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"Might be years (if ever) before any of those 15 777's come back from the Alice Springs plane graveyard." i hate this air craft and i never want to fly on one again even if they are safe ...where are they going to route them..id say they will have to sell them? to ?
And who do you think would buy them.?
Thousands of aircraft parked up,which will never see service again around the world.
https://www.youtube.com/watch?v=xpIs8Y9vgSs
I will buy it.....$10k each
I will renovate it and do Airbnb on it....
But if the guests banging at the night...the plane might shake a bit? Anyone has ideas?
AIR N.Z.'s reputation nose dives. https://www.nzherald.co.nz/business/...ectid=12339228
777-200's are certainly a goner (circa $400m write off this year as already announced by AIR) and I doubt they'll bring back the 777-300's as they're the ones that have the old legacy pilot contracts with pilots earning ~ $500K each. These are about 8 years old and will be considerably more valuable than the 14 year old 777-200's.
AIR do not give a breakdown of values by aircraft type but I note in their 2019 financial statements, note 9 page 14 under the depreciation that airframes are written off over 18 years and engines over 6-15 years.
If the 8 777-200's are worth $400m at an average age of 14 years with engines almost written off and airframes around 78% written off, then it would seem likely 7 bigger and more modern 777-300's at an average age of only 8 years are worth quite substantially more, perhaps $600-800m and if they have to be written off in the FY21 accounts that's another massive hit.
Yet more nonsense from you Beagle.
Air NZ only own 8 of their 777 aircraft!! 4 777-300 and 4 777-200, the rest are leased which has been discussed here multiple times.
Not nonsense at all. AIR have already stated that they are looking at circa $350-400m write down on their 777-200's, subject to audit confirmation so it stands to reason they are looking at close to double that on their considerably more modern 777-300's.
$5m per day they were losing included $70m wage subsidy and quite a number of international repatriation flights during lockdown 4.
You suggesting they will be breaking even on flying just over half their domestic capacity is complete nonsense. JetStar are starting up again on 1 July and Qantas are in a vastly stronger financial position than a limping NAC.
They will be doing very well if they can get their loss down to $3m a day by the end of the year. Notice how WHO are saying internationally Covid 19 is getting worse.
Highest numbers ever recorded in the last few days. Anyone thinking that AIR are going to start flying to most of their former international network by mid next year is taking an extremely optimistic view of things.
Today's 10% drop just the very start of the bubble popping. https://www.cnbc.com/2020/06/11/glob...irus-wave.html
What do people not do in a one in 100 year deep recession with a genuine threat to their lives - yeap, you guessed it, international travel. https://www.cnbc.com/2020/06/10/oecd...t-in-2020.html
AIR should do a massive capital raise and feed the ducks while they quacking and some are silly enough to think their 800 day plan might actually work.
The part where you said Air NZ owned 8 777-200s and 7 777-300s and then proceeded to extrapolate from there, the potential write-down was nonsense.
The rest is just speculation.
Bring back just on half their domestic capacity while ostensibly having just a tiny fraction of international capacity is not going to slow the cash burn down much. They were doing $6,000m a year turnover and Cam Wallace said earlier this week they are hoping to do $500m, that's not even one tenth of former turnover ! I think you have a very limited understanding of the level of overheads and fixed costs in their business.
IN that article you referenced "Four of the 777-300ER are owned and three are leased. Of the 777-200ER four are owned and four are leased".
If AIR are writing off $350-450m on their 4 14 year old 777-200's their 4 owned 777-300's that are just 8 years old will be considerably more valuable.
The exact number of planes might be wrong - https://www.nzx.com/announcements/354105 Page 5. At least is non-cash. Beagle is actually slightly incorrect in saying $350-$400m - it is $350-$450m.
AIR had fractionally over $1b in cash at 31/12 - so presumably not changed much up until Covid let loose. They also had $447m in trade and other receivables.
They have publicly stated previously (last week?) that they will start dipping into the Govt loan soon - and use all of it. Whether they are exploring other more cost effective options, I think it would be prudent to be doing so.
So if they need more cash, $5m per day would last them over 6 months. Exact cash burn still to be disclosed - but been substantial. While the burn is slowing with cost saving measures - undoubtedly need more cash.
They received$71,096,817.60 from the wage subsidy. If you doubt this, then check here: https://services.workandincome.govt.nz/eps/search
Jaa, I definitely appreciate your views and add real value to the AIR discussion. However should not dismiss as 'speculation' when much of it has been disclosed.
Just for the fun of it can anyone point me to where it says that the $350-450 (non-cash) write down is specifically just for the 777-200s.
Some very wise comments there from Baa Baa.
Out of interest I did a little of a historical recap as to where AIR's price has been relative to the AR quoted NTA in the past (at 30 June).
2007 206%
2008 75%
2009 61%
2010 76%
2011 84%
2012 58%
2013 95%
2014 130%
2015 154%
2016 119%
2017 199%
2018 178%
2019 157%
2020 ???
Given the current trading environment something below NTA would appear sensible. How big should the discount be, that's the multi-million dollar question. The 31 December 2019 NTA was $1.69 but that has to fall over the Jan-June period due to operational losses and asset write-down's. The current share price of $1.66 is still therefore above NTA. The price could (or possibly even should) be above this level if the trading environment was positive - but it isn't.
In terms of the non cash impairment charge for the 777 aircraft - I note that Air NZ adopted IFRS 16 for this fiscal year and the interim report indicated that as a result they added a right of use asset of $876m in relation to what were previously off balance sheet leases. It’s not clear from the disclosures as to whether the impairment relates to the aircraft owned by Air NZ, an impairment in the right of use assets or both.
If it related to owned aircraft then that would suggest that management’s forecast cash flows from these aircraft discounted for WACC are less than the book value.
In terms of the right of use asset, the value under IFRS 16 is normally calculated by reference to the contracted payments under the lease less the incremental cost of borrowing. But if the discounted forecast cash flows from these leases aircraft are below this value does this suggest an impairment would be required because the value of the discounted cash flows from operating the aircraft are less than the discounted lease outgoings?