Govt must desperately need this AIR dividend, which must be only thing holding up the SP, but can't imagine there'll be any future ones after this for some time.
Noticed a serious change in tone from Public Health officials in last day or two. Is it too late now for AIR to cut this dividend?
If there was a sudden announcement next week, SP would drop like a stone.
In my view excellent example for a dividend trap.
Holders might ask themselves what the share is worth without the in the current situation unsustainable dividend payment. If it is less than the current SP minus the dividend, it might be a good time to sell.
Of course - in 12 to 18 months things are likely to look rosier again (with many competitors gone and the virus coming under control). I do have as well no (well, little) doubt that AIR will survive, even it it is just due to government intervention. But really hard to say what the remaining value of the shares will be if significant dilution due to a bailout is a possibility.
The worst thing is - any dividend payments now are reducing their chances to get without capital raise through this crisis. I don't think it is in the best interest of the shareholders.
Anyway - not holding . DYOR.
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
Govt must desperately need this AIR dividend, which must be only thing holding up the SP, but can't imagine there'll be any future ones after this for some time.
Noticed a serious change in tone from Public Health officials in last day or two. Is it too late now for AIR to cut this dividend?
If there was a sudden announcement next week, SP would drop like a stone.
I don't think the Govt desperately needs it, (their books are in pretty good shape at this stage), but the lack of caution by the board, and / or their lack of foresight is concerning. I think its highly likely the next financial transaction between shareholders and AIR after this dividend will be AIR asking for money i.e. capital riase.
I cannot recall any company declaring a dividend before and then annulling it before its paid. Such a move to the best of my knowledge would be not only unprecedented but a serious embarrassment for the board.
The potential for very serious demand destruction going forward should be obvious to all and airlines trade on very thin margins with a very high fixed cost base. Once they have worked their way through delivering on the ~ $1.4b of prepaid tickets that existed at 31 December 2019 (and let's for the sake of keeping this simple assume a similar figure that existed at the start of February before this started to look really worrisome), which amounts to about 3 months worth of flights, by May 2020 this could get very serious for AIR.
If it was safe to travel in aircraft with this virus why have AIR stood their entire crews down that were working on those flights that the corona virus passenger was on ?
They weren't within 1 metre of that passage for 15 minutes like the ministry of health tells us is their "official risk zone". Who's telling porkies ? Ministry of Health, AIR or are we in some sort of state of malaise where nobody really knows how to accurately assess the risk ?
How long before the public en-masse, decide its better to play it safe than be sorry ?
Last edited by Beagle; 06-03-2020 at 12:29 PM.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
I don't think the Govt desperately needs it, (their books are in pretty good shape at this stage), but the lack of caution by the board, and / or their lack of foresight is concerning. I think its highly likely the next financial transaction between shareholders and AIR after this dividend will be AIR asking for money i.e. capital riase.
I cannot recall any company declaring a dividend before and then annulling it before its paid. Such a move to the best of my knowledge would be not only unprecedented but a serious embarrassment for the board.
The potential for very serious demand destruction going forward should be obvious to all and airlines trade on very thin margins with a very high fixed cost base. Once they have worked their way through delivering on the ~ $1.4b of prepaid tickets that existed at 31 December 2019 (and let's for the sake of keeping this simple assume a similar figure that existed at the start of February before this started to look really worrisome), which amounts to about 3 months worth of flights, by May 2020 this could get very serious for AIR.
If it was safe to travel in aircraft with this virus why have AIR stood their entire crews down that were working on those flights that the corona virus passenger was on ?
They weren't within 1 metre of that passage for 15 minutes like the ministry of health tells us is their "official risk zone". Who's telling porkies ? Ministry of Health, AIR or are we in some sort of state of malaise where nobody really knows how to accurately assess the risk ?
How long before the public en-masse, decide its better to play it safe than be sorry ?
I was laughing and joking to a colleague a couple of nights ago and noticed I was emitting small droplets landing on his face-he didnt seem to notice but I moved away to about 2 metres which seemed a lot safer.On reflection if I had corvid-19 it would only have taken seconds to transmit the virus.Also my droplets were all over his face so he could easily inoculate himself later(also I probably put a few on his conjunctiva).
So yes they must be telling porkies as it saves having to test people.
AIR takes axe to services with Hong Kong, Taipei and Singapore flights down 25-50% over the next few months. "Demand has fallen off a cliff"
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Airlines heading towards worst year for long time ...and it’s only March
I think people have already decided en-masse to not choose to make new airline bookings unless its absolutely necessary for business purposes.
Younger travellers less at risk might still choose to make new discretionary leisure bookings if the price is right but the real wealth lies with the baby boomer generation who are most at risk so there's likely to be a lot of empty seats towards the front of the plane.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
I put this into the Serko thread, but it might be still more relevant for AIR:
Originally Posted by BlackPeter
Just seen an interesting stats in a German magazine. About half of people asked said that they would delay or cancel a planned overseas trip due to the corona virus ... and the other half said that they would still go ahead.
Assuming that the split in other first world countries might be similar it would be fair to assume that travel might drop this year by half. Not the end of the world for everybody, but likely to kill anybody in the travel industry with too much leverage or too much fixed costs.
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
I put this into the Serko thread, but it might be still more relevant for AIR:
Was listening on CNBC this morning to the multi billionaire that owns the Houston Rockets and chains of hundreds of restaurants around the world as well as hotel and casino interests. He said he lost ~ $1m a day this week on his restaurants. He likened them to the airline industry with very high fixed overheads. "Once you lose just 20% of your customers for a sustained period of time you go broke".
AIR's average load factor has been about 83%. 20% off that is 66% and I would think with that load factor on a reduced level of services, their losses would be more than $1m a day. If that survey is indicative of forward intentions towards travel world-wide, there's very, very serious trouble ahead for all airlines.
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Ecclesiastes 11:2: Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
Originally Posted by Blue Skies
Reply With Quote
Bookmarks