AIR - Air NZ.

[Beagle]

Now you believe the number brokers give?
When did that change - or is it only numbers you agree with?
PS - I agree with the brokers on this one but you usually don't.

I would not buy the shares at 70 cents. To be clear I believe AIR will incur combined multi year (inclusive of extraordinary items) losses of at the very least the full amount of existing shareholders equity $2 billion as at 31 December 2019 before they are through this crisis. That leaves just brand value, which with the way they have been treating customers lately is disappearing at an alarming rate of knots. I see very little value in the shares.

The above wild speculation of an impairment charge in the order of $1b-$1.2b was way, way off, as I called out at the time.

Air NZ's guidance today confirmed an aircraft impairment charge of $350 - $450 million for the year to June 30.

You appear to need new glasses as quite clearly I indicated my estimate of the bigger part of the hit might be to FY21 financials.

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.

Bubble in real trouble and a goner until at earliest 2021. https://www.nzherald.co.nz/business/...ectid=12340899
If you like it at the current price Jaa, then really get stuck into it and fill ya boots and good luck.

[Zaphod]

Bubble in real trouble and a goner until at earliest 2021. https://www.nzherald.co.nz/business/...ectid=12340899
.

Which is however completely at odds with other articles published which specifically mention the NZ travel bubble. At this point, who knows what will eventuate.

[Jaa]

Jaa - That $70m they mentioned is a non-cash item.

It is non cash at the moment but I imagine like any hedge can be cashed in or used to defray future FX expenses.

[dobby41]

Which is however completely at odds with other articles published which specifically mention the NZ travel bubble. At this point, who knows what will eventuate.

It's been suggested by the people at Canberra Chamber of Commerce that he wasn't talking about NZ and was talking about all other countries.
Who knows.
I wouldn't want a TT Bubble until Aus gets to 0 community cases for a week or 2.

[Snow Leopard]

It is non cash at the moment but I imagine like any hedge can be cashed in or used to defray future FX expenses.

"The Company is now in a position to provide further information on the impact of unhedged foreign currency debt resulting from the de-designation of revenue hedges due to a decline in expected foreign currency revenues"

Bit of a mouthful that one, not sure I quite follow it.
There seems to hedges and un-hedges all over the place that need pruning

https://www.bunnings.co.nz/ryobi-one...r-kit_p0038833

[silverblizzard888]

My valuation for AIR right now in its current state is 55 cents, given the massive decline in business, the currently share price has far more risk than reward for anyone buying or holding at the moment.

[Jaa]

You appear to need new glasses as quite clearly I indicated my estimate of the bigger part of the hit might be to FY21 financials.

Apologies Beagle, think I temporarily forgot about Air NZ's June 30 FY end.

[Jaa]

"The Company is now in a position to provide further information on the impact of unhedged foreign currency debt resulting from the de-designation of revenue hedges due to a decline in expected foreign currency revenues"

Bit of a mouthful that one, not sure I quite follow it.
There seems to hedges and un-hedges all over the place that need pruning

https://www.bunnings.co.nz/ryobi-one...r-kit_p0038833

No idea what "de-designation" means. A quick search led me into the world of hedge accounting...

Much more fun to prune than to account!

[Waltzing]

Does MR B believe the share price will slowly deflate ? with what well over 100 billion in TD attracting nothing much. When will these prices adjust? The current rally seems to have reached its peak. With the US increasing cases are we going to be a retracement sooner than we expect. The new wave of investors may not be predictable and no one has surveyed the investor public yet.

[BlackPeter]

My valuation for AIR right now in its current state is 55 cents, given the massive decline in business, the currently share price has far more risk than reward for anyone buying or holding at the moment.

LOL - I assume this is the top end of the valuation span, assuming everything goes well? Low end for AIR clearly must be zero ...