AIR - Air NZ.

[percy]

From this mornings The Bull newsletter.
BUY RECOMMENDATIONS

Air New Zealand (AIZ)


TRADE THESE SHARES
The airline has been trending up since August on a brighter outlook. New Zealand Government support for the airline to March 2022 should attract buyer interest. The shares have risen from $1.365 on August 19 to trade at $1.615 on November 11. Increasing COVID-19 vaccination rates across the globe will open more travel destinations in future. I expect the shares to move up to $1.90. AIZ suits investors with a higher appetite for risk.

[BlackPeter]

only takes a lil while for a o'seas airline to set up a new route.... a few months maybe a little longer...

Sure - if they still have enough planes idling around unused and pilots able to fly them. I suspect however that the overall number of planes which can be economically operated did drop since Covid hit (many old planes put out of service for good) ... as well as the number of pilots capable and able to operate them (remember - they need a certain number of hours every year). I suspect as well that the number of trainee pilots dropped and many experienced pilots looked for a safer job during the non flight times.

Lesser planes and a lesser number of pilots might mean that airlines would give new connections to a quite remote destination low priority.

[peat]

Lesser planes and a lesser number of pilots might mean that airlines would give new connections to a quite remote destination low priority.

maybe
I'd logic it the other way, that there is now a glut of planes and pilots lookin for a way to return some capital on their investments.
so ,,,, who knows really eh?

[Beagle]

Any guesses when they will announce capital raising? surely must be soonish..

They're on record as saying ASAP in Q1 2022. They are desperate for a HUGE amount of new capital so ASAP means exactly that and they will try and paint as glossy a picture of the recovery story as they can. Its not for me but for anyone interested my tip is this. Keep a close eye on the NTA to be reported in their half year results in late February 2022 and don't pay a cent more than that figure for the price of any new shares in a capital raise. If they want more than NTA for the goodwill and future prospects, tell them they're dreaming and that philanthropic and investing activities don't mix !

[Sideshow Bob]

They're on record as saying ASAP in Q1 2022. They are desperate for a HUGE amount of new capital so ASAP means exactly that and they will try and paint as glossy a picture of the recovery story as they can. Its not for me but for anyone interested my tip is this. Keep a close eye on the NTA to be reported in their half year results in late February 2022 and don't pay a cent more than that figure for the price of any new shares in a capital raise. If they want more than NTA for the goodwill and future prospects, tell them they're dreaming and that philanthropic and investing activities don't mix !

Currently reported as $0.82 on NZX. AIR Air New Zealand Limited (NS) Ordinary Shares - NZX, New Zealand’s Exchange Also in the last financial report.

Say if they lose another $200m (FY loss was $411 pre tax), then thats another $0.18cps to take off that......

[Beagle]

I am thinking more like $300m in the first half = 26.7 cps and that's just to 31 December 2021.
A wise investor considering a capital raise in say March 2022 needs to also consider the likely loss in the first quarter of 2022 as well, (say another $150m 13.3 cps) so estimated NTA as at 31 March 2022 could be as little as 42 cps. This is all pretty straightforward and easy to understand.

The really BIG QUESTIONS in order of difficulty are:-
What do the losses look like for Q4 FY22 ?
What do losses look like for FY23 ?
Might they break even in FY24 ?
What's a realistic goal for profitability, if any in FY25 ?
When might we get back to FY19 level's of air traffic ?

Those questions look too hard to me. Simply put, in my opinion there are more rewarding places with FAR less risk to invest one's capital.

[dobby41]

Lesser planes and a lesser number of pilots might mean that airlines would give new connections to a quite remote destination low priority.

Cheaper planes and cheaper pilots - watch the routes surge when the people feel comfortable and safe traveling (safe from cancellations).

[mikelee]

don't forget about the recent surge in fuel prices though, which is the 2nd highest overhead for an airline, after payroll

[Sideshow Bob]

Simply put, in my opinion there are more rewarding places with FAR less risk to invest one's capital.

This is the simple crux of it. Endless scenairios on what might happen in the near future, with the only certainty a large capital raise by AIR or huge dilution for minorities.

[BlackPeter]

maybe
I'd logic it the other way, that there is now a glut of planes and pilots lookin for a way to return some capital on their investments.
so ,,,, who knows really eh?

Sure, question is clearly whether passenger numbers will recover faster or slower than pilot or plane numbers. I don't know the answer to that either.

Only thing to consider is - we just learned in NZ what consequences it has to be moved from the front of the queue to the end of the queue (I am talking about the vaccination).

Based on this experience would I suggest it might not be beneficial for our travel, tourism, education and any other industry to first give any other travel destination around the globe the opportunity to get fully served with planes and pilots, before we decide to maybe open our borders and wonder why no planes are left to serve us ...