AIR - Air NZ.

[Beagle]

But Percy, why did AIR need recapitalisation in 2001 ?...when you answer that you have your answer why people are nervous.

[percy]

Maybe?
However I see this as a great opportunity for the major shareholders to put VAH on a sound footing.
It is vital for AIR's future.Without VAH Air will go backwards quickly.They need Australia.

[Beagle]

I'm wondering about Virgin's CEO. If he can't make that bird fly properly with the current velocity of tailwinds with existing resources... Will make for a fascinating discussion point at the next annual meeting along with the payback period on those fancy new electric cars.

[mikeybycrikey]

Roger, as an accountant (I think), do you have any thoughts on what VAH means when the company says they are planning to "review of its capital structure"? I'm assuming that they are looking at changing the debt/equity ratio. Is there anything I'm missing here?

I've just downloaded financial report for VAH and going to have a close look through. I'm pretty unclear on whether this loan is a good or bad thing at the moment. Doesn't look like a great sign but I'm not sure we're got enough information to know for sure.

Interesting the see so many holders here bailing out on two events that I don't consider that major (although Virgin could obviously turn into a major issue).

On an unrelated note, looks like oil is back over the $40 mark, up from $30 about a month ago. Highest price so far this year.

[winner69]

I'm wondering about Virgin's CEO. If he can't make that bird fly properly with the current velocity of tailwinds with existing resources... Will make for a fascinating discussion point at the next annual meeting along with the payback period on those fancy new electric cars.

Apparently Virgin fuel hedging hasn't worked for them, esp relative to the gains that qantas/air have been able to capture.

Emphasis seems to be on creating a full service / two class airline to attract the business traveller(from Qantas) -that seems where the cash keeps going

Wonder how Tiger Air going?

[winner69]

Going to be a +ve day for the AIR share price I reckon

[stoploss]

Going to be a +ve day for the AIR share price I reckon

looks like it all the weak holders are out

[Beagle]

I need to spend some more time on this but based on a really quick look at VAH's presentation and financials today for the period ended 31 Dec 2015 I observed :-

1. Still losing money on international flight op's ($30.8m)
2. Tiger Air is barely profitable
3. Their target is to get financial leverage down to 4x - 4.5x by FY17, currently looks quite stretched.
4. $934m equity on total assets of $5,848 so gearing is approx. 84%, a bit less if you offset unrestricted cash against current liabilities like some people do.
5. Unrestricted cash balance as at 31 Dec $544m down from $719m in pcp
6. Current assets as at 31 Dec 2015 $1.5b, current liabilities including unearned flight income of over $800m was $2.36b
7. 89 leased aircraft v 70 owned.

Those are not numbers that impress this bean counter.

As for how much AIR could be on the hook for here to strengthen VAH's balance sheet...having had a quick and dirty look at the balance sheet I'd have to reluctantly now say that the crutch they lent VAH may be just the start of it.

Disc - Still holding one third of original AIR shareholding...clinging on by the skin of my teeth.

[Hoop]

Roger...Our stars are starting to align....That's spooky..eh

[Beagle]

Maybe?
However I see this as a great opportunity for the major shareholders to put VAH on a sound footing.
It is vital for AIR's future.Without VAH Air will go backwards quickly.They need Australia.

Well having now had a quick look at VAH's stretched balance sheet they will get that opportunity that's for sure. I reckon a sound footing is no more than a 2:1 debt to equity and on that basis VAH would need ~ $A1 billion, (AIR's share $A260m or just under $Kiwi300m)..lent them one crutch, convert that to equity and then make it another. Just as well AIR are enjoying the tailwinds and can afford it.

Caveat - this based on a real quick look. Have to find time to run the ruler over it properly really soon.