AIR - Air NZ.

[Beagle]

https://www.stuff.co.nz/business/ind...in-nz--analyst

QAN are vastly better capitalised than AIR and their subsidiary Jetstar have lots of spare planes and crew and I would suggest there is a lot of former AIR customers who have been seriously disaffected by their appallingly customer service in recent months. Both now have bad customer service, why pay more with AIR ?

[kyanar]

https://www.stuff.co.nz/business/ind...in-nz--analyst

QAN are vastly better capitalised than AIR and their subsidiary Jetstar have lots of spare planes and crew and I would suggest there is a lot of former AIR customers who have been seriously disaffected by their appallingly customer service in recent months. Both now have bad customer service, why pay more with AIR ?

Qantas has had just as much negative press over the way they've handled the COVID crisis, about the only thing protecting them is that Aussies are rabidly nationalistic at times.

[Marilyn Munroe]

https://www.stuff.co.nz/business/ind...in-nz--analyst

QAN are vastly better capitalised than AIR and their subsidiary Jetstar have lots of spare planes and crew and I would suggest there is a lot of former AIR customers who have been seriously disaffected by their appallingly customer service in recent months. Both now have bad customer service, why pay more with AIR ?

Propstar wont be back. Its aircraft were clapped out old turbo-prop bangers that Queer and Nasty Airlines operated across the ditch. They tried to sell them, couldn't, so sent them to Aoteroa to extract value from them before they were scrapped.

A recapitalised Virgin(Under Arm Bowlers Division) is more of a threat to Cullen Airlines in my opinion. The spreadsheet jockeys who brought in will be wondering what to do with all the 737-800's they inherited. You don't have to be a genius to work out the conclusion they will come to.

Boop boop de do
Marilyn

[Jaa]

Trust Beagle to focus on an unlikely negative outcome rather than the real, positive news front and center. Investing in NZ would lead to short and medium term negative cashflows that Qantas and Virgin can ill afford and carries the huge risk of a re-occurrence of COVID-19 locally as there just has been mysteriously in Vietnam after 99 days of no local transmission. Also almost impossible to transfer staff with the current restrictions on arrivals that both NZ and Aus have at the moment. I haven't come across David Mackenzie before but Peter Harbison who is very well respected pours cold water on the idea.

This idea that Air NZ is in a weaker financial position than Qantas is nuts. Air NZ is flying in one of the most active domestic markets in the world, are backed by the government and have access to a $900m loan facility when/if required?!? Their latest policies and online tool to use flight credits places them far in front of similar airlines. They are also clearly able to raise capital on the NZX, which now looks like it will happen after the election.

The big news is Air NZ's domestic capacity is increasing to 70% in August according to Cam and is on an improving path. That's a big deal and a clear competitive advantage to Air NZ. All those catchup bookings will be flowing to the bank, offset somewhat by use of flight credits.

[Beagle]

QAN has raised $3,000,000,000 capital already without even tapping the Australian Govt. I think I'll just that number be the reply to your post Jaa.

[Jaa]

QAN has raised $3,000,000,000 capital already without even tapping the Australian Govt. I think I'll just that number be the reply to your post Jaa.

Raising that much, that quickly is a sign of weakness as much as investor faith.

No question in my mind, Air NZ burnt less cash today than Qantas relative to the size of their businesses and will continue to do so for the foreseeable future.

[Beagle]

Raising that much, that quickly is a sign of weakness as much as investor faith.

No question in my mind, Air NZ burnt less cash today than Qantas relative to the size of their businesses and will continue to do so for the foreseeable future.

I couldn't disagree more. I have seen the very strong proactive approach QAN have taken towards cost control and the amount of equity raised places them in an incredibly strong financial position relative to AIR. AIR is weak, has been fumbling and desperately needs to raise capital but at what price will the market support that ?

[Jaa]

Air NZ's operating stats for June bit of a half way house. Loads and yields were ok considering and they have back 26% of their passengers and 44% of domestic revenue seat kms. The real test/surprise will be July's operating results which had the school holidays and no social distancing requirements.

International is now limited by NZ's managed isolation capacity set at 12k a month for the foreseeable future. In June they flew 26k passengers internationally so this will have to decrease especially as the number of outbound passengers is probably decreasing too.

If they can maintain a domestic load factor of around 80% while flying 70% of the domestic network in August they may come close to monthly cashflow break-even depending on the levels of flight credits, future bookings and lease payments. Regardless the trend will be clear.

With the election on Sep 19 and the op stats out near the end of September. That would be a good time to raise capital and restore the balance sheet, with a positive story of 3 months of rising demand and reducing cash outflows under their belt. I would not call that weak, Beagle.

The big risk is a re-emergence of locally transmitted COVID in NZ like what has happened in Vietnam.

[Beagle]

A reality check. AIR flew revenue passenger kilometers in June 2020 (when for the majority of that month we were in level 1) of less than 10% of what it flew in June 2019. Their overheads will be similar to last year. Even if they can get up to 20% of former capacity overall the reality is that total overhead including staff is likely to be circa 80% of what it was. The prospect of a Trans-tasman bubble anytime in the foreseeable future is now looking like a wishful pipedream and there are clear capacity restraints at the boarder restricting passanger repatriation flights.

The truth is Covid 19 looks like more of a problem world-wide than it did a couple of months ago and until there's a highly effective vacine that's widely available the prospect of any meaningful international schedule apart from freight is extremely dim.

I think they will be doing very well indeed if they can reduce the cash burn to $100m a month in FY21. If others think that's an investable proposition for a major capital raise with an unknown timeframe to when the airline might be profitable again...then I wish you luck, you're going to need it

https://www.stuff.co.nz/business/ind...ening-position

https://www.stuff.co.nz/business/ind...aland-ceo-says

[Bjauck]

...
The truth is Covid 19 looks like more of a problem world-wide than it did a couple of months ago and until there's a highly effective vacine that's widely available the prospect of any meaningful international schedule apart from freight is extremely dim...

IATA thinks it will now take until 2024 - another year longer than it originally forecast - until air passenger traffic gets back to pre covid levels.
https://www.voanews.com/economy-busi...onger-expected