AIR - Air NZ.

[Zaphod]

https://www.newshub.co.nz/home/money/2021/02/tourism-industry-doing-better-in-places-kiwis-can-drive-not-so-good-if-they-have-to-fly-report.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Saturday+27 +February+2021

No surprise that Kiwi's in general are more comfortable driving than flying and that's certainly how Mrs B and I feel too.

Although I'm not convinced that conclusion is based on an accurate assessment of the risks. Human behaviour is generally not rational when it comes to risk assessment.

[Beagle]

Although I'm not convinced that conclusion is based on an accurate assessment of the risks. Human behaviour is generally not rational when it comes to risk assessment.

I think there's a pretty good body of evidence now that sitting in a cramped narrow aluminum tube with dozens and dozens of complete strangers in very, very close proximity is more risky than travelling by private car within one's own family bubble, at least that's how I see it.

[Zaphod]

I think there's a pretty good body of evidence now that sitting in a cramped narrow aluminum tube with dozens and dozens of complete strangers in very, very close proximity is more risky than travelling by private car within one's own family bubble, at least that's how I see it.

Assuming domestic travel, perhaps if you narrowly focus on the danger of catching COVID-19, but even then the overall probability of catching COVID-19 is very low in NZ especially in well controlled environments. What we should be focusing on is the wider risk of death or serious injury, and motor vehicles have an overall higher risk of this.

Reading the news I see concerts and events with people in extremely close proximity for hours on end with no protection at all, yet we are collectively most concerned with public transport and aircraft.

[Blue Skies]

We very nearly booked a trip to Invercargill for this week to do a factory tour at Stabicraft boats and sea trial of that boat I posted a link for above. In hindsight I am very pleased Mrs B was very reluctant to fly.


Enjoyed that video, that's an impressive boat, ended up watching days 2 & 3 as well as the trip to Steward Island. Great part of NZ few get to experience.

[Beagle]

Assuming domestic travel, perhaps if you narrowly focus on the danger of catching COVID-19, but even then the overall probability of catching COVID-19 is very low in NZ especially in well controlled environments. What we should be focusing on is the wider risk of death or serious injury, and motor vehicles have an overall higher risk of this.

Reading the news I see concerts and events with people in extremely close proximity for hours on end with no protection at all, yet we are collectively most concerned with public transport and aircraft.

That's very true and to be honest probably a fact that's easily overlooked in the current Covid environment.

[Jaa]

Agree with much of your post Jaa but have a huge concern about how slow NZ is with vaccinations. While much of Europe and USA are aiming to have herd immunity through vaccinations by Q3 this year which will release a lot of the pent up travel demand, NZ has announced it will be 12 months from now that we have such herd immunity and borders will stay closed meanwhile. So none of the pent up demand will travel to NZ next summer potentially destroying a lot of tourist businesses and possibly whole towns like Queenstown, Akaroa, Franz Josef, Te Anau just to name a few that are really struggling

Pfizer and the other producers have a moral obligation to send the vaccines where they are most needed. A few months late, but this is finally starting to happen with COVAX and other deliveres. Outside of the MIQ workforce and doctors/nurses NZ is a very low priority.

Every country wants to be first, but we should be very thankful NZ is in a position of low priority and thus can afford to wait in relative freedom.

Nothing to do with the nonsense Black "just a flu" Peter spouted. Still as cynically and dangerously wrong as he was this time in 2020.

[Beagle]

https://www.nzherald.co.nz/nz/covid-19-coronavirus-person-who-flew-from-auckland-taken-to-queenstown-hospital/BNOGKZRXRFE3NVNMY2G2EFGZRY/

There will be some extremely worried passengers after this flight.

Whatever happened to stay home and get a test if you're not well. The level of irresponsibility by a small percentage of the population is deeply troubling.

[Greekwatchdog]

Wow one wonders why they were allowed to leave AKL in first place under level 3 lock down. I'm confused.

[James108]

Under level 3 you can rightly go home if you found yourself in Auckland but didn’t live there.

[Zaphod]

https://www.nzherald.co.nz/nz/covid-19-coronavirus-person-who-flew-from-auckland-taken-to-queenstown-hospital/BNOGKZRXRFE3NVNMY2G2EFGZRY/

There will be some extremely worried passengers after this flight.

Whatever happened to stay home and get a test if you're not well. The level of irresponsibility by a small percentage of the population is deeply troubling.

Tested negative apparently. Regardless of this, if the person was feeling that ill, then they had an obligation not to board in the first place.

[winner69]

Airline capacity ramping up

https://www.oag.com/blog/airline-capacity-increases-from-may

[BlackPeter]

Airline capacity ramping up

https://www.oag.com/blog/airline-capacity-increases-from-may

Well, they won't need this increased capacity for travel to NZ, this is for sure. No need for more planes when quarantine facilities and inhumane NZ First and only attitude in our gummit severely limits the trickle of travelers.

Remember: we don't want tourists - they better stay at home and just transfer the money. We don't want immigrants and prefer to not honor the visas we issued. While its still ok if urgently needed specialist staff arrives, their families better stays home.

No need for more capacity at all ...

[iceman]

Pfizer and the other producers have a moral obligation to send the vaccines where they are most needed. .

No such thing is happening Jaa. First in best dressed and NZ is way behind. It will be very costly

[iceman]

DELETED. Double post

[nztx]

Looks like a bit of bicycle pump this morning .. ;)

[Marilyn Munroe]

A new entrant has started domestic jet operations over the ditch.

Rex Airlines which previously operated turbo props on regional routes has leased four Boeing 737-800's from the new owners of Virgin(Under arm bowlers division) for flights SYD-MEL with others to follow.

Hopefully they will pick up Virgins DUD-BNE route when things go back to normal.

Boop boop de do
Marilyn

PS. With their long haul routes decimated Cullen Airlines may no longer find it beneath their dignity to offer Dunedin's residents direct flight across the ditch.

[Marilyn Munroe]

A new entrant has started domestic jet operations over the ditch.

Rex Airlines which previously operated turbo props on regional routes has leased four Boeing 737-800's from the new owners of Virgin(Under arm bowlers division) for flights SYD-MEL with others to follow.

Hopefully they will pick up Virgins DUD-BNE route when things go back to normal.

Boop boop de do
Marilyn

PS. With their long haul routes decimated Cullen Airlines may no longer find it beneath their dignity to offer Dunedin's residents direct flight across the ditch.

[Sideshow Bob]

PS. With their long haul routes decimated Cullen Airlines may no longer find it beneath their dignity to offer Dunedin's residents direct flight across the ditch.

Probably say it was a public service to ensure Dunedin residents get enough Vitamin D through winter.......;)

[THEONE]

https://www.stuff.co.nz/business/industries/124429820/17-billion-in-new-aircraft-costs-heres-how-air-nzs-fleet-will-look-as-travel-ramps-up

[Jaa]

A vaccinated populace will want to break free and travel.

UK destinations take steps to avoid tourist pandemonium (https://edition.cnn.com/travel/article/uk-destinations-tourism-return/index.html)

Look which other country will be fully vaccinated in 2021.

Covid-19 vaccine: Government has purchased enough for every New Zealander (https://www.rnz.co.nz/news/national/437907/covid-19-vaccine-government-has-purchased-enough-for-every-new-zealander)


He said consideration was also being given to how best to use vaccine doses that would not end up being needed in New Zealand.

"We are working on options for donating surplus doses across our wider portfolio to the Pacific and developing countries worldwide.

"Options could include delaying delivery to New Zealand, in order to free up supply for other countries in the short-term, or donating spare vaccines to other countries", Hipkins said.

[winner69]

Seems a bit weird - a AIR advisor wanting to discourage people flying to New Zealand

But we must save the planet sobeit


https://www.stuff.co.nz/environment/climate-news/300248291/raising-cost-of-flights-to-new-zealand-a-good-thing-says-air-nz-adviser

[winner69]

For plane buffs

short film about the restoration of RNZAF Mosquito NZ2384...done in NZ

Rolls Royce engines sound cool. ...prob better than RR engines of today

youtu.be/C0q5dahIuXU

https://www.youtube.com/watch?v=C0q5dahIuXU

[nztx]

Where are the Spectator seats to watch the bunnies hopping .. until the painful CR becomes
a real steal not to be missed .. ? ;)

[Habits]

Seems a bit weird - a AIR advisor wanting to discourage people flying to New Zealand

But we must save the planet sobeit


https://www.stuff.co.nz/environment/climate-news/300248291/raising-cost-of-flights-to-new-zealand-a-good-thing-says-air-nz-adviser

Could be a trojan horse ... start with slightly higher fares and then add a bit

[BlackPeter]

Amazing - SP up to $1.80. It appears punters just can't wait for the promised CR. Wonder which sort of CR premium they expect for this sick puppy?

But then - Share clarity DCF is still $1.85 (haven't really checked their underlying assumptions, but they must be amazing), while market screener analyst consensus is a still whooping $1.36 with a buy recommendation between Underperform and Sell.

I think market screener is still ways too optimistic :):

Anyway - what an amazing opportunity to still exit for anybody who sees the signs on the wall.

[Blue Skies]

How is current SP 180?
Can't just be based on small retail shareholders surely.
Curious how so many of us got this wrong & expected it to go as low as 40c or 50c which doesn't look like ever happening.

I sold half my holding at 303 after seeing how cyclical SP was & just before Covid hit, then after Covid hit on the way down ¼ at 160 & then thinking the co was un-investable remaining ¼ at 90 which hurt a bit.

[herbert240]

You didn't do too badly Blue Skies....my wifes investment adviser (Craigs) who she follows without question got her to sell at 83.5 cents! Don't know what they were bought at as she inherited her fathers investment portfolio but am guessing it was MUCH higher than

83.5 cents!

[LaserEyeKiwi]

Price rising on news about OZ travel bubble likely opening in April, which would return AirNZ operations back to a state of near normalcy. Tasman & Pacific Islands operations normally account for two thirds of non-domestic passenger numbers.

[LaserEyeKiwi]

what are everyones assumptions on the size of the capital raise? $500 million? $1 Billion?

[mikelee]

might even be close to 2 billion? basically as much as the market can swallow I suspect
I doubt the Oz bubble will make much difference as tourist will still largely stay away until they're vaccinated. Who wants to end up not being able to return home huh?

[Blue Skies]

Little profit in Trans Tasman routes anyway even when they do open up, and esp without Asian market feeding into them.
Just re reading an early June 2020 update to the market from AIR, saying based on hope of Trans Tasman & Pacific routes being open by September (2020) for business & leisure travellers a return to profit by August 2022.
Well that didn't happen & a bit over optimistic to say the least.

[macduffy]

Little profit in Trans Tasman routes anyway even when they do open up, and esp without Asian market feeding into them.
Just re reading an early June 2020 update to the market from AIR, saying based on hope of Trans Tasman & Pacific routes being open by September (2020) for business & leisure travellers a return to profit by August 2022.
Well that didn't happen & a bit over optimistic to say the least.

Does anyone have a feel for AIR's profitability split - domestic/trans Tasman/international pre Covid?
There's a lot of domestic traffic back in the skies and AIR's short term prospects may not be as dire as some are predicting.

Disc: Not holding but mildly interested.

[mikelee]

It was 1/3 for each sector pre-Covid I believe.

[winner69]

Here comes 2 bucks any day soon

Almost back to the good old days

[Blue Skies]

Here comes 2 bucks any day soon

Almost back to the good old days


Should have listened more to those new investors on sharesies, knew what they were talking about after all.

[Snow Leopard]

I am not convinced that it is anything but seriously overpriced.

[mikelee]

fingers crossed that bubble don't burst too easily

[winner69]

Wonder how beagles short is coming along.

[McPussPuss]

Wonder how beagles short is coming along.

Careful, that sounds libelous.

A winter trans Tasman 'boom' could be great timing for a cap raise.

[Arbroath]

I am not convinced that it is anything but seriously overpriced.

as they say opinions are like noses (everybody has got one) but I agree the valuation is ridiculous.

Right now the balance sheet is insolvent and they only exist at the behest of the NZ Government (no fault of Air NZ of course).
Valuing the equity at NZ$2.1b is bold as they will have to raise over NZ$1b, maybe NZ$1.5b and I wonder what price they will do that raising at? The amount of value destroyed through cash burn and mothballed planes is enormous but the equity is supposedly worth 2/3rds of the pre-virus levels when they were raking in cash, paying good dividends and had a decent balance sheet. I have never seen a valuation make less sense than this one but GLTAH. As a previous long term holder I watch with interest and we'll see what happens...

[Marilyn Munroe]

Virgin(underarm bowlers division) have released a public statement saying they will not cross the ditch until early November with the exception of limited flights into Queenstown from mid September.

The spreadsheet jockeys who now run Virgin probably sacked all the Kiwi aircrew and now need to do a lengthy cold start on New Zealand operations.

Wonder how long it takes Cullen Airlines and Queer and Nasty Airlines to recognize the duopoly situation this creates?

Could a sand state airline revive their Tasman leg aircrew to fly some of their many aircraft lying around to criss cross the ditch?

Boop boop de do
Marilyn

[James108]

I wonder what percentage of people will be using credit from cancelled flights in lieu of cash.

[Blue Skies]

Virgin(underarm bowlers division) have released a public statement saying they will not cross the ditch until early November with the exception of limited flights into Queenstown from mid September.

The spreadsheet jockeys who now run Virgin probably sacked all the Kiwi aircrew and now need to do a lengthy cold start on New Zealand operations.

Wonder how long it takes Cullen Airlines and Queer and Nasty Airlines to recognize the duopoly situation this creates?

Could a sand state airline revive their Tasman leg aircrew to fly some of their many aircraft lying around to criss cross the ditch?

Boop boop de do
Marilyn


With respect, you know you'd do yourself a favour if you dropped the (groan) attempts at humour, apart from sounding tone deaf in 2021, to repeatedly refer (presumably) to Qantas as queer & nasty is offensive & unfortunately even if unfounded makes you sound like a bigot.

With all the publicity around the seriousness of young peoples mental health in this country, it's time this was called out.

Apart from this, your posts always seem informed & interesting.

[nztx]

Are we still flapping away on one wing here .. with a glimmer of lick of hope in distant future ? ;)

that Govt Loan at a huge extortionary usance rate wont be disappearing anytime fast will it ? ;)

well not without a vast hit on the wallets of all the boys & girls out there .. ;)

[Baa_Baa]

Are we still flapping away on one wing here .. with a glimmer of lick of hope in distant future ? ;)

that Govt Loan at a huge extortionary usance rate wont be disappearing anytime fast will it ? ;)

well not without a vast hit on the wallets of all the boys & girls out there .. ;)

Although I don’t like your superficial style of posting which is unnecessary and obtuse imo, I guess you’re repeating others who have pointed out that AIR’s balance sheet is truely ****ed.

Despite that there is plenty of new money who seem oblivious and prepared to risk dilution into oblivion.

The game here is far from over and for investor imo it’s not looking good.

[Justin]

new investor believe they can hold for years and Air NZ will never bankrupt.

[pierre]

I wonder what percentage of people will be using credit from cancelled flights in lieu of cash.

Ive just booked a number of return flights to Brisbane for me and family members. I used up the last $1200 of my Air NZ credit, paid for the remaining $3k on my c/card and bought some domestic flights with Airpoints.
I have accommodation booked in Raro for August but haven't booked flights yet. Just need JA to stop politicking about the Pacific bubble so I can confirm travel - which I will also pay for in cash.

While there will be many people using credits to fly to Oz, Im sure Air NZ's bank account will be looking much healthier by Friday.

[Sideshow Bob]

While there will be many people using credits to fly to Oz, Im sure Air NZ's bank account will be looking much healthier by Friday.

They were quoted on the TV news as saying Wednesday was their biggest ever sales day on the Tasman ever.

Travel bubble: Air NZ announces record sales, says flights to Aussie 'almost sold out' (msn.com) (https://www.msn.com/en-nz/travel/news/travel-bubble-air-nz-announces-record-sales-says-flights-to-aussie-almost-sold-out/ar-BB1fncSh?ocid=msedgdhp)

Pent up demand......

Just a bugger that will be Aussies clogging up the southern skifields this winter!

[peat]

Are we still flapping away on one wing here .. with a glimmer of lick of hope in distant future ? ;)

that Govt Loan at a huge extortionary usance rate wont be disappearing anytime fast will it ? ;)

well not without a vast hit on the wallets of all the boys & girls out there .. ;)

thats how it seems to me , have sold more short into this rally.
(still a small position though - shorting is risky and I recognise that)

12412

[kyanar]

With respect, you know you'd do yourself a favour if you dropped the (groan) attempts at humour, apart from sounding tone deaf in 2021, to repeatedly refer (presumably) to Qantas as queer & nasty is offensive & unfortunately even if unfounded makes you sound like a bigot.

With all the publicity around the seriousness of young peoples mental health in this country, it's time this was called out.

Apart from this, your posts always seem informed & interesting.

On the unfounded part, bear in mind that the CEO of QANTAS is in fact a homosexual. "Marilyn" is in fact being bigoted and offensive, and it needs to stop. I'm glad someone finally publicly called it out.




Ive just booked a number of return flights to Brisbane for me and family members. I used up the last $1200 of my Air NZ credit, paid for the remaining $3k on my c/card and bought some domestic flights with Airpoints.
I have accommodation booked in Raro for August but haven't booked flights yet. Just need JA to stop politicking about the Pacific bubble so I can confirm travel - which I will also pay for in cash.

While there will be many people using credits to fly to Oz, Im sure Air NZ's bank account will be looking much healthier by Friday.

Agreed. While I wouldn't suggest that they will be anywhere near pre-pandemic levels just on this alone, this goes a long way toward shoring up the balances. AIR benefited massively from the first mover advantage, adding new flights even before the announcement (presume they knew well in advance, despite claims by NZ govt). QANTAS came late to the party, only just adding their flights overnight - and to top it all off allowing 100% of all carriage capacity to be paid in points for three days (presumably a clever attempt to burn down liabilities - AIR will be doing the same, encouraging Airpoints purchases to burn theirs down).

Given Australia is in talks to "bubble up" with Singapore, it is possible this could be the next destination to return to departure boards in NZ - of course this brings back the SIA competition.

[Snow Leopard]

...the CEO of QANTAS is in fact a homosexual.

Does not seem to get in the way of him doing a damn fine job of running an airline, though there will be those who disagree.

[LaserEyeKiwi]

Virgin(underarm bowlers division) have released a public statement saying they will not cross the ditch until early November with the exception of limited flights into Queenstown from mid September.

The spreadsheet jockeys who now run Virgin probably sacked all the Kiwi aircrew and now need to do a lengthy cold start on New Zealand operations.

Wonder how long it takes Cullen Airlines and Queer and Nasty Airlines to recognize the duopoly situation this creates?

Could a sand state airline revive their Tasman leg aircrew to fly some of their many aircraft lying around to criss cross the ditch?

Boop boop de do
Marilyn

Do we allow bigotry on this forum now? what an offensive post.

[kyanar]

Does not seem to get in the way of him doing a damn fine job of running an airline, though there will be those who disagree.

Most of those are staff and unions. Shareholders are generally quite happy - QANTAS has done a fantastic job of keeping their balance sheet as in check as possible over COVID, and keeping shareholder confidence (and share price!) up.

Makes me wonder if AIR would have fared better if Luxon were still in the pilot's seat.

[nztx]

Current SP looks a bit offensive .. ;)

[winner69]

How nice ...Grant sends Therese a letter

Is it a telling off? Or do as I say or else?

Maybe Theresevp will understand what it’s all about

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/370392/343886.pdf

[winner69]

And they now deferring capital raise to September

And Shylock reduced interest rates

[Arbroath]

How nice ...Grant sends Therese a letter

Is it a telling off? Or do as I say or else?

Maybe Theresevp will understand what it’s all about

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/370392/343886.pdf


reads very much like a power play of "you only exist because of us so do what we tell you or else"

also an underlying tone of socialism and not much mention of being a business needing to make a profit - that comes across as secondary to providing a bus service for everyone and their goods and being responsible for everything under the sun and could you please do all that in a capital efficient manner.

Foran must be loving it in socialist NZ! Compare AIR's position to Qantas

[winner69]

reads very much like a power play of "you only exist because of us so do what we tell you or else"

also an underlying tone of socialism and not much mention of being a business needing to make a profit - that comes across as secondary to providing a bus service for everyone and their goods and being responsible for everything under the sun and could you please do all that in a capital efficient manner.

Foran must be loving it in socialist NZ! Compare AIR's position to Qantas

...and reduce emissions while you at it.

[bull....]

delayed capital raise lol

lets make it even bigger so we can repay the govt facility from the capital raise

[James108]

Ive just booked a number of return flights to Brisbane for me and family members. I used up the last $1200 of my Air NZ credit, paid for the remaining $3k on my c/card and bought some domestic flights with Airpoints.
I have accommodation booked in Raro for August but haven't booked flights yet. Just need JA to stop politicking about the Pacific bubble so I can confirm travel - which I will also pay for in cash.

While there will be many people using credits to fly to Oz, Im sure Air NZ's bank account will be looking much healthier by Friday.

If you are representative of everyone (I know you won’t be, who knows what it is actually like) and one quarter of transtasman flights is paid for by credits rather than cash, their cash position will worsen by running the flights. Although obviously will see an immediate increase in cash as it is paid up front.

[winner69]

delayed capital raise lol

lets make it even bigger so we can repay the govt facility from the capital raise

Right on the ball there bull....

[bull....]

Right on the ball there bull....

and dont forget the accrued interest on the facility shareholders will have to pay as well. A very good loan this is for the govt at 9% wasnt it ... well done

[Rawz]

Why would anyone own this share at these prices? Am I missing something?

[Sideshow Bob]

Why would anyone own this share at these prices? Am I missing something?

Not, I don't think so. But I might be missing something also......

[Getty]

Its hot Air..

[FTG]

and dont forget the accrued interest on the facility shareholders will have to pay as well. A very good loan this is for the govt at 9% wasnt it ... well done

With the timing of the CR getting pushed out further, I get a sneaky feeling that behind the scenes the Govt is being more of a puppet master than it appears to the general populace. The GR letter is just part of the smoke & mirrors show - controlling the public narrative.. Nothing new or inspiring in the letter that the board wouldn't already be patently aware of.
If & when the CR does eventuate don't be surprised to see Govt elect to just convert the drawn down portion of the $ 900M into shares. In essence making the current arrangement a simple CN for the majority s/holder.

Meanwhile the underlying financial issue of a $40-55m per mth cash burn will continue; despite Pacific bubbles.

[mikelee]

fingers crossed that parts of Asia will open up next year too, so that the airline can stay afloat until US & Europe is ready for tourist again

[peat]

none of it really helps the company reach profitability.....

[LaserEyeKiwi]

you all seem to be missing the major good news in todays announcement - interest rate on government loan has been significantly reduced:


- New lower interest rate of 3.5% (down from 8%) for the first tranche of $1 Billion (increased from $600 million)
- New lower interest rate of 5% (down from 9%) for the second tranche of $500 million (increased from $300 million)

[peat]

its just reverted to market rates really tho... so yes a bit less usurious.

[FTG]

Ah yes, correct LaserEye. The plot thickens huh....

"here goes some more taxpayers money folks", no need to do a CR for now". "By the way, we will write an open letter and gently remind you of your position, remembering that our ideological position is that the national Airline actually should really be owned & controlled by the State anyway"

Under Labour is re-nationalizing AIR inevitable?

[kyanar]

you all seem to be missing the major good news in todays announcement - interest rate on government loan has been significantly reduced:


- New lower interest rate of 3.5% (down from 8%) for the first tranche of $1 Billion (increased from $600 million)
- New lower interest rate of 5% (down from 9%) for the second tranche of $500 million (increased from $300 million)

The government, given it has access to near infinite funds at ridiculously low rates through RBNZ's bond buying, must be making a tidy profit from gouging AIR NZ, which cannot refuse the loan from its major shareholder. One wonders if this thing is even legal. Surely negatively impacted shareholders would have grounds to file a shareholder lawsuit against the company for breach of fiduciary duty?

[bull....]

The government, given it has access to near infinite funds at ridiculously low rates through RBNZ's bond buying, must be making a tidy profit from gouging AIR NZ, which cannot refuse the loan from its major shareholder. One wonders if this thing is even legal. Surely negatively impacted shareholders would have grounds to file a shareholder lawsuit against the company for breach of fiduciary duty?

taken one from buffets playbook on giving loans to distressed companies at very high rates

[winner69]

The government, given it has access to near infinite funds at ridiculously low rates through RBNZ's bond buying, must be making a tidy profit from gouging AIR NZ, which cannot refuse the loan from its major shareholder. One wonders if this thing is even legal. Surely negatively impacted shareholders would have grounds to file a shareholder lawsuit against the company for breach of fiduciary duty?

All negotiated on an arms’ length basis and each party has been independently advised so all above board

Distressed companies always ‘pay’ top dollar (high interest rates) to stay afloat - and generally not in a good negotiating position.

Shareholders still have a company ....lucky aren’t they - they could have lost the lot without a bail out.

[traineeinvestor]

The assumption implicit in the government loan is that AIR could not raise the money elsewhere without paying higher interest rates or agreeing to more problematic covenants (especially debt servicing). If my assumption is correct, I don't have a problem with taking the loan on the terms they did. Other airlines have done similar deals and it's worth bearing in mind that if customers worry about an airline's financial ability to keep flying they won't part with their hard earned and heavily taxed cash.

That said, the blunt reality is I find it hard to see a way out of their current position without a significant capital raise unless the government opens the border to quarantine free travellers from other low risk countries such as Taiwan, Singapore and Hong Kong and does so very promptly (which I consider unlikely). Even that probably wouldn't be enough.

Disclosure: wouldn't touch it with a barge pole long enough to pole vault Cook Strait.

[Waltzing]

Certainly which shareholders would precede with a case against the Air Line as the GOVT holds such a large percentage.

who has the money to bring the case.

This situation is very very good for the tax payer and hopeless for traders.

Pitty as it would be a buy after the cap raise and surely a good bit of price discovery.

The government could keep this going for a while, perhaps years.

The dividend when it comes will be far reduced because the leveraged balance sheet to the government.

The govt hold the largest portion of share and could hold the largest portion of debt? Havnt run the numbers , some for Inspector Snoop to go over.

Govt loan repayments are from cap raise but that is surely just give the message that they want you to invest.

Roll out the WW1 add, Your Country Needs you buy AIR Cap Raise.

[Jaa]

Air NZ expects the Tasman to return to 80-90% of pre-COVID capacity. That will be enough for the airline to breakeven on a cash basis. If it goes to 150% of capacity as it easily could with no Virgin/Emirates/Others etc then expect the airline to be solidly profitable. Tasman fliers will also take domestic flights so expect domestic load factors to increase too. Also a bit more capacity for international arrivals.

Reduced more realistic interest rates help too and the air freight support scheme has been extended to October.

Looks like their plan of playing for time is working out well. Well done to management.

[Habits]

Why would anyone own this share at these prices? Am I missing something?

Its funny, Morningstar have AIR as undervalued along with ATM

[Zaphod]

Air NZ expects the Tasman to return to 80-90% of pre-COVID capacity. That will be enough for the airline to breakeven on a cash basis. If it goes to 150% of capacity as it easily could with no Virgin/Emirates/Others etc then expect the airline to be solidly profitable. Tasman fliers will also take domestic flights so expect domestic load factors to increase too. Also a bit more capacity for international arrivals.

That would also depend on how many times the tap is turned off due to an outbreak in one of the bubble countries/states. I think their projections are overly optimistic at this point, unless the projection horizon is a single day.

[Dlownz]

Fran O'Sullivan: Grant Robertson tightens Government's grip on Air New Zealand
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12434610
Again this is premium. But I've never owned Air as Ive always thought as overpriced and a tip I was once told was never own a airline.
But this kinda tells me the government want them to sacrifice profit for the good of the country. I don't see how air nz can proceed as overly profitable with the government putting there claws in

[Stranger_Danger]

Fran O'Sullivan: Grant Robertson tightens Government's grip on Air New Zealand
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12434610
Again this is premium. But I've never owned Air as Ive always thought as overpriced and a tip I was once told was never own a airline.
But this kinda tells me the government want them to sacrifice profit for the good of the country. I don't see how air nz can proceed as overly profitable with the government putting there claws in

Spoiler alert : They want the same for every other business, too. Just watch.

[Waltzing]

Never buy an air line until the dividend is so temping you jion Buffet at the buffet and then oh dear. Did not even throw up at the lose.

well o'sullivan says its a shocker... still after the cap raise it might be worth a trade.

[nztx]

Never buy an air line until the dividend is so temping you jion Buffet at the buffet and then oh dear. Did not even throw up at the lose.

well o'sullivan says its a shocker... still after the cap raise it might be worth a trade.



just the first 5 words are good enough I think .. ;)

[Vee Vee]

The government want something from the 1.5B sunk cost over and above already owning half.
People be shocked?
They should have bailed Air NZ into it's parts at Ansett bailout. A competitive free market or some such.
Right now AIR are a govt department, not something I aspire to own personally.

[Jaa]

That would also depend on how many times the tap is turned off due to an outbreak in one of the bubble countries/states. I think their projections are overly optimistic at this point, unless the projection horizon is a single day.

It's clearly a risk. I thought domestic demand would be affected by the Auckland outbreaks but they only had a short term effect.

There's a lot of pent up demand and flight credits to be used. Fantastic for separated families. So that will be the first few months, then if all goes well the general public will gain confidence. Lets hope it works out for everyone concerned.

[Blue Skies]

It's clearly a risk. I thought domestic demand would be affected by the Auckland outbreaks but they only had a short term effect.

There's a lot of pent up demand and flight credits to be used. Fantastic for separated families. So that will be the first few months, then if all goes well the general public will gain confidence. Lets hope it works out for everyone concerned.



As I mentioned over on FPH thread, there's growing awareness in the US ( & will happen everywhere) that the priority has been to vaccinate everyone who wants to get vaccinated & they will reach that goal sometime later this year, but that's not going to be enough to reach herd immunity.
The hard part comes when they have to try & vaccinate those resistant to vaccinations & the wait & see's. In other words, they're going to hit a vaccination wall before they're able to eradicate Covid.
Going to complicate international travel esp tourism without quarantine.
Vaccination passports?

[kyanar]

As I mentioned over on FPH thread, there's growing awareness in the US ( & will happen everywhere) that the priority has been to vaccinate everyone who wants to get vaccinated & they will reach that goal sometime later this year, but that's not going to be enough to reach herd immunity.
The hard part comes when they have to try & vaccinate those resistant to vaccinations & the wait & see's. In other words, they're going to hit a vaccination wall before they're able to eradicate Covid.
Going to complicate international travel esp tourism without quarantine.
Vaccination passports?

Vaccination Passports is going to be an issue, unless everyone gets on board. Unfortunately the Land of the Freedumbs (various United States state governments) have already put paid to that idea by making it illegal for the state to produce documentation that can be used to refuse service based on vaccination status, and/or for the state to discriminate against unvaccinated individuals, and/or for private businesses to discriminate against unvaccinated individuals.

Sure, NZ could require that all people boarding have proof of vaccination, but that would mean holding out a sign saying "Americans Need Not Apply".

[Zaphod]

Sure, NZ could require that all people boarding have proof of vaccination, but that would mean holding out a sign saying "Americans Need Not Apply".

The law doesn't stop US citizens from applying for a vaccination passport though, and if this programme was administered through the federal instead of state government, it's likely IMO that we would see some inbound tourism from savvy vaccinated US citizens as well as other countries embracing the passport system.

[Zaphod]

Grant Robertson's Air New Zealand letter puts airline board 'in invidious position': National

https://www.nzherald.co.nz/business/grant-robertsons-air-new-zealand-letter-puts-airline-board-in-invidious-position-national/HEZF34QAU6HH3FXORPNZ5UO7YA/

For those wondering, the letter suggests that the government wants to be involved in selecting Directors, that routes must be kept open, that the industrial policy designed to ensure that it is not disruptive, and generally expect much higher levels of engagement with the government in the operation of the company.

[Jaa]

As I mentioned over on FPH thread, there's growing awareness in the US ( & will happen everywhere) that the priority has been to vaccinate everyone who wants to get vaccinated & they will reach that goal sometime later this year, but that's not going to be enough to reach herd immunity.
The hard part comes when they have to try & vaccinate those resistant to vaccinations & the wait & see's. In other words, they're going to hit a vaccination wall before they're able to eradicate Covid.
Going to complicate international travel esp tourism without quarantine.
Vaccination passports?

Vaccination passports are a non-starter. Too easy to fake. See the investigation into COVID pre-departure tests out of India.

NZ has chosen to only vaccinate with the gold standard Pfizer/Bio n Tech vaccine, which is another fantastic decision by the Labour government. Not everyone in the world is so lucky. Lots of other vaccines with varying effective rates against various strains being taken by people. Even the head of the Chinese CDC has said as much. Better than nothing so long as they are safe but good enough for entry into NZ?

Doesn't really matter if the US runs out of people to vaccinate, plenty of other takers out there (and in NZ). Pfizer can only make 2B doses a year. And of course still no vaccines certified for children so that pool of potential infections will continue for a couple of years.

My guess is international travel will remain complicated and quarantine necessary for at least another year. Thus Aus-NZ travel will look increasingly attractive. Just as domestic NZ travel did over summer.

[Marilyn Munroe]

Grant Robertson's Air New Zealand letter puts airline board 'in invidious position': National

https://www.nzherald.co.nz/business/grant-robertsons-air-new-zealand-letter-puts-airline-board-in-invidious-position-national/HEZF34QAU6HH3FXORPNZ5UO7YA/

For those wondering, the letter suggests that the government wants to be involved in selecting Directors, that routes must be kept open, that the industrial policy designed to ensure that it is not disruptive, and generally expect much higher levels of engagement with the government in the operation of the company.

Does Grant Robertson want to create a sort of Ministry of Works which operates aircraft instead of bulldozers?

If the letter is an insight into his thinking he may be the salvation of AIR shareholders by doing a Cullen Kiwirail type deal and offering a buyout at many times the outfits worth.

Boop boop de do
Marilyn

PS. Mike Hoskings view,

https://www.newstalkzb.co.nz/on-air/mike-hosking-breakfast/video/mikes-minute-governments-socialist-ideology-threatens-air-new-zealands-success/

[LaserEyeKiwi]

Does Grant Robertson want to create a sort of Ministry of Works which operates aircraft instead of bulldozers?

If the letter is an insight into his thinking he may be the salvation of AIR shareholders by doing a Cullen Kiwirail type deal and offering a buyout at many times the outfits worth.

Boop boop de do
Marilyn

PS. Mike Hoskings view,

https://www.newstalkzb.co.nz/on-air/mike-hosking-breakfast/video/mikes-minute-governments-socialist-ideology-threatens-air-new-zealands-success/

lol at Mike Hosling, what a buffoon, so much inaccurate statements in his piece I was wondering if it was actually a comedic mockery of Hosking, but no its right there on the Newstalk website so must be legit him writing that.

[kyanar]

The law doesn't stop US citizens from applying for a vaccination passport though, and if this programme was administered through the federal instead of state government, it's likely IMO that we would see some inbound tourism from savvy vaccinated US citizens as well as other countries embracing the passport system.

The US Federal Government after outrage from the American Civil Liberties Union, the State of Florida, and the covidiots has outright ruled out a vaccination passport. They've unequivocally said the United States Government will not produce or support any such system. The State of Florida has outright banned providing any information to a vaccinated person that proves vaccination status (no, really).

There's also countries like Vietnam where a "tip" to your health worker will get you a negative PCR test without the hassle of actually bothering to test anything, you bet your rear that you'll be able to get "proof" of vaccination without all the hassle of, um, vaccinating.

[kyanar]

lol at Mike Hosling, what a buffoon, so much inaccurate statements in his piece I was wondering if it was actually a comedic mockery of Hosking, but no its right there on the Newstalk website so must be legit him writing that.

Does Mike realise that "the last time the government ran the airline" it didn't run it into the ground (pretty sure that was private sector ownership...), the government actually brought it back from the brink of failure and turned it into the rather profitable behemoth it was until COVID struck?

[LaserEyeKiwi]

The US Federal Government after outrage from the American Civil Liberties Union, the State of Florida, and the covidiots has outright ruled out a vaccination passport. They've unequivocally said the United States Government will not produce or support any such system. The State of Florida has outright banned providing any information to a vaccinated person that proves vaccination status (no, really).

There's also countries like Vietnam where a "tip" to your health worker will get you a negative PCR test without the hassle of actually bothering to test anything, you bet your rear that you'll be able to get "proof" of vaccination without all the hassle of, um, vaccinating.

we will simply amend out current pre-departure testing requirement with the addition of the global standardised vaccine passport as an option as well, and probably additional rapid screening on arrival from particular countries (sure there is not going to be a compulsory US vaccine passport, but that is entirely different to an optional one that US travellers would need to travel to other countries requiring it, in which case they would voluntarily get it to travel, not an issue really.)

[mikeybycrikey]

Hosking: “Government’s socialist ideology threaten’s Air NZ’s success”

Is this a joke? An airline so successful that it had to borrow from the government at 9%, when interest rates are basically 0%.

Maybe the government should follow the previous government’s example and just put someone on the board, instead of writing public letters. Way fewer articles about creeping socialism when it’s all behind closed doors.

[LaserEyeKiwi]

Does Mike realise that "the last time the government ran the airline" it didn't run it into the ground (pretty sure that was private sector ownership...), the government actually brought it back from the brink of failure and turned it into the rather profitable behemoth it was until COVID struck?

Mike is incapable of realising anything that conflicts with his deluded fox-news style world view.

[777]

I am not sure what planet you guys are on but Hosking is 100% correct.

[LaserEyeKiwi]

I am not sure what planet you guys are on but Hosking is 100% correct.

LOL. His piece is filled with literal factual errors. Pretty hard to be 100% correct when you have included verifiably incorrect nonsense.

[kyanar]

we will simply amend out current pre-departure testing requirement with the addition of the global standardised vaccine passport as an option as well, and probably additional rapid screening on arrival from particular countries (sure there is not going to be a compulsory US vaccine passport, but that is entirely different to an optional one that US travellers would need to travel to other countries requiring it, in which case they would voluntarily get it to travel, not an issue really.)

Remember, some states are making it illegal to provide evidence of vaccination to members of the public. How are you going to get an "optional vaccine passport" if your doctor is prohibited by law from saying you were vaccinated? A vaccine passport system just plain isn't going to work as long as nutters like Ron DeSantis have power, even optional ones.


I am not sure what planet you guys are on but Hosking is 100% correct.

I'm on Earth. If you think Hosking's diatribe is correct, I'd be questioning which you're on. There's a lot of reasons to raise questions about the actions of the government in relation to the various PSOEs (partially state owned enterprises) but Hosking's assertion that it's somehow to do with their "socialist agenda" is just typical right wing fearmongering.

[Marilyn Munroe]

I'm on Earth. If you think Hosking's diatribe is correct, I'd be questioning which you're on. There's a lot of reasons to raise questions about the actions of the government in relation to the various PSOEs (partially state owned enterprises) but Hosking's assertion that it's somehow to do with their "socialist agenda" is just typical right wing fearmongering.

You may be right, Hosking misunderstood Grant Robertson motives. An alternative criticism of the Minister of Finance if his wish is to become the wing commander of Air New Zealand is lack of street smarts.

He should have let it go bust and then rescued it for cents on the dollar and saved the taxpayer a bundle.

Boop boop de do
Marilyn

[kyanar]

You may be right, Hosking misunderstood Grant Robertson motives. An alternative criticism of the Minister of Finance if his wish is to become the wing commander of Air New Zealand is lack of street smarts.

He should have let it go bust and then rescued it for cents on the dollar and saved the taxpayer a bundle.

Boop boop de do
Marilyn

Can agree with that. While I'm not entirely convinced that Air NZ was so distressed that it would go under, if the goal was to try and push it under so the government could pick up the remaining shares they don't own (which I'd question the point of, since they already own a controlling stake and right now there's no real benefit to owning more) then this method was pretty terrible.

The Finance Minister did a pretty fantastic job, getting them to agree to take financing under the terms they did (terms that I'd argue would appall regulators if a private company did it) and I'd suggest if he really wanted to ensure value for money for the taxpayer, instead of converting repayments to shares the government should sit on the loan letting it accrue ludicrous interest, which Air NZ would have no choice really but to suspend dividends to the rest of us poor suckers to repay.

[Jaa]

Think everyone is reading too much into Grant's letter. I read it as related to the servicing of Saudi navy engines with a stern don't do it again.

https://www.stuff.co.nz/business/300224963/air-nz-apologises-after-revelations-it-helped-saudi-arabian-military

[nztx]

Think everyone is reading too much into Grant's letter. I read it as related to the servicing of Saudi navy engines with a stern don't do it again.

https://www.stuff.co.nz/business/300224963/air-nz-apologises-after-revelations-it-helped-saudi-arabian-military


Is servicing MP's Car Engines as lucrative to replace said activities ? ;)

[bull....]

according to qantas more aussies coming to nz than kiwis going to aus in there bookings and its all to do with the skiing period. tens of thousands booking they say

[Raz]

according to qantas more aussies coming to nz than kiwis going to aus in there bookings and its all to do with the skiing period. tens of thousands booking they say

very much so, involved in a couple of businesses in Queenstown, expecting 7000 visitors on Monday from forward booking data...

[winner69]

very much so, involved in a couple of businesses in Queenstown, expecting 7000 visitors on Monday from forward booking data...

So definitely not a place for kiwis to visit these days - but then apparently kiwis hate the place anyway

[Sideshow Bob]

Trans-Tasman bubble: Bookings drying up 'really quickly' as COVID-19 concerns linger (msn.com) (https://www.msn.com/en-nz/travel/news/trans-tasman-bubble-bookings-drying-up-really-quickly-as-covid-19-concerns-linger/ar-BB1fHm8M?ocid=msedgntp)

So a bit of a rush and bookings slowed down for the time being.

As for Queenstown, its a place you go for a weekend or a few days, spend a sh1t ton of money, have a great time and then get out again.

[winner69]

AIR and AIA seem to spending heaps on champagne, bands etc etc 'celebrating' this bubble

Don't waste shareholders money - just fly punters back and forth

[causecelebre]

AIR and AIA seem to spending heaps on champagne, bands etc etc 'celebrating' this bubble

Don't waste shareholders money - just fly punters back and forth

Yes. AIR management are touting a move from "survive" to "revive". Personally I think thats a bit premature. However, I suppose they are trying to spin it that way in order to try and prevent so much IP flying out the door in search market rates of pay. It must be hard for people to stay when they have taken a 30% haircut only to have even higher paid consultants come in to backfill the shortfall

[nztx]

Yes. AIR management are touting a move from "survive" to "revive". Personally I think thats a bit premature. However, I suppose they are trying to spin it that way in order to try and prevent so much IP flying out the door in search market rates of pay. It must be hard for people to stay when they have taken a 30% haircut only to have even higher paid consultants come in to backfill the shortfall


Another Govt Loan may be needed to keep all the fancy consultants sucked into the fusilage onboard in the land of honey .. ;)

gotta be a sucker or two somewhere out of all this that will be left quite a few bucks, an arm & leg down .. surely ? ;)

[Zaphod]

AIR and AIA seem to spending heaps on champagne, bands etc etc 'celebrating' this bubble

Don't waste shareholders money - just fly punters back and forth

This is the first relatively normal international service we've had for over a year. Let them have some sparking wine on the first day, it's something to celebrate.

[Zaphod]

Another Govt Loan may be needed to keep all the fancy consultants sucked into the fusilage onboard in the land of honey .. ;)

There's not many fancy consultants left, most of us went in the first tranche.

[winner69]

Hope the border worker at Auckland Airport testing positive doesn't pop the bubble

[Waltzing]

https://www.stuff.co.nz/business/opinion-analysis/124887183/red-zone-roulette--how-a-bubble-flight-to-sydney-took-a-surprising-twist

red zone roulette

[Watchful]

Some figures and stats of interest in here - https://www.reuters.com/article/worldNews/idUSKBN2C62WR

“Air New Zealand Ltd said of the 5,200 passengers booked on Monday, 59% were travelling to New Zealand.“

I’ve skipped over the more lopsided figure given earlier in the article as it seemed to apply to the week prior to the bubble, when more of the traffic is likely to be broader international returns, transiting in via Aus.

[peat]

we have had 3 lower highs now on the daily.
12449
discl short

[LaserEyeKiwi]

Hope the border worker at Auckland Airport testing positive doesn't pop the bubble

Border worker was fully vaccinated: per overseas data it is very rare for a fully vaccinated person to spread CV to others. chances of a community outbreak that would "pop the (travel) bubble" are very low.

[winner69]

March operating stats still paint a pretty miserable picture

Domestic passenger numbers picking up but still way less than year ago

Hope they doing plenty of price gouging and making a few extra bob than they might have

[winner69]

Forbar says travel bubble no bonanza for AIR

https://www.stuff.co.nz/business/300291298/transtasman-bubble-no-bonanza-for-air-new-zealand

[LaserEyeKiwi]

March operating stats still paint a pretty miserable picture

Domestic passenger numbers picking up but still way less than year ago

Hope they doing plenty of price gouging and making a few extra bob than they might have

Remember Auckland was in L3/L2 lockdown during 12 days of March, and rest of country was in L2 for first week. Australian travel bubble didn't open until a couple of weeks ago, so we won't get a good idea about how travel Bubble has benefitted until May figures are released.

[winner69]

interesting bit in that article - AIR current enterprise value was just 4 per cent below what it was on December 31, 2019, despite the current loss-making outlook and significant uncertainty over the recovery profile and size of the aviation market in future.

[peat]

interesting bit in that article - AIR current enterprise value was just 4 per cent below what it was on December 31, 2019, despite the current loss-making outlook and significant uncertainty over the recovery profile and size of the aviation market in future.

its very weird....




disc: short

[Blue Skies]

interesting bit in that article - AIR current enterprise value was just 4 per cent below what it was on December 31, 2019, despite the current loss-making outlook and significant uncertainty over the recovery profile and size of the aviation market in future.


Love to know how those 2 analysts worked that out!
December 2019 the future for air travel was booming, a year later AIR had half its planes mothballed & thousands of staff made redundant.
According to McKinsey report, worldwide airline revenues in 2020 were only 40% of what they were in 2019.

Will be interesting to see if Tokyo Olympics go ahead now, an indicator of how many hurdles the airline industry still faces.


https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/back-to-the-future-airline-sector-poised-for-change-post-covid-19#

[winner69]

Love to know how those 2 analysts worked that out!
December 2019 the future for air travel was booming, a year later AIR had half its planes mothballed & thousands of staff made redundant.
According to McKinsey report, worldwide airline revenues in 2020 were only 40% of what they were in 2019.

Will be interesting to see if Tokyo Olympics go ahead now, an indicator of how many hurdles the airline industry still faces.


https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/back-to-the-future-airline-sector-poised-for-change-post-covid-19#

Market cap down $1.3 billion ...net debt up up $1.1 billion (in round numbers) = enterprise value down 4%

[Sideshow Bob]

Market cap down $1.3 billion ...net debt up up $1.1 billion (in round numbers) = enterprise value down 4%

And then deducting the cash for the EV.

But net debt up $1.1 Billion....mind blown!! :scared:

[LaserEyeKiwi]

And then deducting the cash for the EV.

But net debt up $1.1 Billion....mind blown!! :scared:

You deduct net cash (cash less debt) from Market Cap to get to EV value. So if net cash is actually negative (because debt is higher than cash) then the EV value will be higher than Market Cap.

[winner69]

You deduct net cash (cash less debt) from Market Cap to get to EV value. So if net cash is actually negative (because debt is higher than cash) then the EV value will be higher than Market Cap.


Net Debt figure of 2.4 billion Dec 19 reported by AIR in their leverage calculations - reported 3.1 billion Dec 20 but I reckon it’s more like 3.5 billion now

I assume when AIR talk Net Debt they mean Debt less Cash

[Blue Skies]

Numbers (rounded) I was using were -

Dec 19 - Market Cap 3.2 billion + Net Debt 2.4 billion = EV 5.6 billion

Now Market Cap 1.9 billion + Net Debt est 3.5 billion = EV 5.4 billion. SO not that much less than it was at Dec 19.

Net Debt figure of 2.4 billion Dec 19 reported by AIR in their leverage calculations - reported 3.1 billion Dec 20 but I have guessed how much it's gone up since

I assume when AIR talk Net Debt they mean Debt less Cash\




Since it's EV is now only 4% less compared to Dec 2019 when SP was mostly above 288 & hit 298 on 29/12/19, surely the SP is way undervalued now at 170.
But that can't be, how does that work?

[winner69]

\




Since it's EV is now only 4% less compared to Dec 2019 when SP was mostly above 288 & hit 298 on 29/12/19, surely the SP is way undervalued now at 170.
But that can't be, how does that work?

As you know what it should be is really dependent on what returns can be made on that capital

At the moment 5.4 billion capital needed to generate a big loss .....’but that can’t be, how does that work’ ...quoting you

[winner69]

qantas heading to $2 billion loss this year

Don't think AIR that bad ...but ....

https://www.smh.com.au/business/companies/qantas-flags-2b-loss-pushes-for-international-travel-late-this-year-20210520-p57tgs.html

[Beagle]

Your old mate getting on her soap box telling the Govt to open up the border too https://flipboard.com/article/virgin-boss-calls-for-australia-to-open-the-international-borders/f-6037040aae%2Fco.uk
I'm already "over" hearing commercial aviation company CEO's with no medical expertise telling the Govt what to do with the border opening.
Thankfully Cindy doesn't like being told what to do so we're probably safe here for a while yet...
As for AIR, I see Forbar out with a note predicting we won't get back to pre-pandemic level's of travel until 2026 :eek2:
I don't mix philanthropic activities with investing so its going to be quite a while before my name will be back on the AIR share register...

[Getty]

I don't mix philanthropic activities with investing so its going to be quite a while before my name will be back on the AIR share register...[/QUOTE]

Quote of the week!

[Jaa]

Air NZ still has the best reputation of any NZ business. Incredible effort considering the stresses of the last year and a bit

Puts into perspective the bleating too often heard here doesn't it?

https://i.stuff.co.nz/business/industries/125189806/heres-nzs-business-with-the-best-reputation

[Zaphod]

Air NZ still has the best reputation of any NZ business. Incredible effort considering the stresses of the last year and a bit

Puts into perspective the bleating too often heard here doesn't it?

https://i.stuff.co.nz/business/industries/125189806/heres-nzs-business-with-the-best-reputation

IMO, the bleating here seems to revolve around financial performance, while the airline with reputation problems (in some cases unjustifiably so) is Jetstar.

[porkandpuha]

I don't understand the logic by the NZ government to subsidise flights by overseas airlines through the MoT via the IAFC scheme, while undercutting themselves as a majority owner in Air NZ?

It was announced today that a fortnightly Korean Airline flight would be financially supported with a flight to Seoul, meanwhile Air New Zealand will run its own flights Auckland to Seoul. Also in the announcement was China Airlines twice per week into Taipei with connectivity into Shanghai, meanwhile Air New Zealand operates flights into both Taipei and Shanghai. Also Tasman Air getting support into Sydney while Air NZ has their own sector.

Some of these overseas carriers also get assistance from their own governments/owners meaning they come into the NZ market and undercut our own national carrier with cheaper rates. The government is effectively funding their competitors and ruining their own business. Strange.

[Rossimarnz]

I don't understand the logic by the NZ government to subsidise flights by overseas airlines through the MoT via the IAFC scheme, while undercutting themselves as a majority owner in Air NZ?

It was announced today that a fortnightly Korean Airline flight would be financially supported with a flight to Seoul, meanwhile Air New Zealand will run its own flights Auckland to Seoul. Also in the announcement was China Airlines twice per week into Taipei with connectivity into Shanghai, meanwhile Air New Zealand operates flights into both Taipei and Shanghai. Also Tasman Air getting support into Sydney while Air NZ has their own sector.

Some of these overseas carriers also get assistance from their own governments/owners meaning they come into the NZ market and undercut our own national carrier with cheaper rates. The government is effectively funding their competitors and ruining their own business. Strange.

Porkandpuha your argument is makes a lot of sense. What I suspect is in play behind the scene is New Zealand govt choosing to stick rigidly to World Trade Organisation principals whereby we don't subsidise domestic firms. I know other countries breach these principals regularly but many branches of NZ govt choose to be very pristine about WTO stuff so that we can push the free trade barrow in market access negotiations. I am not saying that it is right but I have seen that same argument made in other WTO type situations by govt agencies.

[Jaa]

Porkandpuha your argument is makes a lot of sense. What I suspect is in play behind the scene is New Zealand govt choosing to stick rigidly to World Trade Organisation principals whereby we don't subsidise domestic firms. I know other countries breach these principals regularly but many branches of NZ govt choose to be very pristine about WTO stuff so that we can push the free trade barrow in market access negotiations. I am not saying that it is right but I have seen that same argument made in other WTO type situations by govt agencies.

If you are saying NZ is naïve, then I agree.

[winner69]

The climate commission wants electric planes on regional routes in NZ by 2030.

That’ll be a great deal for AIR ...and large capex no doubt.

[777]

And then they fell out of bed and woke up.

[Benny1]

The climate commission wants electric planes on regional routes in NZ by 2030.

That’ll be a great deal for AIR ...and large capex no doubt.
Electric planes by 2030?
Just proves this Climate Change Commision lot are living in cloud Cuckoo land...
For these aircraft to be ready and certified for passenger service by then the prototypes should have already been produced and in a flight testing program...
Where are they?
Who's producing them?
Fanciful stuff without any facts to back up these so called goals..

[iceman]

Electric planes by 2030?
Just proves this Climate Change Commision lot are living in cloud Cuckoo land...
For these aircraft to be ready and certified for passenger service by then the prototypes should have already been produced and in a flight testing program...
Where are they?
Who's producing them?
Fanciful stuff without any facts to back up these so called goals..

Not wrong Benny1. A complete farce. Sadly.

[Snow Leopard]

Electric planes by 2030?
Just proves this Climate Change Commision lot are living in cloud Cuckoo land...
For these aircraft to be ready and certified for passenger service by then the prototypes should have already been produced and in a flight testing program...
Where are they?
Who's producing them?
Fanciful stuff without any facts to back up these so called goals..

This is the trouble with modern NZ, so much negativity, giving up first and not even trying.

Where is the old No8 wire can do attitude?

A couple of weeks work in the in the shed with an old washing machine motor, the UTE battery and a busted hang-glider and we'll be flying Auckland to Invercargill ....

.... and back!


Let's give it our best shot.

[kiora]

They are already here
By 2030 so many kiwis embarrassed to fly AirNZ just need small planes?
https://www.electricair.nz/
https://www.nzherald.co.nz/travel/astonishing-electric-plane-gives-160km-on-an-hour-and-8-charge/ITGD4XUY27WVT4BIMXM42FDOSQ/

Ok they can make bigger ones
https://www.soundsair.com/2020/10/Sounds-Air-Aims-to-Offer-First-Regional-Zero-Emission-Flights/
There was something written re collaboration with a US of A Co a few years ago but I can't find the reference

[Waltzing]

someone (DIC SNOOP) needs to come on and estimate the demand on the grid of hundreds of thousands of flying electric cars at peak times of the day...

is there enough generation capacity to handle the load.

Or are they solar powered?

or has every house and garage with an electric plane i mean car in it using solar panels?

and can these flying planes cars fit in your standard car port and garage,

and since some auckland streets cant handle car parked how on earth is the average person supposed to park their plane , i mean car in the street.

i just dont see the jetsons coming to a town or city anytime soon or in the future.

i dont think AIR is going to worry about this kind of competition for few more 10 of decades.

Some streets and town planning in Zealandia have been laid down for a century or more as some of the houses..

It just doesnt look like it will fly..

well the family version wont fit in the garage easily but this might...

https://www.jetsonaero.com/

not a winter flyer or rainy day and no where to put the shopping bags..

still cant see it beating a bike with a basket in europe.

[nztx]

This is the trouble with modern NZ, so much negativity, giving up first and not even trying.

Where is the old No8 wire can do attitude?

A couple of weeks work in the in the shed with an old washing machine motor, the UTE battery and a busted hang-glider and we'll be flying Auckland to Invercargill ....

.... and back!


Let's give it our best shot.

The No8 wire in many instances gets firmly entangled in the rafts of hefty labour costs
and other suffocating bureaucracy multiplying at an alarming rate around victims,
surrounded by the myriad of weird & wonderful H&S nonsense policed by a tribe
of bureaucrats so experienced, one has to wonder at times if they've ever spent
much time on any real workplace floor possess any creative bones .. ;)

Get it badly wrong and the bus tickets dished out by the learned judiciary in many
an instance for infringement can be near terminal to many smaller enterprises .. ;)

End result = much of the creativity moving towards wider scale production migrates
off to more industrial friendly & lower cost destinations with less excessively overbearing
bureaucracy abounding here ..

and we wonder why what we have been known for in NZ previously seemingly is looking like
it will be headed towards extinction..


Anyone looked at recent fortunes & ownership of Pacific Aerospace in the Waikato ?

If it's any good to absolutely marvellous - it gets migrated nuts bolts & washers intact off overseas,
gets bought out and / or becomes destined an add-on in some foreign company or suffers some other
demise like roughly similar technology or process elsewhere taking over in the same space & eventually
overwhelming the limited local operations on our shores..

Such is today's competitive, if not greedy world stage.. with so many imitation bureaucrats running
around pretending they know best .. usually only finding new ways to clip the ticket delivering further
hindrances and excuses to extract even more levies taxes & fees from the job ;)

not to forget another band of backwards thinking political causes not stopping to think which way
prospect of a meaningful forward direction is ..

Case proven yet ? ;)

[kiora]

I hear what you are saying NZTX.
Try to build a house that is a bit out of the ordinary it is a maize of obstacles to negotiate
Maybe this one will get of the ground though
https://www.stuff.co.nz/business/industries/125162622/nz-company-syos-aerospace-develops-heavy-lifting-pilotless-helicopter-drone

[BlackPeter]

This is the trouble with modern NZ, so much negativity, giving up first and not even trying.

Where is the old No8 wire can do attitude?

A couple of weeks work in the in the shed with an old washing machine motor, the UTE battery and a busted hang-glider and we'll be flying Auckland to Invercargill ....

.... and back!


Let's give it our best shot.

Like it ... and lets face it - as we all know - Kiwi mentality is even an impediment to fly.

Most other birds can do it though and they don't even need batteries - they are just running on biofuel ...

[Sideshow Bob]

Still all a bit quiet on their capital raise......

[newtrader]

Still all a bit quiet on their capital raise......

Any thoughts on the potential structure of the capital raise? Rights per share? Dollar amounts?

[LaserEyeKiwi]

Electric planes by 2030?
Just proves this Climate Change Commision lot are living in cloud Cuckoo land...
For these aircraft to be ready and certified for passenger service by then the prototypes should have already been produced and in a flight testing program...
Where are they?
Who's producing them?
Fanciful stuff without any facts to back up these so called goals..

uhh - there are plenty of electric planes already in various stages of development and testing, some of which are already shipping to customers.

in terms of New Zealand operators, Sounds air already has EV planes carrying 19 passengers on order for its short haul routes between the top of the South Island and lower north island routes.

Boeing & Airbus already have Large EV airliner designs, and are also testing hybrid models where 1-2 engines on existing models are replaced with electric engines. Also new operators like Wright Aerospace are working on a 800km range all EV airliner.

[Dassets]

Can you please name these aircraft that are being delivered. State range and payload. Don't forget the 45 min reserve for commercial operations beyond the alternate airport. Are they type certified or experimental? More than 4 seats?

BTW on order for a design spec means nothing. Go ask the Eclipse 500 customers who lodged orders.

Airbus has dropped its project. Maybe another one could come. The C208eecteic demo can carry 3 or 4 pax 100miles not nm, no baggage. Pity about the other 16 seats and no bags and no reserve.

Argument that it can be short range is silly. An airport every 50 miles? Seriously interested in your info.

[Waltzing]

well perhaps each town will have new types of car parks with a lift that takes you air hover car plane and lifts you up to the take off pad on the roof and then stores your helli plane car...

car parks are rebuilt with automated car plane parks and lift off landing roof..

[Raz]

https://www.stuff.co.nz/travel/news/125403221/business-travel-is-not-coming-back-says-virgin-boss#comments

Is this reported right or fuzzy logic? I believed business class margin provided the underlying profitability/cost recovery of a international flight historically, therefore it also subsidised the price other seats could be offered on a plane. So if their demand falls for business class then to maintain a profitable flight the margin needs to recovered over the others seats...

Still 2-3 years away a new normal...if that is the industry expectation, may explain the delay on capital raising...

[Zaphod]

uhh - there are plenty of electric planes already in various stages of development and testing, some of which are already shipping to customers.

in terms of New Zealand operators, Sounds air already has EV planes carrying 19 passengers on order for its short haul routes between the top of the South Island and lower north island routes.



These short-haul planes have an initial delivery date of 2026 (if I remember correctly), and that's is assuming all goes to plan. No word on the infrastructure upgrades required at the airport (charging, fire protection etc.) With only 19 seats and with a no doubt high capital cost compared to conventional aircraft, it will be interesting to see what price point fares will need to remain profitable.

IMO the timeline of 2030 is still too tight, especially when we're competing with the rest of the world for these types of resources.

[Zaphod]

https://www.stuff.co.nz/travel/news/125403221/business-travel-is-not-coming-back-says-virgin-boss#comments

Is this reported right or fuzzy logic? I believed business class margin provided the underlying profitability/cost recovery of a international flight historically, therefore it also subsidised the price other seats could be offered on a plane. So if their demand falls for business class then to maintain a profitable flight the margin needs to recovered over the others seats...

Still 2-3 years away a new normal...if that is the industry expectation, may explain the delay on capital raising...

Carbon offsets and biofuel will certainly push all classes of fares upward. Perhaps we're going back to the golden days of travel, but this time it's the 1960's.

[Tomtom]

I notice airline demand is surging North America and the UK where the vaccine role-out is 6(ish) months ahead of us. Any opportunities for AIR in the interim?

Foreign airlines betting big on travel recovery:
https://www.reuters.com/business/aerospace-defense/united-airlines-talks-buy-least-100-boeing-737-max-jets-bloomberg-news-2021-06-10/

[Maxtrade]

Still all a bit quiet on their capital raise......

I have been thinking the something. Haven't heard any updates on the capital raise. Had previously read they have put it on hold until September?

Anybody know anything more about this?

Would it be fair to assume the SP is stuck around the 1.6 range as shareholders and investors are waiting to see what the offer is for the Capital Raise? Any guess's?

[Beagle]

Fair value on AIR, in my opinion, is well under $1. In my opinion the only investment strategy worth pursuing with AIR at present is to avoid the share or short it.

[Maxtrade]

Fair value on AIR, in my opinion, is well under $1. In my opinion the only investment strategy worth pursuing with AIR at present is to avoid the share or short it.

My guess is that AirNZ will allocate Capital Raise to be set at ~1.60. SP will likely be in the 1.75 to 1.85 range by then. I wish we had loaded up the portfolio more back when SP dipped and was only $1 !

[mikelee]

share holders might be surprised by how much wages have gone up in the 2nd half of FY21 after the initial dip :scared:

[Beagle]

My guess is that AirNZ will allocate Capital Raise to be set at ~1.60. SP will likely be in the 1.75 to 1.85 range by then. I wish we had loaded up the portfolio more back when SP dipped and was only $1 !

NTA as at 31 December was 97 cents per share and I would think its materially lower by the time they try and raise capital, perhaps about 80 cents I think they will try and raise capital at somewhere very close to NTA, maybe cheeky enough to try at $1 and play the fiddle that they're in recovery mode and will soon be thriving.

I see no viability to their business model for several years so as mentioned before as I don;t mix investment activities with philanthropic activities I have no interest in participating.

I only post to bring some realism to this thread. Disc: I have been in and out as an investor in AIR for more than 30 years. There are times to be an investor in AIR and there are times to stay out. In my opinion one is best to avoid any investment in AIR for the foreseeable future.

[Dassets]

Beagle, absolutely agree. I have been in and out of this for circa 30 years. At one point a fund I was investment manager for was one of the larger insti holders. IMO AIR's go forward business model is unknown. They will need a freight component but how is an issue.The govt can't keep propping up it up when the a/c are not freight aircraft but mixed revenue. There is no chance of conversion or new buys or old. So dilemma because if NZ loses or seriously degrades that freight capability then NZ exporters are in Big Trouble in Little China territory. Long haul, imo, is effectively gone to any meaningful level. Short haul has lesser but no means insignificant challenges but hard to see it anywhere near 2019 levels for at least another 5 years.

The directors(and auditors) have to sign the accounts of soon as a going concern I presume. Problem is there is no business clarity at all. It is losing money even with subsidies. At some point the WTO may be pressured over the subsidies because long term they are illegal.I wonder how far AIR/GONZ can push it.

At $1.00 there will be a big shortfall and Govt underwrite will be called. At 50 was where I pitched it 12 months ago but maybe 75 is right given the Labour Govt approach to life. They would like to buy all of it actually but with the lack of money bailing out AIR or paying nurses is a no brainer.

[causecelebre]

Agree Beagle. AIR sure don't paint a picture of how much IP is walking out the door to jobs paying market rate. Backfilling roles using consultants at 2x or 3x rate of incumbent staff rather than paying said staff is not a good way to retain talent

[Marilyn Munroe]

They will need a freight component but how is an issue.The govt can't keep propping up it up when the a/c are not freight aircraft but mixed revenue. There is no chance of conversion or new buys or old.


An old coal burning Boeing 757 freighter with a Greek tail registration crossed the Tasman last night.

I am puzzled why Cullen Airlines don't convert some of their 777's sitting out in the paddock into freighters.

Boop boop de do
Marilyn

[Dassets]

1. Extremely expensive and time consuming.
2. Try getting a slot. I guess it will be 2025 first availability for slot.

[winner69]

Loss about $450m this year and about the same for last year

No mention of buying electric planes for domestic routes

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/374146/348529.pdf

[BlackPeter]

Loss about $450m this year and about the same for last year

No mention of buying electric planes for domestic routes

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/374146/348529.pdf

Well, they certainly are exceeding analysts expectations - the losses, I mean :): Probably results in share prices to move higher - BIG is BEAUTIFUL ...

[Snow Leopard]

I liked the bit about them being EBITDA positive.

Defer to survive, probably won't have Beagle going on about how young the fleet is for quiet a few years.

[Dassets]

NTA goes to zero depending on how the tax treatment flows through to NTA.

[peat]

giving staff shares before a rights issue !!! lol

i ran the very first Air New Zealand Staff Share scheme when Brierley owned most of it - beck in the early 90's. The staff paid about $2.14 per share from memory. Obviously a very different capital base now

ok so not issued until 4th quarter but this is crazy. they're losing a billion dollars in the next few years and they give staff a bonus

[Benny1]

An old coal burning Boeing 757 freighter with a Greek tail registration crossed the Tasman last night.

I am puzzled why Cullen Airlines don't convert some of their 777's sitting out in the paddock into freighters.

Boop boop de do
Marilyn
That aircraft is owned by airwork.They have contracts with various organisations including Fed ex and DHL etc...they also fly a 737 to Melbourne several times a week, as well as 737's around NZ and for Toll in Aussie.
Air's 777-200s are gone won't return...they will ethier be sold scrapped or returned to the lesser.
777-300s would say there is significant uncertainty over the future of these aircraft too.
Have heard through the grapevine that they have been quite impressed with the freight carrying capacity and performance of the 787's.

[Beagle]

NTA goes to zero depending on how the tax treatment flows through to NTA.

That's how I see it too. I think they will try and carry the tax losses as a credit and try and make the balance sheet look less stretched. Tax losses are of course only worth something as an offset against future taxable profits and I think its anyone's guess when they might be profitable again. FY23 is probably another sizeable loss would be my guess.

I think its crystal clear the capital raise is just a donation or lets call it a tax payment to the Govt to help maintain critical transport infrastructure. Sheet the cost back where it belongs I reckon. The Govt is still collecting hundreds of millions per annum in PAYE and GST from AIR so let them fund the airline from that !

Pretty easy to find more worthy cases for one's philanthropic activities than AIR.

Throw a dart at the share market page from the Herald to find a better investment, you can't miss !

[stoploss]

That's how I see it too. I think they will try and carry the tax losses as a credit and try and make the balance sheet look less stretched. Tax losses are of course only worth something as an offset against future taxable profits and I think its anyone's guess when they might be profitable again. FY23 is probably another sizeable loss would be my guess.

I think its crystal clear the capital raise is just a donation or lets call it a tax payment to the Govt to help maintain critical transport infrastructure. Sheet the cost back where it belongs I reckon. The Govt is still collecting hundreds of millions per annum in PAYE and GST from AIR so let them fund the airline from that !

Pretty easy to find more worthy cases for one's philanthropic activities than AIR.

Beagle wasn't the PAYE deferred ? Can anyone do that ?

[Beagle]

Beagle wasn't the PAYE deferred ? Can anyone do that ?

I'm not aware of that mate, (not following closely anymore as its not worth my time). I would think it could only be deferred with Govt agreement. If they're doing that they really are incredibly desperate.

Giving staff shares just before a capital raise is a bit of a laugh...talk about a hospital pass !

I think where this is going is all this information is a warm up (stating the obvious, please forgive me), for the capital raise which nobody will want to underwrite so the Govt will have too. They'll end up with a much larger shareholding. Down the track it won't be a good look for Cindy and Co to be wearing massive losses from a listed company so there's only two ways to conceal / fix that, either massive price rises passed onto customers or nationalize the airline.

[winner69]

Beagle wasn't the PAYE deferred ? Can anyone do that ?

Was part of Covid support package ....FBT/PAYE deferral and bring forward tax losses

The $300 odd million is a lot of dosh eh ......saved from drawing down the govt loan ....but in reality it is a government loan but different words

[Beagle]

I liked the bit about them being EBITDA positive.

Defer to survive, probably won't have Beagle going on about how young the fleet is for quiet a few years.

History never repeats, right ;) https://www.airchathams.co.nz/charters/dc-3-charters

[Dassets]

Hard to see them making a taxable profit for next 5 years, maybe longer as the new 787s come online with that nice juicy depreciation lol. Long haul as a business is effectively gone as we knew it. Auditors are loath to allow tax losses on balance sheet unless there is a clear path to profitability.

I take nothing from the domestic travel uptick. You have everyone locked up here so not much else to do. All that money that used to be spent in NY, Aspen and London now here. Remember when NZ Stats used to report on offshore spending by travellers. Now that would have been great indicator early last year but I plain forgot about it(along with every other analyst/forecaster/economist.

[Beagle]

Hard to see them making a taxable profit for next 5 years, maybe longer as the new 787s come online with that nice juicy depreciation lol. Long haul as a business is effectively gone as we knew it. Auditors are loath to allow tax losses on balance sheet unless there is a clear path to profitability.

I take nothing from the domestic travel uptick. You have everyone locked up here so not much else to do. All that money that used to be spent in NY, Aspen and London now here. Remember when NZ Stats used to report on offshore spending by travellers. Now that would have been great indicator early last year but I plain forgot about it(along with every other analyst/forecaster/economist.

I agree. Impossible to see them making a profit after all costs and depreciation in the foreseeable future. The auditors are going to be under a lot of pressure ! I'd absolutely hate to be the audit partner on that job :eek2: Maybe they should just give up on long haul altogether ?

[winner69]

Jarden trimmed their valuation of AIR to 95 cents

Methinks they are still being particularly generous with a number like that.

[Beagle]

https://www.marketscreener.com/quote/stock/AIR-NEW-ZEALAND-LIMITED-6491407/consensus/

I've never seen analysts that bearish on a stock. 3 Sells !! and I think those analysts have it right and the other two are miles off the mark especially the one with fair value at $2 :eek2: What type of happy pills have they swallowed ?
Average assessment of value is $1.30 and lowest is 71 cents.

[nztx]

Does this mean that any sort of opportunity around the large Cap Raise etc is out the pilot's small side window ? ;)

I may have to consider redirecting a buy of a solitary entertainment value lonely single share elsewhere instead .. ;)

[Beagle]

They have to raise capital. Guess who's last man standing and the only one left underwriting the capital raise ;)

[nztx]

Post Cap Raise SP Broker assessments could be interesting .. ;)

wonder if some of the brokers & other experts will still be seeing fresh air below the job ? ;)

[winner69]

The first $300m of any capital raise goes to pay that deferred PAYE

Suppose they need $1.4billion all up

And then hope that lasts for a few years.

[Waltzing]

with the china vaccine looking like its a dud and third world countries all but knocked out and India in a dire state this thing is looking like it going to last another year at least as everyone will say "Of course we all know this"

of course you know because you are all whatching the 3rd re run of Grysons's Art Club on art's channel, arnt you? Im assuming there will be a 4th re run later this year.

anyway how far does this cap raise last? what the PL burn rate per month?

[Waltzing]

https://www.interest.co.nz/business/110944/forsyth-barr-analysts-have-doubled-their-forecast-loss-national-airline-2022-year

[Stranger_Danger]

I can't believe this is holding at $1.59. I'm not short because, well, who would short anything in this crazy world. But you'd have to be on crack to think Air NZ makes sense as an investment at $1.59. I can model highly optimistic scenarios that have almost no chance of happening and I still can't get to $1.59 if I'm, you know, considering it as an actual business thinking about things like cashflows and EPS (I know, who does that??).

Strange times.

[Beagle]

I can't believe this is holding at $1.59. I'm not short because, well, who would short anything in this crazy world. But you'd have to be on crack to think Air NZ makes sense as an investment at $1.59. I can model highly optimistic scenarios that have almost no chance of happening and I still can't get to $1.59 if I'm, you know, considering it as an actual business thinking about things like cashflows and EPS (I know, who does that??).

Strange times.

Well said, I couldn't agree more.

[Waltzing]

well one feels angst to say that the much loved national carrier should be a short.

[mikelee]

with the china vaccine looking like its a dud and third world countries all but knocked out and India in a dire state this thing is looking like it going to last another year at least as everyone will say "Of course we all know this"

of course you know because you are all whatching the 3rd re run of Grysons's Art Club on art's channel, arnt you? Im assuming there will be a 4th re run later this year.

anyway how far does this cap raise last? what the PL burn rate per month?

where did you read about the China vaccine? I haven't come across anything about its efficacy. would be disastrous if that's the case since, as of last week, China has already administrated 1 billion doses, domestically

[Beagle]

well one feels angst to say that the much loved national carrier should be a short.

I see there's an attempt to crowd fund saving the last AIR 747-400 from the scrap yard, (need to raise $2.5m)...the mind boggles as to how much of that goes to in administration to the person running the campaign. If people are interested in investing in AIR for philanthropic / nostalgia reasons maybe that's a better investment ?

[BlackPeter]

I can't believe this is holding at $1.59. I'm not short because, well, who would short anything in this crazy world. But you'd have to be on crack to think Air NZ makes sense as an investment at $1.59. I can model highly optimistic scenarios that have almost no chance of happening and I still can't get to $1.59 if I'm, you know, considering it as an actual business thinking about things like cashflows and EPS (I know, who does that??).

Strange times.

You are absolutely correct - fundamentals don't seem to support this market price.

On the other hand - what would be the fundamentals for e.g. various cryptocurrencies who provide neither assets nor earnings? People still pay real money for them. What happened to the fundamentals for the various Gamestop surges earlier this year?

Market frequently chooses to price securities without consideration of their earning potential.

Market consists out of unpredictable and irrational people with habits which used to be useful over the last million years.

- if this branch used to support my climb for many years, it probably is still fine. If this share was good two years ago, than it still must be good?
- if the herd stays, the environment must be safe, otherwise they would run, wouldn't they?
- greed and fear are important drivers. Share used to be more worth, so it probably still is (greed)? Currently it is quiet ... means perception is no need to run (no fear).

Many invest (too much of) their money in lotto tickets or in casinos, knowing that statistically they will lose. They still keep throwing more money into the same pit. Why would we expect them to behave different in the share market?

With tradeable securities like shares there is at least the option for holders to get out before the hype does ...

[unhuman]

I don't understand how it has held up for so long.

Who is holding a flatlining AIR for the last 12 months with huge potential downsides while watching the rest of the market go gangbusters?

[nztx]

https://www.stuff.co.nz/business/125530723/covid19-nz-air-nz-cancels-28-flights-to-australia-following-cluster-in-nsw

Covid-19 NZ: Air NZ cancels 28 flights to Australia following cluster in NSW

[LaserEyeKiwi]

Hard to see them making a taxable profit for next 5 years, maybe longer as the new 787s come online with that nice juicy depreciation lol. Long haul as a business is effectively gone as we knew it. Auditors are loath to allow tax losses on balance sheet unless there is a clear path to profitability.

I take nothing from the domestic travel uptick. You have everyone locked up here so not much else to do. All that money that used to be spent in NY, Aspen and London now here. Remember when NZ Stats used to report on offshore spending by travellers. Now that would have been great indicator early last year but I plain forgot about it(along with every other analyst/forecaster/economist.

I’m not a holder, but saying “Long haul as a business is effectively gone” seems incredibly shortsighted. In 24 months Covid will be a distant memory and travel will be back to normal.

[Vee Vee]

In 24 months the cashed up big boys will come out swinging. This sector internationally will be very tough after this reset. Not all will survive IMO.

AIR will struggle to make money on international, only surviving by dodging competition.

[biker]

Meant to include quote. See below

[biker]

Double up as above

[biker]

I see there's an attempt to crowd fund saving the last AIR 747-400 from the scrap yard, (need to raise $2.5m)...the mind boggles as to how much of that goes to in administration to the person running the campaign. If people are interested in investing in AIR for philanthropic / nostalgia reasons maybe that's a better investment ?

That’s a very nasty slur Beagle. Shame on you. Do you know who’s running the campaign? Do you have some background knowledge of their actions or intentions?
If not then I suggest you keep you very unpleasant, toxic comments off this forum.

[biker]

I see there's an attempt to crowd fund saving the last AIR 747-400 from the scrap yard, (need to raise $2.5m)...the mind boggles as to how much of that goes to in administration to the person running the campaign. If people are interested in investing in AIR for philanthropic / nostalgia reasons maybe that's a better investment ?

That’s a very nasty slur Beagle. Shame on you. Do you know who’s running the campaign? Do you have some background knowledge of their actions or intentions?
If not then I suggest you keep you very unpleasant, toxic comments off this forum.

[777]

That’s a very nasty slur Beagle. Shame on you. Do you know who’s running the campaign? Do you have some background knowledge of their actions or intentions?
If not then I suggest you keep you very unpleasant, toxic comments off this forum.

Great post.

[777]

Double post.

[Dassets]

I will say this again after saying it over 12 months ago. AIR should drop into receivership, grab what it needed to operate critical air bridge for NZ high value export support. This way you can terminate the ridiculous employment handcuffs. Over time expand a dedicated freight operation and run limited long haul pax op. If you run the carbon numbers AIR should have to bid on carbon restricted pax routes. It is going to burn cash at an extraordinary rate going forward.

Effectively this is NZs biggest social welfare program , one that is paying some beneficiaries over $400,000 a year.

[BlackPeter]

I will say this again after saying it over 12 months ago. AIR should drop into receivership, grab what it needed to operate critical air bridge for NZ high value export support. This way you can terminate the ridiculous employment handcuffs. Over time expand a dedicated freight operation and run limited long haul pax op. If you run the carbon numbers AIR should have to bid on carbon restricted pax routes. It is going to burn cash at an extraordinary rate going forward.

Effectively this is NZs biggest social welfare program , one that is paying some beneficiaries over $400,000 a year.

Great post, however - looking at the remuneration of the beneficiaries you forgot one order of magnitude.

Here are the top AIR salaries from last years remuneration report - and I copied only the numbers above $400,000 p.a.:

12661

Top earner (not sure - was this Greg Foran, he started only early 2020?) weighed in at 4.4 million dollars per year! Great tax payer paid benefit ... could I have one of these as well?

[Beagle]

Great post, however - looking at the remuneration of the beneficiaries you forgot one order of magnitude.

Here are the top AIR salaries from last years remuneration report - and I copied only the numbers above $400,000 p.a.:

12661

Top earner (not sure - was this Greg Foran, he started only early 2020?) weighed in at 4.4 million dollars per year! Great tax payer paid benefit ... could I have one of these as well?

I agree 100%. Its clear this company is only trading at the behest of the Govt and with its social welfare support and therefore all employees should have their salaries capped at the already extremely generous state salary sector level's.

[xp04]

Air NZ resumes Taiwan passenger service for first time since pandemic began


https://www.stuff.co.nz/business/industries/125546363/air-nz-resumes-taiwan-passenger-service-for-first-time-since-pandemic-began

[Dassets]

B757 pilots working for the govt get between $70t to around $120t per annum. I can understand that some of the AIR pilots may have more experience. Maybe apply the nurses seniority bonus of $3t a year. A pilot after 20 years after hitting 120t could justify 180t salary so say 30 years into the career.

[Beagle]

B757 pilots working for the govt get between $70t to around $120t per annum. I can understand that some of the AIR pilots may have more experience. Maybe apply the nurses seniority bonus of $3t a year. A pilot after 20 years after hitting 120t could justify 180t salary so say 30 years into the career.

That seems like a good basis for a complete reset of AIR's bloated cost structure fueled by a widespread "entitlement culture" (my opinion based on a number of discussions with several senior AIR employees), within the company. Apply the same remuneration structure across engineering too. If people don't like it they can always try and get a job elsewhere.

It won't happen though because nobody is brave enough to make these tough calls...

[James108]

I’m not sure how much pilots earn but I know it is a highly skilled position and requires years of training in flight school at great expense and then more years flying small aircraft before they have “made it”. I knew a pilot flying small aircraft doing in PNG to get the hours.

On top of that the hours/conditions are I imagine worse than a 9-5. I don’t mind them being well remunerated.

Cabin crew are definitely very poorly remunerated for the hours they do.

I’m a lot more sympathetic to the air crew than execs on $4m/year.

[Zaphod]

B757 pilots working for the govt get between $70t to around $120t per annum. I can understand that some of the AIR pilots may have more experience. Maybe apply the nurses seniority bonus of $3t a year. A pilot after 20 years after hitting 120t could justify 180t salary so say 30 years into the career.

Government pay rates never seem to match those in the private sector. That's one reason why so many leave to pursue private sector opportunities.

On an international comparative basis, the $70-$120k bracket for a Capitan seems quite low for anything but short-haul domestic services. AC paid their long-haul Captains more than double that with half the experience (in years) indicated above.

Is an experienced Captain with even only 5 years experience really only worth $70k? L1 IT Helpdesk staff receive around $55k-$65k, and that's considered an entry level role. Some further perspective is given when comparing this to the minimum wage which sits at the equivalent to $41,600 PA based on a mere 40 hour week. Although the number of flying hours per week/month/year are highly regulated, pilots also spend a large amount of additional time dealing with administrative issues which will distort the average earnings considerably.

The $400k bracket is likely to be LH sector Captains of planes like the 777-200ER, 787 etc. along with the ground based schedule planners (one of my school friends does this for a living now having given up being a captain), and exec's.

[biker]

B757 pilots working for the govt get between $70t to around $120t per annum. I can understand that some of the AIR pilots may have more experience. Maybe apply the nurses seniority bonus of $3t a year. A pilot after 20 years after hitting 120t could justify 180t salary so say 30 years into the career.

Hahahaha. Airforce pilots flying about 200 hours a year. Bugger all experience and getting trained and experience on the job. Get real.
Some airline pilots doing 800-1000 hours a year.
Airforce pilots need extensive airline training if they switch.
Different world.
Jeeeez

[Dassets]

Try getting a line pilot doing a combat approach. That I would like to see. I have flown with some airline pilots as my pax doing aerobatics, I am not ex airforce btw, and they close their eyes on the first move almost without fail. Don't confuse 70 hrs a month airline with flying. System operator yes flying not so much. Wait for the accident report from the crash at Ardmore on T/O a couple of montha ago. Might be an eye opener. Just saying.

[biker]

Try getting a line pilot doing a combat approach. That I would like to see. I have flown with some airline pilots as my pax doing aerobatics, I am not ex airforce btw, and they close their eyes on the first move almost without fail. Don't confuse 70 hrs a month airline with flying. System operator yes flying not so much. Wait for the accident report from the crash at Ardmore on T/O a couple of montha ago. Might be an eye opener. Just saying.

My last comment on this because it’s off topic but Dassets, you’re out of line with you last couple of sentences.
Unworthy of this forum IMO.
Also, this was about salaries that AIR is paying staff. I just want to say in no way was I denigrating military pilots.
They are selected for excellence and perform difficult tasks.
You just can’t compare conditions, total workload, skill sets, experience etc. Chalk and cheese.
It surprises me, the comments on this thread that would like to see smaller pay packets for AIR employees.
Typical shareholder sentiment I guess and to be expected but there is training, hard work, patience, capital outlay, experience and ability, sitting in behind these highly qualified and correspondingly well paid, staff.

[Beagle]

Dassets is currently #3 out of 360 in the annual sharesight share competition. Very impressive !

AIR faces "Turbulence" https://www.nzherald.co.nz/business/stock-takes-financial-markets-hang-on-feds-call-air-new-zealand-faces-turbulence/J25ZOJ4YAB3K2QYS3AITARHKII/ paywalled
Excerpt
Jarden analyst Andrew Steele said the firm continued to forecast Air New Zealand will need to raise $1.2b of additional equity, "an amount which we no longer view as a conservative estimate." "We retain our sell rating, reflecting our view that given Air New Zealand's requirement for what will likely be a highly dilutive capital raise, material ongoing near-term losses and lack of comfort on the timing and trajectory of any earnings recovery, the shares present a negatively skewed risk/reward profile," he said.

[Dassets]

Understand what you are saying Biker, however the last comments are only factual. I do know what I am talking about unfortunately. Also I am on the wrong side of 50, started flying at 15 and currently own and operate a Class 3 aircraft. Facts in my book are never out of line but can be very painful. That is what makes aviation(and military) the learning systems they are. I am very experienced in markets and also have extensive turnaround experience. All at wholesale level, broker through to fund manager. Situations like AIR are brutal and I find it is better to make the hard calls early. Others may have a different opinion and that is what makes markets.

[McPussPuss]

On an international basis AIR pay their flight crew particularly modestly, and whilst NZ is a great place to live, the lion's share of their long haul crews earning large amounts live and Auckland which is rapidly soaring up the list of the worlds most expensive cities.

Comparing air force pilots and airline pilots is particularly ignorant. Whilst maybe not the top guns that Dassets expects, the 'skills' airline pilots are remunerated for are largely to do with decision making, risk management and whilst hopefully not tested the majority of the time they can have an outsized impact on the bottom line for shareholders, passengers and everyone else involved if they make a mis-step.

The risk profiles in the military are vastly different evidenced in a way by the proximity they regularly fly to terrain.

The general cost of training to have an airline ready pilot is not less than 6 figures (and in NZ 5+ years as an apprentice building the pre-requisite experience) and this is a cost that is not worn by the airline.

[Dassets]

My point is a little missed. Your comments are fine in a situation normal. Problem is lack of revenue and losses. It doesn't matter how much training has been done, cost of living in a place, ability to safety go from a to b. If there is no money or it is provided as a handout by government aka subsidy which is potentially illegal under WTO then get paid like a RNZAF driver. Sort of like why professional sportsman get paid, not because they are amazing but because of the revenue generated. In AIR's case you cannot afford to pay the pilots what they are being paid nor the executives. The game is up. Also check out the pilots that worked for other airlines eg Cathay. All back here now with no income.

[Beagle]

There is none so blind as those that will not see. Economic reality is lost on some people but the truth is the supply and demand situation for airline pilots and engineers worldwide has dramatically changed and is unlikely to go back to what it was for many many years. For anyone with both eyes wide open AIR is ostensibly un-investable with its current cost structure and foreseeable outlook. A reset is badly needed to reflect the true reality of the foreseeable future.

I do think a reset of salaries is appropriate as the company is being effectively underwritten by the Govt and those left working for AIR are in principle quasi public employees and therefore their salaries should be those commensurate with a state owned organization.

[biker]

Understand what you are saying Biker, however the last comments are only factual. I do know what I am talking about unfortunately. Also I am on the wrong side of 50, started flying at 15 and currently own and operate a Class 3 aircraft. Facts in my book are never out of line but can be very painful. That is what makes aviation(and military) the learning systems they are. I am very experienced in markets and also have extensive turnaround experience. All at wholesale level, broker through to fund manager. Situations like AIR are brutal and I find it is better to make the hard calls early. Others may have a different opinion and that is what makes markets.

You seem to have done well Dassets. Good on you.
However, it’s not about you, it’s about what AIR pay their staff.
I agree, facts are never out of line, and the more the better.
However your obtuse, idle speculation about the outcome of an accident investigation is what’s out of line, and it has nothing in common with facts or relevance to this thread.

[Arbroath]

You seem to have done well Dassets. Good on you.
However, it’s not about you, it’s about what AIR pay their staff.
I agree, facts are never out of line, and the more the better.
However your obtuse, idle speculation about the outcome of an accident investigation is what’s out of line, and it has nothing in common with facts or relevance to this thread.

Did you say obtuse? That’l be a month in solitary.

[stoploss]

hmmmmm
https://www.stuff.co.nz/business/inside-business/125549752/air-nz-boss-greg-forans-panic-slowly-approach-to-tackling-hard-times
Still a mystery to me why this is over $ 1.00.
DISC : Still short .
"We had a mistake early on about credits, we should have been right upfront about credits. I was too late to the party. I should have said right on day one: ‘Here’s the problem team, I can’t afford to give you your money back’ because that was the truth. An airline effectively runs on the fact that you pre-pay us.”

[Snow Leopard]

There is none so blind as those that will not see. Economic reality is lost on some people but the truth is the supply and demand situation for airline pilots and engineers worldwide has dramatically changed and is unlikely to go back to what it was for many many years. ....

The shortage of suitably qualified pilots and some other staff was an ongoing problem for the worlds airlines prior to Covid and in some parts of the world it is already (https://www.cnbc.com/2021/06/21/american-airlines-cancels-flights-due-to-staffing-maintenance-issues.html) a problem again.
On a world wide basis some are talking about 2022 but others later for the manpower situation to be an inhibiting factor once more.

Any and every airline which believes it has a future should be planning now for this upcoming situation.

http://www.storytrender.com/wp-content/uploads/2019/05/19_CATERS_DANCING_SNOW_LEOPARD_03-768x488.jpg

Jazz Hands (http://www.storytrender.com/93504/jazz-hands-stunning-snow-leopards-jump-caught-on-camera/)

[Beagle]

https://www.youtube.com/watch?v=9MR8Ym_H-80 Shareholders chasing profits in AIR shares.

[Dassets]

https://www.youtube.com/watch?v=9MR8Ym_H-80 Shareholders chasing profits in AIR shares.
Some people probably need to watch a few zombie programs. It might honestly trigger a thought about AIR.

[Beagle]

https://www.nzx.com/announcements/374587

Good stuff...making way for the Govt to appoint some fresh blood to the board.
Maybe Shane Jones and Hone Harawira ;)

[koko90]

My point is a little missed. Your comments are fine in a situation normal. Problem is lack of revenue and losses. It doesn't matter how much training has been done, cost of living in a place, ability to safety go from a to b. If there is no money or it is provided as a handout by government aka subsidy which is potentially illegal under WTO then get paid like a RNZAF driver. Sort of like why professional sportsman get paid, not because they are amazing but because of the revenue generated. In AIR's case you cannot afford to pay the pilots what they are being paid nor the executives. The game is up. Also check out the pilots that worked for other airlines eg Cathay. All back here now with no income.

They should start with the executives who are on way larger salaries. What is your beef with the pilots anyway? Sounds like you have something against them maybe because you weren’t good enough to get into an airline. They are actually extremely underpaid compared to pilot salaries overseas. And to fact check, Cathay has continued to pay all their pilots full salary all throughout the pandemic unlike AIR who cut 30% of their pilots and made those remaining take significant temporary paycuts or unlaid leave. Cathay Pacific itself hadn’t made any pilots redundant up until last month where they announced closures of a few overseas bases but with the option for the pilots to remain in the company if they relocate to Hong Kong, only those in the sister airline Cathay Dragon were let go.

[Blue Skies]

Will be interesting to see what effect this article in todays Stuff has on AIR's SP action today/ by end of this week.
Might open a few eyes!
Has been the most extraordinary disconnect between SP & reality.

https://www.stuff.co.nz/business/opinion-analysis/300349210/is-air-nz-flying-too-close-to-the-sun

[Beagle]

Interesting article. So $660m just to repay PAYE and the Govt loan, another $450m to cover this year's losses and another $450m to cover anticipated FY22 losses = $1,560m.

The chances of another capital raise in due course cannot be overlooked as its highly likely that AIR will be losing serious money in FY23 and possibly FY24 as well.

I think to Dassets point, its fair to say that AIR has no prospect of making money in the foreseeable future and yet many executives continue on salaries of $1m plus and some pilots on $500K plus.

How many years does the taxpayer tolerate supporting AIR when senior staff are being so handsomely remunerated ? 2 more years, 3, indefinitely ?

[peat]

Will be interesting to see what effect this article in todays Stuff has on AIR's SP action today/ by end of this week.
Might open a few eyes!
Has been the most extraordinary disconnect between SP & reality.


https://www.stuff.co.nz/business/opinion-analysis/300349210/is-air-nz-flying-too-close-to-the-sun



I dont disagree with the dudes article however note his position in the cesspit.
It appears he's managing an ethical fund which no doubt wont have airline shares and could even be short??

Discl - no current position

[Snow Leopard]

Will be interesting to see what effect this article in todays Stuff has on AIR's SP action today/ by end of this week.
Might open a few eyes!
Has been the most extraordinary disconnect between SP & reality.

https://www.stuff.co.nz/business/opinion-analysis/300349210/is-air-nz-flying-too-close-to-the-sun

I know this forum discourages copy & paste of newspaper articles but this one seems to be a copy, paste & stitch of this thread!

[Blue Skies]

I know this forum discourages copy & paste of newspaper articles but this one seems to be a copy, paste & stitch of this thread!


Not clear if you mean the article appears to be a 'copy & paste' of the narrative on this thread, or we shouldn't 'copy & paste' links to newspaper articles on this thread?

Anyway the point intended was that this article in today's Stuff might spook a few investors this week & cause a bit of a collapse in the SP.

I see Rob Fyfe also commenting today that businesses should plan on borders being closed for 2 or 3 years & that even with high vaccination rates business travel will become more complex due to stringent health checks resulting in a reduction in business travel & necessitating adapting to new ways of doing business.
Can imagine companies weighing up risks of company executives travelling overseas being forced into lockdown due to an outbreak in that country & unable to return home.

[Zaphod]

I see Rob Fyfe also commenting today that businesses should plan on borders being closed for 2 or 3 years & that even with high vaccination rates business travel will become more complex due to stringent health checks resulting in a reduction in business travel & necessitating adapting to new ways of doing business.
Can imagine companies weighing up risks of company executives travelling overseas being forced into lockdown due to an outbreak in that country & unable to return home.

Rather than the borders being closed for two or three years, I suspect that borders could be routinely opened & closed over that period in reaction to outbreaks of new variants. Perhaps that was point the article meant to make, but was not clear upon.

[Beagle]

Rob Fyfe opines https://www.stuff.co.nz/business/industries/125651153/covid19-businesses-should-plan-for-borders-being-closed-in-two-or-three-years-time-rob-fyfe-says

[Beagle]

https://www.nzherald.co.nz/world/covid-19-coronavirus-lambda-strain-hits-uk/BSJ52H5XDJJEB6NGMFIOWYZG44/ Extremely dangerous new variant.

I can't help wondering how many new and even more dangerous variants will emerge in the years ahead. Will we still be battling dangerous new variants in the 2030's ?

What are the implications for travel ? Surely business's will try everything in their power to avoid the risk of sending their executives to physical meetings overseas and resort to digital meetings ?

What are the implications for demand for premium seats at the front end of the aircraft where most of the money is made ?

[Snow Leopard]

Do all AIR planes have black wings?
And if not, why not?

Black wings allow them to fly longer (https://newatlas.com/science/seabirds-black-wings-flight-efficiency/)

Albatross

[peat]

short again.

12727

prepared to add higher.

[Beagle]

Interesting article in the Herald today about the rise of the retail investor through platforms like Sharsies.
Where are they investing their money ?
Where Kiwis are investing:
The 10 most popular holdings by amount invested
1) Air New Zealand (NZX)
2) AMC Entertainment Holdings Inc (US)
3) a2 Milk Company (NZX)
4) Tesla Inc (US)
5) Gamestop Corporation (US)
5) Fisher & Paykel Healthcare Corporation (NZX)
6) Smartshares NZ Top 50 Fund (NZX)
7) Smartshares US 500 Fund (NZX)
8) Mainfreight (NZX)
9) Meridian Energy (NZX)

[Vee Vee]

Interesting article in the Herald today about the rise of the retail investor through platforms like Sharsies.
Where are they investing their money ?
Where Kiwis are investing:
The 10 most popular holdings by amount invested
1) Air New Zealand (NZX)
2) AMC Entertainment Holdings Inc (US)
3) a2 Milk Company (NZX)
4) Tesla Inc (US)
5) Gamestop Corporation (US)
5) Fisher & Paykel Healthcare Corporation (NZX)
6) Smartshares NZ Top 50 Fund (NZX)
7) Smartshares US 500 Fund (NZX)
8) Mainfreight (NZX)
9) Meridian Energy (NZX)

Not targeting value anyway. At least MFT is on there. Of interest to me is will NZF and USF still be on there in 12 months now sharesies charges buy/sell fees on those now and investnow, smartshares etc don't.
Anyway back on topic it maybe explains the share price being so high.
Like most here I can't relate the SP to reality. Tough times for airlines (and Gamestop).

[JohnnyTheHorse]

short again.

12727

prepared to add higher.

That short going well Peat... Transtasman bubble paused for at least 8 weeks.

Think they got a bit greedy by delaying the capital raise. Should have pounced when the price was extra irrationally high ($1.90).

[Dassets]

Struggling to do the capital raise my guess due to FMCA requirements on a cash issue. Which Director or member of the DD team wants to sign or take liability. Insurance does NOT cover costs defending criminal charges if that ever emerged btw. That is why anyone signing is exercising the upmost care.

[Waltzing]

Mr B on Variants. Would now be the time most variants emerge as the virus is at its peak or approaching it.

Cap Raise must be the hardest thing to get away now at anything like above a 1.20 give or take 60 cents.

[peat]

That short going well Peat... Transtasman bubble paused for at least 8 weeks.

Think they got a bit greedy by delaying the capital raise. Should have pounced when the price was extra irrationally high ($1.90).

yeh it is actually ....

;)

just assisting out with liquidity yeh? someone has to sell to the SHaresies brigade?

[JohnnyTheHorse]

Does anyone have any insight on the staffing implications and hence financial impacts? I.e. is AIR going to have to keep all transtasman staff on full pay during this 2 month period?

[winner69]

Does anyone have any insight on the staffing implications and hence financial impacts? I.e. is AIR going to have to keep all transtasman staff on full pay during this 2 month period?


Ask and the government giveth I feel the game will be

[Beagle]

Mr B on Variants. Would now be the time most variants emerge as the virus is at its peak or approaching it.

Cap Raise must be the hardest thing to get away now at anything like above a 1.20 give or take 60 cents.

Long day at Rainbow's End with the grandkids...very tired dog.

Initial thoughts. Not surprised by the popping of the bubble. Greg Foran recently said AIR were in the (from memory) "Revive" phase. At the time I thought it was a very bold call, now its clear he's either playing "Charades" (would be if he said it now), or trying to put lipstick on a pig in terms of the pending capital raise, (which clearly was his intention at the time).

I called it months ago, its FAR FAR too early to invest in the reopening trade, be it airlines, hotels, cruise lines, tourism stocks or anything else related to reopening. Simply no mileage in going there, in my opinion. I think Covid variants are going to dog us for many years. The smart money is doubling down on retail that will benefit from record stay at home expenditure for the foreseeable future, probably many years.

Capital raise to be pushed back again or Govt underwritten...those would appear to be the two most logical scenario's. Probably under $1 when it happens. Maybe 2:1 at 75 cents ? (Would raise about $1,680m if fully underwritten less underwriting fees).

[JohnnyTheHorse]

Ask and the government giveth I feel the game will be

"Foran said affected Air New Zealand crew would be kept on and paid their base salary for the eight weeks."

That ought to increase that cash burn.

https://www.stuff.co.nz/business/industries/125848992/air-nz-putting-on-extra-flights-and-bigger-planes-to-bring-new-zealanders-home-ceo-says

[Waltzing]

"Long day at Rainbow's End with the grandkids...very tired dog."

A more noble an occupation of ones time could not be found!

It appear the public will be farther encourage to see the country in the spring and some extra holiday pay would help with this.

RBNZ might need to start some money printing again.

Tourism stocks for flights are now a trade.

Oh they stopped that assuming the hot state of the economy cant support it.

[Chinesekiwi]

There will be changes made to staffing - LWOP, part time, ALV, reallocation to other business units or - worse.


Does anyone have any insight on the staffing implications and hence financial impacts? I.e. is AIR going to have to keep all transtasman staff on full pay during this 2 month period?

[Chinesekiwi]

There are temporary re contracted crew - expect changes here.


"Foran said affected Air New Zealand crew would be kept on and paid their base salary for the eight weeks."

That ought to increase that cash burn.

https://www.stuff.co.nz/business/industries/125848992/air-nz-putting-on-extra-flights-and-bigger-planes-to-bring-new-zealanders-home-ceo-says