Seem Beagle et al have been overly pessimistic, even hysterical. So let me give the optimistic case.
Impressive they have kept the fuel hedge losses to only $90m. Was wondering what the effect of all those reparation and cargo flights was. Even if only break-even they help use up the fuel hedge.
Also impressive they still have $640m in the kitty after almost 10 weeks of severe restrictions and no covenant or near term debt repayment issues. $640m could last 6+ months.
By Nov/Dec:
- NZ sould be at level 1 with no more social distancing or fear of domestic travel allowing the middle seats to be filled and a profitable domestic network to reemerge.
- Tasman and Pacific bubble could be in operation
- Near instant COVID-19 tests both on departure and on arrival could see home quarantine replace quarantine in hotels with bracelets and tracking aps. Have a look at what Hong Kong is doing to see how this could work. Thus allowing resumption of more international flights and greater international demand.
- The efficacy of potential vaccines should be better understood and thus an end date could be in sight (even if still over a year away). The share market is always forward looking.
Under such conditions and with plenty of financial runway things won't look so bad. Air NZ will then be able to reorganise their debt to avoid using the usurious government loan and/or have a sensibly priced pro-rata rights issue if need be.