AIR - Air NZ.

[BlackPeter]

I ran a quick & dirty value analysis on AIR based on the information available and applied a reasonable discount for safety given the circumstances and came up with a value for buying AIR shares of....

[ drumroll ]

....$0.538.

Also much as paying a dividend is seen as an important thing for many Kiwi companies I think 2026 is too early.

Disclaimer:
Done purely as a theoretical exercise, you will not find me on their share register in the foreseeable future.

Interesting - I would have thought they are less worth (maybe half), but maybe I just require (and therefore need to price in) a longer barge pole to touch these shares (and super long barge poles are expensive ;

I guess it all depends on ones working assumptions re the return of international travel and the development of fuel prices as well as consumer acceptance of higher ticket prices. So many questions, so little do we know.

Anyway - if you are right, rights should trade next week at 0.8 cents each. I reccon they will start higher, but while we know that the market is always right, we know as well that the market has a habit of frequently changing its mind.

[Beagle]

https://www.nzherald.co.nz/business/...PTIJWAGCMQHJY/ Paywalled.

The charm offensive continues.

My thoughts, how do you make a small fortune in Aviation ? Start with a big one

[Balance]

Been lot of activity on ASX

ASX accounts for 44% of total shares traded last 2 days (on NZX and ASX)

Those Aussies are pretty clever

Would not read too much into it myself.

NZX is dead without the Aussie instos.

Just have to watch the moribund turnover on all stocks on NZX before ASX opens - that’s how important ASX is now to the NZX. The real market emerges when the Aussie instos come out to play.

Matter of time before ASX takes over NZX?

[iceman]

A good AIR article from David Hargreaves

https://www.interest.co.nz/business/...apital-raising

[Dassets]

You are higher than me. Looking at the NTA, current and forward losses yet to be built in, normalization of the pax credit approach(and the cashflow hole which impacts dividend recommencement) I would assign nil value to the existing business, no goodwill at all.

When you then look at the Schedule of disclaimers(the only thing missing a disclaimer is the disclaimer and that is arguable) equity holders are taking more risk than the Wright Bros. I come up with 35 cents per share or 105 for three. Yes slightly less than the cash issue but you have to take off investment banking, underwriting etc. I would have thought fees will be $50m.

Here's an idea. Pay the pilots 50% in shares for the next 5 years because they certainly won't buy a share. Other non net income generating higher risk companies do exactly this.

Oh sorry I forgot the contract. Which leads me back to it should have gone into receivership, ditch the leases , employments contracts. Reset for the new business.

As for the three flights a week to New York you can only wonder. Did they update their research to post covid and carbon. Doubt it. Maybe it is to have a good link for the PM To transition to the UN. It seems like the aviation version of Te Huia. Looks good to a 5th(year 11????) form economics class but not many others.

[Beagle]

I like your cynical approach Dassets but I cannot bring myself to pay 35 cents per share, post capital raise.
I think they will burn through that capital faster than an F22 fighter jet on full afterburner, primarily because they did not do the full reset of company expenses this golden opportunity afforded them.

To be clear, this was AIR's once in a generation crisis opportunity to do a full reset but they still have countless numbers of staff earning $300,000 plus with the same level of entitlement they had previously.

It still looks like one of N.Z. most expensive social welfare programs. Only when they get bums on seats in a big way is this potentially investable again and in the meantime anyone paying more than half the capital raise price, (approx 26 cents) is in my opinion putting their hand up to be a person happy to accept they're part of the socialization process of the losses AIR will make in the next few years.

Wait for the crying and screaming to come from the masses when airfares go up to level's where this actually could make money. Anyone expecting cheap domestic flights under $100 each way to anywhere should probably adjust their thinking.

[SPC]

This all part of Labour's charade to have us believe the NZ economy is sound and Robertson's 'got this'. This is 'Te Huia' on steroids (a double dose now with half price public transport fares). Gotta get that billions in Covid loans 'out the door' as Nash would say..

[warthog]

Such businesses need the Sword of Damocles rather than the certainty of a bailout. They go into receivership, and are swiftly purchased by the market at a realistic valuation given required changes to result in a viable business. Valued, productive staff are retained, and dead wood is culled. Instead, AirNZ is now a zombie.

I like your cynical approach Dassets but I cannot bring myself to pay 35 cents per share, post capital raise.
I think they will burn through that capital faster than an F22 fighter jet on full afterburner, primarily because they did not do the full reset of company expenses this golden opportunity afforded them.

To be clear, this was AIR's once in a generation crisis opportunity to do a full reset but they still have countless numbers of staff earning $300,000 plus with the same level of entitlement they had previously.

It still looks like one of N.Z. most expensive social welfare programs. Only when they get bums on seats in a big way is this potentially investable again and in the meantime anyone paying more than half the capital raise price, (approx 26 cents) is in my opinion putting their hand up to be a person happy to accept they're part of the socialization process of the losses AIR will make in the next few years.

Wait for the crying and screaming to come from the masses when airfares go up to level's where this actually could make money. Anyone expecting cheap domestic flights under $100 each way to anywhere should probably adjust their thinking.

[Dassets]

You know it is all a bit of a charade. AIR came out yesterday with a one day only sale across the network ie the day after the rights announcement. I brought a biz fare akl to lax for 6T which the day before was 10t and the day after 8.5T. Going to a windfarm conference which will be interesting. But the point is AIR today come out with oh demand is so good and recovering we are getting swamped. Haha if you sell biz tickets for 6t that tends to happen. Plus you get 10% back in airpoints and a stack of status points. When was that airfare last 6t (ignoring the last 2 covid years)?

[Sideshow Bob]

Even got the agents pumping them......

Flights sell out, agents say demand 'back with a vengeance' | Otago Daily Times Online News (odt.co.nz)