its voter base would think the Govt is supporting capitalism.
Raising equity later runs the very real risk of trying to raise capital from an extremely weak desperate financial position and the risk of a repeat of the extremely deeply discounted capital raise after 9/11 at 25 cents is very real.

If anyone thinks this is an investable proposition at the current share price I very strongly recommend you take professional advice.

[iceman]

"Short-term liquidity as at 25 August 2020 was approximately $1.1 billion, made up of cash and the $900 million standby loan facility from the New Zealand Government. Due to the strong cash position pre-Covid-19, swift action taken by management to reduce cash burn and a better than expected return of domestic demand after the initial lockdown was lifted in New Zealand, the airline has not yet utilised the standby loan facility. However, it expects to start drawing on these funds in the coming days."

Looks like they already have run out of cash.

Yes of course the cash position I referred to was as of end of June. My bad. So they're clearly already very close to running out of cash.

[Blue Skies]

I think 200m left by 25th of August.


No it was approx $200M left at the end of June.
And since then, burnt through $85M of that in July & another $85M in August (well we're almost at the end of August).
So all gone in next fortnight at this rate.
Ongoing hoping to get cash burn down as low as $65M per month & might be a few years before travel returns to anything resembling normal.

[biker]

No it was approx $200M left at the end of June.
And since then, burnt through $85M of that in July & another $85M in August (well we're almost at the end of August).
So all gone in next fortnight at this rate.
Ongoing hoping to get cash burn down as low as $65M per month & might be a few years before travel returns to anything resembling normal.

Just read the announcement

“ Short-term liquidity as at 25 August 2020 was approximately $1.1 billion, made up of cash and the $900 million standby loan facility from the New Zealand Government.”

[Beagle]

Probably burned through more in August as a result of the Auckland lockdown.
Liquidity (if you can call it that because of the degree of prepaid airline tickets which are technically a liability) was $235m as at 30/6/20, (PowerPoint presentation).
The fact that they are talking about drawing down on the Govt loan "within days" suggests total cash burn for July-August is VERY close to $235m !

[Stranger_Danger]

I think its politically inconvenient for the Govt to do so because some of its voter base would think the Govt is supporting capitalism.


Indeed, can't be supporting capitalism! Any suggestion of that and the left will be typing even more anti-capitalist messages into Facebook, from their Apple device, prior to doing some comfort shopping at Amazon, often with money given to them after it was forcibly extracted from others, to make themselves feel better after even having to think about that dirty, evil capitalism.

Oh to be so pure.

[trader_jackson]

I've never seen a company run out of cash, be drowning in debt, have a very poor outlook in the short to medium term and still be valued $1.6 billion (without fiddling the books that is) - yet AIR today, with its share price flat on the open, has proved it can be done!

[Paradox]

I've never seen a company run out of cash, be drowning in debt, have a very poor outlook in the short to medium term and still be valued $1.6 billion (without fiddling the books that is) - yet AIR today, with its share price flat on the open, has proved it can be done!
Almost a monopoly + Brand

[trader_jackson]

Almost a monopoly + Brand

A monopoly when times are poor and everyone loses money maybe, a highly intense competition when there is breakeven/a fraction of profit to be made - so not sure how 'almost a monopoly' is actually a good thing right now, but as for the brand... I personally don't think AIR NZ's brand is worth remotely close to $1.6b but at least it isn't a negative value I suppose

[Cyclical]

I think its politically inconvenient for the Govt to do so because some of its voter base would think the Govt is supporting capitalism.

Really? Even the socialists like to fly sometimes.



I've never seen a company run out of cash, be drowning in debt, have a very poor outlook in the short to medium term and still be valued $1.6 billion (without fiddling the books that is) - yet AIR today, with its share price flat on the open, has proved it can be done!

It really does defy belief.

[Waltzing]

flying on fumes!!! that slow whine you can hear is the turbines slowing down as the fleet joins the birds flying south....

[Waltzing]

Air needs to raise capital and reject the government loan... extortion by the non believers.

[Beagle]

I've never seen a company run out of cash, be drowning in debt, have a very poor outlook in the short to medium term and still be valued $1.6 billion (without fiddling the books that is) - yet AIR today, with its share price flat on the open, has proved it can be done!

I think a "very poor outlook" quite significantly understates the seriousness of the situation. The company is highly likely to have no capital left within the next 7-8 months. In the power point presentation they're now talking about demand not recovering to 2019 level's until 2023 or even later.
A massive capital raise is coming or the company will have to be liquidated, its really that simple.

[jimdog31]

I think a "very poor outlook" quite significantly understates the seriousness of the situation. The company is highly likely to have no capital left within the next 7-8 months. In the power point presentation they're now talking about demand not recovering to 2019 level's until 2013 or even later.
A massive capital raise is coming or the company will have to be liquidated, its really that simple.

Would a capital raise mean the govt has to stump up some cash or face dilution? or can they block a raise with their current %? excuse my ignorance beagle

[Beagle]

Would a capital raise mean the govt has to stump up some cash or face dilution? or can they block a raise with their current %? excuse my ignorance beagle

I think is highly likely that the Govt will want to maintain effective control so yes they will have to stump up with some serious cash. I also think its highly likely they'll have to underwrite the capital raise.

[Joh13]

I follow Cathay Pacific in Hong Kong and they are not expecting passenger levels to return to pre Covid levels until 2024 or later... Not looking good for Air NZ .

[jimdog31]

I think is highly likely that the Govt will want to maintain effective control so yes they will have to stump up with some serious cash. I also think its highly likely they'll have to underwrite the capital raise.

With your Air NZ hat on, wouldnt that make more sense than drawing down on the expensive loan? or is it a case of needing both the loan and a future cap raise? Or do they feel its better to have the Govt with a higher %.

[Beagle]

With your Air NZ hat on, wouldnt that make more sense than drawing down on the expensive loan? or is it a case of needing both the loan and a future cap raise? Or do they feel its better to have the Govt with a higher %.

A capital raise is something I was expecting today. I am sure its something that company representatives are telling Grant Robertson is needed.

[Waltzing]

its either a series of cap raises. not just one or one huge one of billions and or NATIONALISE the air line...

It actually worse than i expected but after selling out at 2 dollars i did not expect to trade this stock again for at least 3 years maybe 5. I also expect the price to go under .50 cents.

The government is simply holding a hankie over its eyes hoping that last whine of the turbines is simply their apple air pods ruffling a southerly gales around their ears as they leave the bunker , i mean bee hive.....

imagine the shock to all those share holders who bought in at 1 .34 and above... actually everyone who bought in since it near ditched in the tasman on the way back from the land of the red burning sand drought ridden desert continent...

ill be banned soon for not being kind enough...

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12359860 Paywalled article.

Long hard haul ahead...with ferocious headwinds.

[Scrunch]

A capital raise is something I was expecting today. I am sure its something that company representatives are telling Grant Robertson is needed.

Dido,
Page 24 of the slide pack says
"The New Zealand Government has recently reaffirmed its commitment to maintaining its majority shareholding in Air New Zealand, and the Board is engaging constructively with the Crown in its capital structure and funding discussions"

There were two obvious timings for the highly likely capital raise - with the results announcement and the day after the election. It will be very interesting when the briefing to the incoming minister (BIM's) are ultimately made public.

[Beagle]

That "loan" has some interesting terms and not just the widely criticized interest rate of a whopping 8-9% (when the Govt is borrowing money with Kiwi bonds at 0.25%), and the plain fact of the matter is the public are not privy to the full terms which include the right to convert the loan to equity. On what terms ? That would be interesting to know as a $900m loan converted at say 50 cps would involve the issue of 1.8 billion shares and radically dilute minority shareholders stakes who would then only own ~ 538m shares in a company with $2,922m issued shares, just an ~ 18% stake down from ~ 48%.

50 cents seems like a pretty provocative figure for me to pick doesn't it ! (Relax I didn't pluck it out of thin AIR...you see what I did there :) ) Thing is earlier today I estimated NTA will probably be down to 75 cents by the end of August and if this whole gnarly process is deferred until after the election accumulated losses by the end of October could see NTA down to a figure very close to what I've suggested so its by no means an outrageous possibility.

Speaking of outrageous...as disclosed in that paywalled article it turns out AIR have already paid the Govt a $5m commitment fee for that loan even before its drawn down ! Talk about flogging a dying horse or severely clipping a bird's wings. That's Savage ! (Also the surname of the E Tui Union leader who is also known to be equally Savage in his own ways)...gee I'm in good form with the pun's this late at night :)

The old cliché of "Its hard to soar with the Eagles when you're surrounded by Turkey's" for some strange reason springs very readily to mind.

Minority shareholders look like they're ostensibly on a one way financial trip to Mt Erebus. Maybe this post helps one or two wake up and smell the coffee and jump ship before its too late...NZX will provide the necessary parachute, (assuming they ever operate properly again).

[Cyclical]

That "loan" has some interesting terms and not just the widely criticized interest rate of a whopping 8-9% (when the Govt is borrowing money with Kiwi bonds at 0.25%), and the plain fact of the matter is the public are not privy to the full terms which include the right to convert the loan to equity. On what terms ? That would be interesting to know as a $900m loan converted at say 50 cps would involve the issue of 1.8 billion shares and radically dilute minority shareholders stakes who would then only own ~ 538m shares in a company with $2,922m issued shares, just an ~ 18% stake down from ~ 48%.

50 cents seems like a pretty provocative figure for me to pick doesn't it ! (Relax I didn't pluck it out of thin AIR...you see what I did there :) ) Thing is earlier today I estimated NTA will probably be down to 75 cents by the end of August and if this whole gnarly process is deferred until after the election accumulated losses by the end of October could see NTA down to a figure very close to what I've suggested so its by no means an outrageous possibility.

Speaking of outrageous...as disclosed in that paywalled article it turns out AIR have already paid the Govt a $5m commitment fee for that loan even before its drawn down ! Talk about flogging a dying horse or severely clipping a bird's wings. That's Savage ! (Also the surname of the E Tui Union leader who is also known to be equally Savage in his own ways)...gee I'm in good form with the pun's this late at night :)

The old cliché of "Its hard to soar with the Eagles when you're surrounded by Turkey's" for some strange reason springs very readily to mind.

Minority shareholders look like they're ostensibly on a one way financial trip to Mt Erebus. Maybe this post helps one or two wake up and smell the coffee and jump ship before its too late...NZX will provide the necessary parachute, (assuming they ever operate properly again).

LOL, Beagle, I had a snigger or two over that one. Savage indeed.

[nztx]

That "loan" has some interesting terms and not just the widely criticized interest rate of a whopping 8-9% (when the Govt is borrowing money with Kiwi bonds at 0.25%), and the plain fact of the matter is the public are not privy to the full terms which include the right to convert the loan to equity. On what terms ? That would be interesting to know as a $900m loan converted at say 50 cps would involve the issue of 1.8 billion shares and radically dilute minority shareholders stakes who would then only own ~ 538m shares in a company with $2,922m issued shares, just an ~ 18% stake down from ~ 48%.

50 cents seems like a pretty provocative figure for me to pick doesn't it ! (Relax I didn't pluck it out of thin AIR...you see what I did there :) ) Thing is earlier today I estimated NTA will probably be down to 75 cents by the end of August and if this whole gnarly process is deferred until after the election accumulated losses by the end of October could see NTA down to a figure very close to what I've suggested so its by no means an outrageous possibility.

Speaking of outrageous...as disclosed in that paywalled article it turns out AIR have already paid the Govt a $5m commitment fee for that loan even before its drawn down ! Talk about flogging a dying horse or severely clipping a bird's wings. That's Savage ! (Also the surname of the E Tui Union leader who is also known to be equally Savage in his own ways)...gee I'm in good form with the pun's this late at night :)

The old cliché of "Its hard to soar with the Eagles when you're surrounded by Turkey's" for some strange reason springs very readily to mind.

Minority shareholders look like they're ostensibly on a one way financial trip to Mt Erebus. Maybe this post helps one or two wake up and smell the coffee and jump ship before its too late...NZX will provide the necessary parachute, (assuming they ever operate properly again).



Goodness me .. for some strange reason I forewent getting a ticket on this next trip south
& didn't retain the prerequisite number of shares to qualify for the shafting session.
Possibly due to no AIR dividend in to pay for a ride on one of their 'Ere Bubbles of Debt
after Robinson has done a spot of Financial Wizardry & butchering of the job without a
clue of what was happening with it
Fair's fair after all .. A distant spectator I remain..
Unless of course complimentary tickets with a potential payday & gift allocation should land

[Raz]

That "loan" has some interesting terms and not just the widely criticized interest rate of a whopping 8-9% (when the Govt is borrowing money with Kiwi bonds at 0.25%), and the plain fact of the matter is the public are not privy to the full terms which include the right to convert the loan to equity. On what terms ? That would be interesting to know as a $900m loan converted at say 50 cps would involve the issue of 1.8 billion shares and radically dilute minority shareholders stakes who would then only own ~ 538m shares in a company with $2,922m issued shares, just an ~ 18% stake down from ~ 48%.

50 cents seems like a pretty provocative figure for me to pick doesn't it ! (Relax I didn't pluck it out of thin AIR...you see what I did there :) ) Thing is earlier today I estimated NTA will probably be down to 75 cents by the end of August and if this whole gnarly process is deferred until after the election accumulated losses by the end of October could see NTA down to a figure very close to what I've suggested so its by no means an outrageous possibility.

Speaking of outrageous...as disclosed in that paywalled article it turns out AIR have already paid the Govt a $5m commitment fee for that loan even before its drawn down ! Talk about flogging a dying horse or severely clipping a bird's wings. That's Savage ! (Also the surname of the E Tui Union leader who is also known to be equally Savage in his own ways)...gee I'm in good form with the pun's this late at night :)

The old cliché of "Its hard to soar with the Eagles when you're surrounded by Turkey's" for some strange reason springs very readily to mind.

Minority shareholders look like they're ostensibly on a one way financial trip to Mt Erebus. Maybe this post helps one or two wake up and smell the coffee and jump ship before its too late...NZX will provide the necessary parachute, (assuming they ever operate properly again).

nice write up, always the hazard with a majority shareholder, especially one with an agenda.

[Waltzing]

Actually this is barely a going concern. Its now a government SOE. No shareholder dividend for n years and add the whole 900 to the balance sheet as of today. Its a trading zombie, a new class of SOE share. But the market hasnt rerated it YET!!!

[tango]

Greg Foran said on RNZ that AIR have notified the government that they expect to draw down on the loan within days. He also talked about an agreement with the government being extended out to November but I am not sure on the specifics of that

[iceman]

Greg Foran said on RNZ that AIR have notified the government that they expect to draw down on the loan within days. He also talked about an agreement with the government being extended out to November but I am not sure on the specifics of that

One has to conclude from all of this that the Government is not willing to make a long term decision on AIR before the election. This is not good for AIR while it bleeds profusely. Time for a cross party decision from Labour & National to help AIR with a plan to get through this in the best interest of AIR and NZ.
Minority SH will suffer dramatically but that's been obvious for many months.

Good write up Beagle

[Waltzing]

its the 1980's with the stock market all over again. Buyer beware.... im afraid its a shorters dream or should be..regulation can only do so much.

[nevchev]

Cant believe people still wanting in on this!With a little patience they could get them at half the going rate,go figure

[tango]

AIR are being conservative but I mean seriously folks, Foran said they expect at least 3 years to return to fuller operations and that it may never return to pre-Covid operating. Why are people buying?

[Heimand]

AIR are being conservative but I mean seriously folks, Foran said they expect at least 3 years to return to fuller operations and that it may never return to pre-Covid operating. Why are people buying?

To support our beloved airline!

[Getty]

If Kiwis cant fly, do we need an airline?

[Waltzing]

"Cant believe people still wanting in on this!"

who ever is wanting "in" they are not the ones commenting here. is there another forum or group somewhere who have a different set of numbers to the ones most here seem to be using. Millions of dollars chasing millions of shares cant be wrong!!!!

[BlackPeter]

"Cant believe people still wanting in on this!"

who ever is wanting "in" they are not the ones commenting here. is there another forum or group somewhere who have a different set of numbers to the ones most here seem to be using. Millions of dollars chasing millions of shares cant be wrong!!!!

... that's what the Dutch people said during the tulip bubble as well :):

[Blue Skies]

This might go some way to partly explaining the over exhurberance with AIR SP.
Lots of new investors from those who found the sports & other forms of gambling outlets closed down due to the pandemic, plus easy online trading platforms, & social media, now getting into shares like airline stocks which had in the past a good record.

Disc, sold out completely of AIR earlier the year & put all that money into ATM

https://www.stuff.co.nz/business/opinion-analysis/300082862/has-easy-online-investing-created-a-ticking-time-bubble?fbclid=IwAR2VOYTaY0TaUnNrnrXLhlTLnk70fPem0d jo1QNJoUrz6-NGDSgmO1g_ack

[Waltzing]

"... that's what the Dutch people said during the tulip bubble as well"

and to think i still have a KML credit i think for this years flight from sweden down to amsterdam... wont get to see the tulips in bloom... ahh well prehaps in a few years time.

[Cyclical]

"Cant believe people still wanting in on this!"

who ever is wanting "in" they are not the ones commenting here. is there another forum or group somewhere who have a different set of numbers to the ones most here seem to be using. Millions of dollars chasing millions of shares cant be wrong!!!!

I got bored, so did a little TA on this and summed it up on one of those other groups somewhere...

AIR and CBD have a lot in common, both can get you high, and both can crash horribly.

[dreamcatcher]

"Air New Zealand's Domestic Business Is Well Positioned for a Quick Recovery; Shares Undervalued"

Morningstar 28th Aug ......TP $2.00

What is going on !!

[iceman]

The CEO on Q&A this morning: “I’m confident that in a matter of years we will be back to some level of normality with flying activity”

[Phant]

If a useable vaccine comes out, even one that has to be redone every year, what would these shares be worth.
Theres a term called " Revenge Buying" that I noticed recently. If that was applied to Intl travel, airline, holiday and cruise companies would go ballistic. Remember after the Spanish Flu the world recovered with the Roaring Twenties and life was good ( well for 8 years or so).

[Blue Skies]

The CEO on Q&A this morning: “I’m confident that in a matter of years we will be back to some level of normality with flying activity”


Yes just in time for the next pandemic scare. Hopefully the world will be better prepared for the next one.

[Paradox]

"Air New Zealand's Domestic Business Is Well Positioned for a Quick Recovery; Shares Undervalued"

Morningstar 28th Aug ......TP $2.00

What is going on !!

Lots of CBD going around....

[Waltzing]

If you believe the borders will be open this time next year with some sort of certificate for travel health. Imagine the new insurance you will have to pay to travel and the new cost structures. Then maybe after they have used most of the 900 at n% the cash burn will be what? Morning syndrome calculates according to what model release with what level of seats occupied? Oh please in this environment they will have to rebuild the airport , already planning in place and up the staffing requirements unless its all automated including an automated vaccine jab as you pass the nursing staff robot supplied by abbot labs....

cost to business travel 1/3 higher than before maybe even higher and then what is the model for profit again?

i dont think a MAV model like OCA is going to cut it all respects to MAV.

Its possible if its traveller beware and the traveller pays all costs for testing before boarding and on arrival, certificate stamped as a automated certificate like a passport that is recorded in the global passenger travel health certificate system. And all this for a only cold, imagine if it was really serious.

Are business travellers going to jump on a plane ? NOPE they will ZOOM it until face to face is actually required or VR it using a halo lens. Wait no one actually has a halo lens for business yet do they except a few people modelling the Mars Rovers at Nasa.

Airs share price like shooting ducks with a salt round at 500 feet distance.

Its one for the birds!

ill repent later if MS gets it right but i think it will just be luck!

Cant wait to see the F YTD Pn statements and then add the whole 900...to the L section at what rate% Is it interest only turning to equity squeezing the share holders and potentially making he government a nice little profit now and into the future.

Nationalise the almost flightless bird by stealth.

[Cyclical]

Are business travellers going to jump on a plane ? NOPE they will ZOOM it until face to face is actually required or VR it using a halo lens. Wait no one actually has a halo lens for business yet do they except a few people modelling the Mars Rovers at Nasa.

Had a play with a Trimble HoloLens helmet the other day...a customer has just acquired a couple due to the inability to get the right foreign expertise on the ground in NZ. I felt like a complete retard trying to drive it, but cool experience and I'm sure once you've got the hang it, very useful. You could probably buy a 777 with the money. But yes, a clear example of how the whole Covid thing is likely to change business travel for ever.

[nztx]

Had a play with a Trimble HoloLens helmet the other day...a customer has just acquired a couple due to the inability to get the right foreign expertise on the ground in NZ. I felt like a complete retard trying to drive it, but cool experience and I'm sure once you've got the hang it, very useful. You could probably buy a 777 with the money. But yes, a clear example of how the whole Covid thing is likely to change business travel for ever.

Good point there - Tourism & Hospitality are probably going to changed for a lot longer than some would like to think/hope
and that's not only domestic but globally

Sure, things may improve faster with an effective vaccine, but there are still going to be destinations which almost no-one
would dare venture to ..

[nztx]

If you believe the borders will be open this time next year with some sort of certificate for travel health. Imagine the new insurance you will have to pay to travel and the new cost structures. Then maybe after they have used most of the 900 at n% the cash burn will be what? Morning syndrome calculates according to what model release with what level of seats occupied? Oh please in this environment they will have to rebuild the airport , already planning in place and up the staffing requirements unless its all automated including an automated vaccine jab as you pass the nursing staff robot supplied by abbot labs....

cost to business travel 1/3 higher than before maybe even higher and then what is the model for profit again?

i dont think a MAV model like OCA is going to cut it all respects to MAV.

Its possible if its traveller beware and the traveller pays all costs for testing before boarding and on arrival, certificate stamped as a automated certificate like a passport that is recorded in the global passenger travel health certificate system. And all this for a only cold, imagine if it was really serious.

Are business travellers going to jump on a plane ? NOPE they will ZOOM it until face to face is actually required or VR it using a halo lens. Wait no one actually has a halo lens for business yet do they except a few people modelling the Mars Rovers at Nasa.

Airs share price like shooting ducks with a salt round at 500 feet distance.

Its one for the birds!

ill repent later if MS gets it right but i think it will just be luck!

Cant wait to see the F YTD Pn statements and then add the whole 900...to the L section at what rate% Is it interest only turning to equity squeezing the share holders and potentially making he government a nice little profit now and into the future.

Nationalise the almost flightless bird by stealth.


Govt adding their exorbitant usury to the AIR bubbles of debt, will only be a nice little profit to Govt if there is any way of recognising / extracting it. Anyone fancy their chances on seeing that now ? 2 years or 5 years down the track ?

It will be like their fancy borrowing bond programme - much much dent with many many large zero's ling long, but at the end of the day still a large infact huge dent which few would dare or be foolhardy enough to tamper with too much, for fear of disturbing the balance .. for what that may bring..

Many will know exactly what I'm referring to by that too ;)

Discl: I run away from AIR a few moons ago

[Marilyn Munroe]

ABC News speculates whether Virgin, underarm bowlers division, will be assert stripped by its new owner Bain Capital.

The article sees parallels with Bain's flying their US acquisition Toys R Us into the terrain.

https://www.abc.net.au/news/2020-08-27/virgin-australia-buyer-bain-may-saddle-airline-in-new-debts/12575776

Boop boop de do
Marilyn

[Brain]

ABC News speculates whether Virgin, underarm bowlers division, will be assert stripped by its new owner Bain Capital.

The article sees parallels with Bain's flying their US acquisition Toys R Us into the terrain.



https://www.abc.net.au/news/2020-08-27/virgin-australia-buyer-bain-may-saddle-airline-in-new-debts/12575776

Boop boop de do
Marilyn

I wonder who would be mad enough to lend an airline money to allow Bain to asset strip Virgin. Another problem would be to find a buyer for the aircraft at a sensible price for a lease back arrangement. Clearly Bain see the airline industry differently to me and probably most people who read and contribute to this thread.

[Waltzing]

ive been trying to get a halo lens for a while but i cant find a use for it ... no Mars Rover in the car port.

sorry Hololens...

big bulky looking thing

looking for a flying electric car, im surprised Musk man hasnt already got one in production.

with auckkkland back to level 2.5 i will back there most weeks , a flying car would be good lets see if the new expressway is indeed faster. should be.

"If Kiwis cant fly, do we need an airline?"

other air lines are still flying here and there are people travelling to europe back and forth, not many but i know several.


Stock today defying gravity ... if this keeps up it is a trading stock and i wonder if that is how the SA people see it. Or they think trans Tasman ski seasons are going to drive south island tourism and by next winter its a return to full trans tasman profits.

who here trades this on the Stochastic . 130-145.

[nevchev]

Directors now selling out.Could the lights go out all together on this one?

[Gregnz]

Directors now selling out.Could the lights go out all together on this one?

Those directors have left the company. Probably makes sense they are selling out while the share price is at a premium

[blackcap]

Directors now selling out.Could the lights go out all together on this one?

I can't see any directors selling out?

I do see 2 notices of previously employed senior management selling their shares. Possibly they need to pay the mortgage?

[nztx]

Hmmm well .. still @ 136 pennies to be in the queue for a future pounding & pummeling courtesy of the Beehive crew in near future

that surely gotta make the eyes water ;)

[Jaa]

Finally had time to read through the results properly and listen to the analyst call. Seems Beagle you were wrong about lots of things about Air NZ as usual.

1) Capital raise with results


I think the chances of a substantial capital raise at a deeply discounted price being announced contemporaneously with the full year result next week are quite high.

They still have $1.1b (incl the $900m loan) as at Aug 25 and said in the call they want to keep it above $700m. So that's about 4 months of runway left before they need to raise capital depending on how long L2 continues.

2) Cash burn


I think they will be doing very well indeed if they can reduce the cash burn to $100m a month in FY21.

This was achieved in the first month of FY21.

July: $85m
August: $108m (with only half a month of normal domestic flying)

They are now predicting cash burn of $65-$85m in a non social distancing month of which $25m in amorisation of the government loan and somewhere north of $25m for capital expenditure.

3) Write-downs


If the 8 777-200's are worth $400m at an average age of 14 years with engines almost written off and airframes around 78% written off, then it would seem likely 7 bigger and more modern 777-300's at an average age of only 8 years are worth quite substantially more, perhaps $600-800m and if they have to be written off in the FY21 accounts that's another massive hit.

FY20 Aircraft impairment charge ($338 million) for the 777-200s.

4) Flying Jetstar !! / More Competition


QAN are vastly better capitalised than AIR and their subsidiary Jetstar have lots of spare planes and crew and I would suggest there is a lot of former AIR customers who have been seriously disaffected by their appallingly customer service in recent months. Both now have bad customer service, why pay more with AIR ?

Jetstar have now up and stopped all flights twice. Pretty obvious that if you want reassurance that you will get to fly in these uncertain times or be receive a flight credit you should book with Air NZ.

As for competition, Air NZ are the only ones flying.

[Jaa]

I was struck by two things, how well they had brought costs down and how surprised they were by the domestic demand bounce back in L1. They were also intent on maintaining optionality to both scale up and scale down the business as required in case international demand bounced back just as fast.

This was a hallmark of Air NZ over the last 2 decades. e.g. While the 777-200s are written off they have not been sold and can be brought back if needed.

A few quotes, capacity is domestic capacity:


Cargo flights continue to exceed expectations, on a revenue basis now equates to ~30% of our previous longhaul business


Not only were we operating almost 70% of our pre-COVID-19 domestic capacity in July, we had average load factors of around 80%. Meaning not only were we flying, we were flying at or around optimum capacity.


in early August we were also starting to see the return of our corporate customers, at around 65% of pre-COVID-19 levels


So we – as of the lockdown we were planning to get to 80% - 90% of pre-COVID capacity quite quickly.

So before the COVID resurgence they had real momentum and you can see how much of a spanner in the works the current restrictions are. Their future is tied to NZ's. If we can get back to L1, then Air NZ should survive and revive ok even without much of an international business.

[Beagle]

Fill ya boots man, its a screaming bargain. What could possibly go wrong :D and how can you possibly lose :p

[Waltzing]

i would like to see the op stats and remember we just had lock down to the biggest population hub. If we had a solution like Taiwan then sure i think our lockdowns would have been a lot lighter but we seem to only have one setting and there is no certificate on boarding yet.

Not buying till it starts making a bottom... a net profit bottom.... i mean bottom of the losses that is...

When i see the plane pulling up i might start to trade it...

The lights on the head up are still flashing and the loud sound is the auto pull the nose up alert...

[blackcap]

i would like to see the op stats and remember we just had lock down to the biggest population hub. If we had a solution like Taiwan then sure i think our lockdowns would have been a lot lighter but we seem to only have one setting and there is no certificate on boarding yet.

Not buying till it starts making a bottom... a net profit bottom.... i mean bottom of the losses that is...

When i see the plane pulling up i might start to trade it...

The lights on the head up are still flashing and the loud sound is the auto pull the nose up alert...

The bit that gets me is that they are going to utilise the govt money. Now lets say they get a good way into that $900m. The interest bill alone will be $81m which is about half of a good year of profit down the drain.... Surely that would be a death knell?

[Beagle]

i would like to see the op stats and remember we just had lock down to the biggest population hub. If we had a solution like Taiwan then sure i think our lockdowns would have been a lot lighter but we seem to only have one setting and there is no certificate on boarding yet.

Not buying till it starts making a bottom... a net profit bottom.... i mean bottom of the losses that is...

When i see the plane pulling up i might start to trade it...

The lights on the head up are still flashing and the loud sound is the auto pull the nose up alert...

I think its clear enough if the Govt doesn't step in and make changes to their flight path what's going to happen is going to be very ugly.
https://www.bing.com/images/search?view=detailV2&ccid=YIewC9FZ&id=955ECEBF987DBA2568D0AE0CE99C5805F3F21416&thid=OIP.YIewC9FZrCuSUp-Qxyl1QwHaEK&mediaurl=https%3a%2f%2fi.ytimg.com%2fvi%2fODfMN170 lEw%2fmaxresdefault.jpg&exph=720&expw=1280&q=air+crashes+at+mt+erebus&simid=607998602780540941&ck=21B884E0A4DF79B01E336737215C48CB&selectedIndex=1&FORM=IRPRST&ajaxhist=0

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12360349

The only question regarding a major capital raise is when and on what terms. Anyone in fantasy land that this can be avoided without a "financial Mt Erebus" is kidding themselves.

[Waltzing]

""financial Mt Erebus" - oh dear .... yes this event is historical in deed and the effect on thousands of staff.


"Surely that would be a death knell?"

can we please get the technical terms correct please...

"Death dive!" or "flat spin!"

well its not quite that bad.

Please forgive my glib comments but i assure you we lost good money on this when the engines ran out of fuel and it started its glide path down...

Lucky we made the lost profits back on OCA and KMD and GMT and now we expect farther profits on ARG and others.

The profit was off OCA to start with.. like parachuting out of one plane and catching another flight out of the air port...

ZOOMing off into the skys again! Sorry about that anyone made 100 + on Zoom? Lucky people...you will have to pay the cullen tax though..and if your trading in that portfolio.

Yes big interest bill coming starting later this week. Big argument i suppose going on about cap raise and government probably thought it could just squeeze the balance sheet and avoid it.

[Beagle]

https://www.youtube.com/watch?v=LNmIbSre7Tw - Sums the situation up very well.

[Waltzing]

actually the whole world wide event deserves more along the lines of :

https://www.youtube.com/watch?v=V92OBNsQgxU

or will AIR NZ be victorious after a long bitter battle to come:

https://www.youtube.com/watch?v=jXbDQBsFFIE

[winner69]

Really sad news

Our mate Cam is leaving AIR .... but hanging around (on huge hourly rate no doubt) to give Greg hugs and cuddles when he's down in the dumps

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/359154/330002.pdf

[Raz]

Really sad news

Our mate Cam is leaving AIR .... but hanging around (on huge hourly rate no doubt) to give Greg hugs and cuddles when he's down in the dumps

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/359154/330002.pdf


Does the consulting gig include the bonus for being the face of the airline with the anti-refund strategy and other bad news...now time to move on..clean the decks ..after vesting dates met.

[Beagle]

Foran came across really well on TV3 breakfast show the other day. He's certainly a cool and calm leader and seems quite affable. He'll need all that charm and then some to navigate the very difficult flight path ahead. Cam probably knows the company is on a hiding to nothing and facing many years of losses so the prospect of any more bonus's in the foreseeable future is zero. Probably sick of being the janitor and trying to clean up the mess.

[Raz]

Foran came across really well on TV3 breakfast show the other day. He's certainly a cool and calm leader and seems quite affable. He'll need all that charm and then some to navigate the very difficult flight path ahead. Cam probably knows the company is on a hiding to nothing and facing many years of losses so the prospect of any more bonus's in the foreseeable future is zero. Probably sick of being the janitor and trying to clean up the mess.

Yes Foran does come across well which really begs the question why he did not front up prior when there was real momentum against AIR. Just too hard to explain away?

[biker]

Foran came across really well on TV3 breakfast show the other day. He's certainly a cool and calm leader and seems quite affable. He'll need all that charm and then some to navigate the very difficult flight path ahead. Cam probably knows the company is on a hiding to nothing and facing many years of losses so the prospect of any more bonus's in the foreseeable future is zero. Probably sick of being the janitor and trying to clean up the mess.

Very well put.

[Blue Skies]

Foran came across really well on TV3 breakfast show the other day. He's certainly a cool and calm leader and seems quite affable. He'll need all that charm and then some to navigate the very difficult flight path ahead. Cam probably knows the company is on a hiding to nothing and facing many years of losses so the prospect of any more bonus's in the foreseeable future is zero. Probably sick of being the janitor and trying to clean up the mess.


What, Cam not buying the 'Survive, Revive, Thrive' plan ?

[Raz]

What, Cam not buying the 'Survive, Revive, Thrive' plan ?

Look what Qantas and Virgin CEOs said yesterday, if that is the thinking at airlines currently..I think i would be moving on as well.

[Beagle]

Yes Foran does come across well which really begs the question why he did not front up prior when there was real momentum against AIR. Just too hard to explain away?

A very good question. I think AIR did themselves no favors letting Cam eventually try and clean up the public relations mess. Really that's the CEO's job to front foot a lot sooner than they did. For much of this year they have looked like a directionless bird with severely clipped wings flying around in turmoil contemporaneously hemorrhaging staff, money, credibility and reputation.

They face a very long, arduous and steep climb back against unprecedented headwinds to try and eventually attain some sort of equilibrium where they can comfortably attain a new cruising altitude which I suspect will be quite significantly lower than before.

I fail to see how this is an investable proposition.

[stoploss]

A very good question. I think AIR did themselves no favors letting Cam eventually try and clean up the public relations mess. Really that's the CEO's job to front foot a lot sooner than they did. For much of this year they have looked like a directionless bird with severely clipped wings flying around in turmoil contemporaneously hemorrhaging staff, money, credibility and reputation.

They face a very long, arduous and steep climb back against unprecedented headwinds to try and eventually attain some sort of equilibrium where they can comfortably attain a new cruising altitude which I suspect will be quite significantly lower than before.

I fail to see how this is an investable proposition.
Whilst I agree with your last line . I do feel a lot of the problems you describe "directionless bird" etc were foisted upon them by the Government making ( arguably they had to ) hasty decisions . A complete lack of business sense in the cabinet apart from the finance minister doesn't help.