Jarden reiterates SELL rating and target price is reduced to 65 cents - paywalled https://www.nzherald.co.nz/business/...JCTMZUDDB42VY/
Dame Therese Walsh looks resplendent in Synlait Pink and Greg Foran has a colour matched tie, what could possibly go wrong ;)
Key Assumptions underpinning their "guesses", (not an exhaustive list by any means but just ones I wish to comment on)
From the middle of 2022, international travel (excluding China and
Hong Kong where international borders are expected to remain closed) is uninterrupted,
with no self-isolation restrictions and testing requirements easing for inbound and
outbound customers on Air New Zealand's key routes
Chance of another Covid variant causing further major disruption looks very real to me.
By 2025 aggregate passenger demand for domestic, Tasman and Pacific Islands travel will marginally exceed FY19 (financial year) levels, supported by network growth into those markets; and aggregate passenger demand for long haul will be slightly lower than FY19 levels (due to fewer ASKs flown overall), and have a more gradual pace of recovery relative to short-haul markets.
Completely overlooks the high probability that Covid has changed people's propensity for air travel
No long-term structural changes in travel behaviour or trends post-pandemic, including resulting from environmental sustainability concerns, health concerns related to Covid19, technological changes, or changes in customer preference.
I think this is ridiculous. There's no question doing business by Zoom or other digital platforms has become an accepted zero risk way of conducting business. Companies will be very reluctant to send senior executives on long distance flights due to the risks involved to key personnel and the risks of litigation. I think its safe to say the front end of the aircraft where the company makes a lot of its money is going to be affected materially for the foreseeable future. Its also clear there's rising awareness of the environmental impacts of jet travel.
AIR's assumptions here look fundamentally flawed to me.
Fuel prices are assumed to progressively reduce to $75 per barrel for the 2024 financial year.
Yes we'd all like that but its complete and utter guesswork and looks extremly optimistic.
Final comment - I used red because shareholders are going to have to get used to seeing a LOT of red ink in AIR's financial statements in the future !