AIR - Air NZ.

[Baa_Baa]

And be sued for breach of contract.

So you're saying they're obliged to draw from the hedging contract, can't buy on market without breach, sorry I don't know exactly? If so, Mogul is correct they'll be shafted by the mark to market difference which is already quite a large percent price above market price - and going lower by the look of it.

Still, they will require a lot less fuel at the current rate of cancelled flights. Will they have a minimum 'take' on the hedge contracts as well, furthering the pain, or is it discretionary?

[Beagle]

AIR's most recent fuel hedge position is here http://nzx-prod-s7fsd7f98s.s3-websit...043/317650.pdf

Put you guys a bit crook earlier. Actually 91% of estimated fuel use to 30 June 2020 is headged at between 53.68 and 65.16. With overall capacity cuts to date they have effectivly now hedged more than 100% of remaining oil consumption through to 30 June 2020.
In recent years AIR has primarily moved to hedging through the use of "Collars". As the term suggests what a collar does is try and collar the price within a specific range. If oil is outside that range, higher, AIR is in the money with its collar, if its lower, its out of the money i.e. cost. With the current spot price of Brent about $32 today they will be out of the money by at least $21.68 per barrel plus the cost of the collar.
They have also used some Brent call spreads and a small percentage, about 15% of consumption for the rest of this year, they have hedged the jet fuel crack spread...oil is one risk, the cost to crack it to jet fuel, another.

The bad news for the first half of FY21 is they have already hedged 70% of estimated oil consumption for Q1, (probably 90%+ with capacity reductions by then), at $53 and even 43% of FY21 Q2 has been hedged at similar levels.

For a look at how collars work here's a good article.
https://www.mercatusenergy.com/blog/...ee-Way-Collars

Bottom lining this for the time poor, AIR will not get any meaningful gain from lower oil prices until at least October 2020.

QAN down 10.9% today, AIR down 5.3%. Tomorrow could be a very interesting day for AIR shareholders.

[Independent Observer AUNZ]

AIR's most recent fuel hedge position is here http://nzx-prod-s7fsd7f98s.s3-websit...043/317650.pdf
QAN down 10.9% today, AIR down about only half that. I expect tomorrow will be catchup for AIR.

More likely Thursday will see the large correction Beagle? That's when the shares go ex-div and the slide might extend as a result? 11c suddenly looks like a huge div.

[Beagle]

More likely Thursday will see the large correction Beagle? That's when the shares go ex-div and the slide might extend as a result? 11c suddenly looks like a huge div.

Yeap, there's that coming later in the week as well. It amounts to a reckless amount in the current circumstances.

[BlackPeter]

More likely Thursday will see the large correction Beagle? That's when the shares go ex-div and the slide might extend as a result? 11c suddenly looks like a huge div.

Gain 11 cents in dividends but loose (already now) nearly a dollar in capital? And this is just the beginning. Could be another dollar to loose or more. Sometimes the logic of dividend hunters is just amazing ... ;

[winner69]

Besides the 23,000 odd shareholders with less than 5,000 shares there,’s stuff all other shareholders anyway

Being so tightly held maybe one reason share price isn’t collapsing as much as some think it should be.

[winner69]

If you’re interested in current airline global capacity

https://www.oag.com/blog/coronavirus..._hsmi=84469601

[iceman]

Some European airlines are flying empty planes to keep slots, particularly into Heathrow. How mad is that ? The Transport Minister in the UK has written to the corporation running the airports and asked them to be reasonable !

[Entrep]

Who's honestly buying this right now? You'd have to be mad

[Beagle]

Who's honestly buying this right now? You'd have to be mad

Hopefully everyone on here has already read my very vocal warnings about the severe risk with this one.