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Thread: AIR - Air NZ.

  1. #17361
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    Quote Originally Posted by Traderx View Post
    This frankly unbelievable SP surely allows AIR to quickly launch an equity raise? What are they waiting for?
    Would have to be backed by the govt to keep their majority stake.

    Maybe they'd rather charge them interest....??

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    Quote Originally Posted by Traderx View Post
    This frankly unbelievable SP surely allows AIR to quickly launch an equity raise? What are they waiting for?
    Agreed. Its a global phenomenon. Airline shares are taking off all over the globe. Investors are "looking through" the Covid 19 pandemic assuming airlines will survive and soon thrive. Time for another Tui...
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
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    Quote Originally Posted by Beagle View Post
    Agreed. Its a global phenomenon. Airline shares are taking off all over the globe. Investors are "looking through" the Covid 19 pandemic assuming airlines will survive and soon thrive. Time for another Tui...

    My thoughts too

    If AIR did not have the $900M Lifeline, Govt majority holder & a strangely allowable ability to legally operate on Retained Customer's Credits - then the whole outfit would likely be insolvent, parked up on the tarmac & potentially staring down the first throws of a Receivership/Liquidation right now - if there weren't strong tail winds ahead..

    (like many of the other poor unfortunate badly affected businesses not hit by Labour's magic gold dust wand are likely facing)
    Last edited by nztx; 06-06-2020 at 01:29 AM.

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    Quote Originally Posted by nztx View Post
    My thoughts too

    If AIR did not have the $900M Lifeline, Govt majority holder & a strangely allowable ability to legally operate on Retained Customer's Credits - then the whole outfit would likely be insolvent, parked up on the tarmac & potentially staring down the first throws of a Receivership/Liquidation right now - if there weren't strong tail winds ahead..

    (like many of the other poor unfortunate badly affected businesses not hit by Labour's magic gold dust wand are likely facing)
    Further major gains on US airline stocks overnight but they're doing on average just 15% of the business they did at this time last year....makes perfect sense

    I remain of the view that its going to be a VERY long time before AIR is flying to most of its former network. https://www.cnbc.com/2020/06/04/covi...vel-again.html

    JetStar will hopefully be back on 1 July. https://www.newshub.co.nz/home/trave...ay+6+June+2020
    Last edited by Beagle; 06-06-2020 at 09:39 AM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

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    Quote Originally Posted by bull.... View Post
    50+% gains since low lol this is insane good if you hold though
    should be big gains monday , air stocks in the US are up 100% this week
    one step ahead of the herd

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    Quote Originally Posted by bull.... View Post
    should be big gains monday , air stocks in the US are up 100% this week

    You're probably right, but there's a yawning gap between the position US airlines & AIR find themselves in.
    As Gregg Foran said last Friday on radio interview, 2/3rds of AIR revenue was International & thats all gone. ( a significant part of that was US routes which won't be back anytime soon, not a lot of profit in Trans Tasman)
    Domestic accounts for only 1/3rd of their revenue so that's all they've got to 'revive, survive & thrive' (nod to the marketing dept) on.
    At mo Domestic is operating on about 30% of normal & they are aiming to achieve 50% before the end of the year.


    There seems to be a perception amongst recent AIR investors that the airline is too important to NZ to be allowed to fail, so their investment is completely safe. This was stated to me again this morning by a recent investor.
    Foran stated AIR will need the Govt loan within months & will need all of it.
    As I understand it, the Govt loan is 'convertible' so if AIR are unable to repay it, the Govt will convert the loan to shares in the remaining 48% on AIR they don't already own, severely diluting the value of other shareholders shares. I suppose the Govt could write off the $900M loan but can't really see that being a politically acceptable option, bailing out private 'wealthy' shareholders with tax payers money when Health Education Housing etc will be crying out for money.
    Is that the way others more informed than myself see it?

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    American Airlines up 100percent plus baby

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    AIR never actually said so but many analysts / commentators have said AIR made diddly squat out of their long haul operations....all their profit was domestic and trans-tasman

    Made heaps of sitting on prepaid fares though
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

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    Quote Originally Posted by Blue Skies View Post
    As I understand it, the Govt loan is 'convertible' so if AIR are unable to repay it, the Govt will convert the loan to shares in the remaining 48% on AIR they don't already own, severely diluting the value of other shareholders shares. I suppose the Govt could write off the $900M loan but can't really see that being a politically acceptable option, bailing out private 'wealthy' shareholders with tax payers money when Health Education Housing etc will be crying out for money.
    Is that the way others more informed than myself see it?
    The government set the terms of the agreement, AIR accepted them. Shareholders were diluted in the last bailout, so I don't see it happening any other way. Obviously they have to start using the loan first, and use it all up. So we just have to wait and see how long that all takes.

    Others mention a capital raise, perhaps they're not doing it because they know the government is going to need to convert the loan and dilute the minority shareholders. Asking them to put money in only to be severely diluted in a short space of time is no doubt on Mr Foran's mind.

    The bottom line is once AIR comes to the end of the loan and may need even more cash, the government can convert, dilute, and provide extra support as needed. The alternative is to let the whole thing fail and all the shareholders lose everything, government and minority shareholders alike. History shows they're not going to let that happen, but it will be a bitter pill to swallow and a lesson learned for some.

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    Quote Originally Posted by winner69 View Post
    AIR never actually said so but many analysts / commentators have said AIR made diddly squat out of their long haul operations....all their profit was domestic and trans-tasman

    Made heaps of sitting on prepaid fares though

    I don't think Trans Tasman was very profitable, too much competition from low cost carriers plus BARNZ (Board of Airline Representatives) says Trans Tasman flight Airport charges, taxes levies & Air Traffic Control charges are too high & make up more than half the cost of the ticket & and airlines will be looking for more profitable routes.
    On other hand, North America, esp Houston Chicago much more profitable.

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