AIR - Air NZ.

[peat]

Singapore airlines announced their first ever loss, a lot of it due to future fuel hedging losses.

financial engineering to the rescue one more time.


I agree there is something going on with AIR share price. Such that it makes those of us who think

the company is a basket case

are wrong. But history is on our side.

[dobby41]

I don’t necessarily think it is but multiple millions of dollars of shares being bought and a share price of $1.25 ish would indicate something.

I have talked to lots of people new to shares who all say "buy AIR, Govt won't let them fail" but they don't realise that the Govt might not (probably wouldn't if it came to that) pay them their $1.25 if they took over.
The people think they can't lose, they don't understand that they can.

[unhuman]

Likely true, but exactly how many funds are these types of investors putting in and therefore what impact are they likely to have on the share price?

Bigger players out there I would have thought buying / selling. What do they know? To be determined.

[Beagle]

I have talked to lots of people new to shares who all say "buy AIR, Govt won't let them fail" but they don't realise that the Govt might not (probably wouldn't if it came to that) pay them their $1.25 if they took over.
The people think they can't lose, they don't understand that they can.

The last bailout was at 25 cents, not $1.25. History has an ironic way of quite often recurring.

[dobby41]

The last bailout was at 25 cents, not $1.25. History has an ironic way of quite often recurring.

I was talking about the price it is now - people (new to shares) seem to think their investment is safe when it isn't.

[Beagle]

I was talking about the price it is now - people (new to shares) seem to think their investment is safe when it isn't.

I couldn't agree more. No question the effect on AIR's business and likely effect going forward for the foreseeable future has been and is highly likely to be extremely serious, to put it mildly.

[RTM]

I couldn't agree more. No question the effect on AIR's business and likely effect going forward for the foreseeable future has been and is highly likely to be extremely serious, to put it mildly.

So AIR steady for a couple of weeks in the mid 120's....what are we missing or is this as bad as it gets ?
Doesn't add up....as someone said way above.

[k14]

So AIR steady for a couple of weeks in the mid 120's....what are we missing or is this as bad as it gets ?
Doesn't add up....as someone said way above.

Yes, doesn't add up at all. Seems they have tweaked their domestic schedules going to at least July now. Had booked domestic flights for early July back in Feb and just yesterday had the confirmation for schedule change come through. Have been re-booked on slightly earlier flight at no cost to me. So I guess they are heading back towards the new normal, how this plays out is anyone's guess?

[Beagle]

So AIR steady for a couple of weeks in the mid 120's....what are we missing or is this as bad as it gets ?
Doesn't add up....as someone said way above.

There are many shares than confound me with the way they have bounced back off their 23 March lows with apparent wanton disregard for the underlying effect of a new economic reality confronting the company but none more so than AIR. How can a company retaining 75% of its workforce and 100% of its equipment but doing just ~ 10% of its business for the foreseeable future survive in its current form ? The answer clearly is it can't. The second round of wage subsidy will help to some extent but its literally like putting a band aid on a cancer.

Until there is widespread availability of a vaccine people en-masse will deem it unsafe to fly and flying will deteriorate (especially without Koru club access or any inflight service) to something one endures if they must. Sit there with your face mask on, no inflight magazine, no food, water or even a boiled lolly, not even any trolley dolly eye candy...the public response will be, no thanks, I'll drive.

A massive capital raise is an absolute certainty in my opinion...there is simply no question in my mind as to whether they can get through this without one. Timing and pricing are the only unknowns.
History suggests ( post 9/11 capital reconstruction) that the Govt will wait until minority shareholders equity has been almost expunged and then they will leverage their balance sheet to rescue the national airline in the national interest. I see no compelling reason why it will be different this time.

Minority shareholders appear to be on their very own version of a one way financial trip to Mt Erebus. I've seen some photo's of the passengers on that trip and they looked very happy half way there...and we know that didn't end well. Of course when the forward terrain warning system starts sounding (woop woop, pull up, pull up) the Govt will step in before any actual financial crash, but not before they have too. That's how I see it anyway... If others see it differently, good luck to them, I think they'll need it.

[Sideshow Bob]

Meanwhile on Sharies Facebook page, new post today:

"

Air NZ not improving much. Anyone worried?"