AIR - Air NZ.

[kiwijay]

Given Transtasman taxes are about $57, $69 is an absolute steal! What's concerning is that leaves Air NZ with a fare of $12 for a 3hr flight to cover its expenses. I think at this point, they have "committed" planes that have to fly, and they need to fill those last remaining seats to achieve some sort of breakeven and prevent the cancellation (and compensation) of the flight. Pretty concerning as someone that has worked in airline pricing previously.

[Beagle]

Given Transtasman taxes are about $57, $69 is an absolute steal! What's concerning is that leaves Air NZ with a fare of $12 for a 3hr flight to cover its expenses. I think at this point, they have "committed" planes that have to fly, and they need to fill those last remaining seats to achieve some sort of breakeven and prevent the cancellation (and compensation) of the flight. Pretty concerning as someone that has worked in airline pricing previously.

Agreed, that is desperation pricing and shows you how incredibly confronting the problem is.

[biker]

.......... Some of the longest serving senior flight crew are probably skating on pretty thin ice....

What do you mean Beagle? I thought there was some sort of seniority system so in your scenario wouldn’t the shortest serving junior flight crew be the ones on the thin ice?

[Beagle]

What do you mean Beagle? I thought there was some sort of seniority system so in your scenario wouldn’t the shortest serving junior flight crew be the ones on the thin ice?

They may have to cut costs in a really meaningful way.

[biker]

Yeah, right

[Raz]

Given Transtasman taxes are about $57, $69 is an absolute steal! What's concerning is that leaves Air NZ with a fare of $12 for a 3hr flight to cover its expenses. I think at this point, they have "committed" planes that have to fly, and they need to fill those last remaining seats to achieve some sort of breakeven and prevent the cancellation (and compensation) of the flight. Pretty concerning as someone that has worked in airline pricing previously.

Yes scrapping for marginal revenue to minimise losses before cancellation. That is pretty unheard of for airlines (esp. AIR) unless they are moving to a tight spot. That is why accommodation providers provide a forward indicator.

[iceman]

Airlines wrldwide really are suffering. I follow Norwegian (low cost) and Icelandair. (tourist orientated) The former closed at NKK 17.36 Thursday, down from NKK 36.00 last Friday. The latter down 25% this week. We sure are in dangerous territory and this airline business is definitely one to stay away from at the moment

[Beagle]

Yeah, right

Yeah right indeed..."no problem" if the whole country has to go into lockdown for a few months after all AIR has current liabilities of $2.927 billion, well covered by current assets of $1.768 billion...opps oh wait....that's a shortfall of $1.15 billion shortly to be over $1.27 billion when the dividend is paid out

But lets not worry about that...those current liabilities include revenue in advance of just under $1.4 billion so we can take those off, or can we seeing as they are contractual obligations of the airline to fly customers....but how do they fly them if we're all in lockdown ?...they'll have to be repaid as flights are cancelled. No worries as the company has $1b in cash, opps less over $124m after paying shareholders, better make that $877m...so they can "easily" repay those flights. What could possibly go wrong...

Just as well the Govt is there as a backstop isn't it...another bailout potentially coming in a worse case scenario ? At what share price might the new shares be issued ?

Disc: Short - Still the best stock to short on the NZX despite the 24% decline in recent weeks, in my opinion.

[biker]

Yes, all good shorting talk

[Mr Slothbear]

Someones gotta explain how and why transtasman taxes are $57. With the e gates theres not even the need for someone to look at the passports just one person to walk the cute beagle along to sniff and other typical airport costs.

feels weird when these $69 fares are hyped but in europe the fares are much cheaper.

i flew from bremen germany to fez morroco for 10 euro or less than 20 nzd for a 3 hour flight. Granted it was a low cost carrier but this really doesn’t change things like fuel.

i also flew from Bremen to stockholm for 13 euros or about 20 bucks and yes only about an hour flight time but it wasn’t even a special fare just a standard one you could book anytime.

Looks like Transtasman costs need to be seriously looked at and cut down.