AIR - Air NZ.

[Zaphod]

Maybe so but keeping 70% of staff when you have 10% of your business left on the basis that you simply hope your business will be back to 70% in two years time looks like a plan destined to destroy a vast amount of shareholders funds in the next two years to me.

Do we absolutely know that they will retain 70% of staff though? This seems to be an evolving situation for AirNZ where, as they have a better understanding of the, further decisions are made. Committing to a figure like 50% seems rash and arbitrary. IMO Consumer would have been better to simply emphasize their concern over reining in costs as best they can, within the context of protecting the consumer.

[Beagle]

Seem Beagle et al have been overly pessimistic, even hysterical. So let me give the optimistic case.

Impressive they have kept the fuel hedge losses to only $90m. Was wondering what the effect of all those reparation and cargo flights was. Even if only break-even they help use up the fuel hedge.

Also impressive they still have $640m in the kitty after almost 10 weeks of severe restrictions and no covenant or near term debt repayment issues. $640m could last 6+ months.

By Nov/Dec:

• NZ sould be at level 1 with no more social distancing or fear of domestic travel allowing the middle seats to be filled and a profitable domestic network to reemerge.
• Tasman and Pacific bubble could be in operation
• Near instant COVID-19 tests both on departure and on arrival could see home quarantine replace quarantine in hotels with bracelets and tracking aps. Have a look at what Hong Kong is doing to see how this could work. Thus allowing resumption of more international flights and greater international demand.
• The efficacy of potential vaccines should be better understood and thus an end date could be in sight (even if still over a year away). The share market is always forward looking.

Under such conditions and with plenty of financial runway things won't look so bad. Air NZ will then be able to reorganise their debt to avoid using the usurious government loan and/or have a sensibly priced pro-rata rights issue if need be.

I sold at $2.98 in late January 2020 and then went short to boot, generating another ~ $1.50 per share in unrealized profit, so far. With results like that maybe I should be overly pessimistic more often
Yes today's cash balance was surprising but then the way they have been disingenuously abusing customers rights lately by promising to issue credits is quite another thing.
It looks like they have burned circa $360m in the last 2 months, so ~ $180m per month. Maybe they can get this down to ~ $120m a month or thereabouts so their $640m might last them almost the 6 months you suggest depending upon how many more expensive redundancies they have to do. I still see a capital raise sometime this year. At what price is the key question.
Too early to talk about losses in calendar 2021 but I think anyone hoping they actually make a profit that year is literally flying that hope on a wing and a prayer.
The size of the loss for the year ended 30/06/2020 inclusive of all extraordinary items is going to be eye watering. I think it will take NTA down below $1 and then there's plenty of losses to come for the rest of this year and probably 2021 as well.

Its not hard to make the case that minority shareholders are in for a very hard landing. Buffet is dead right even if he was very slow to act. This is an industry facing what amounts to an existential threat. Even when this threat is over how long until the next pandemic ? Why would you bother...

[Waltzing]

Well MR B i did not follow you out until 2.0 talking a 1 dollar loss. Profits i had made on OCA. I dont expect to fly to europe again until 2022. But this time on business rather than pleasure. I hope you are right on this one and i agree a cap raise is surely on the cards? Anyone caluclated the likely income for the next 12 months since a vacine wont be available until 2021 for most of the public. Manufactured supply is surely not going to meet demand. Its not as if only people travelling will want the vacine. Thats the real problem and Air travel will return faster than 9/11 if a vacine is out there by 2022. I dont see it as 5 years for travel to return surely 2 and half.

[Jaa]

I sold at $2.98 in late January 2020 and then went short to boot, generating another ~ $1.50 per share in unrealized profit, so far. With results like that maybe I should be overly pessimistic more often
Yes today's cash balance was surprising but then the way they have been disingenuously abusing customers rights lately by promising to issue credits is quite another thing.
It looks like they have burned circa $360m in the last 2 months, so ~ $180m per month. Maybe they can get this down to ~ $120m a month or thereabouts so their $640m might last them almost the 6 months you suggest depending upon how many more expensive redundancies they have to do. I still see a capital raise sometime this year. At what price is the key question.
Too early to talk about losses in calendar 2021 but I think anyone hoping they actually make a profit that year is literally flying that hope on a wing and a prayer.
The size of the loss for the year ended 30/06/2020 inclusive of all extraordinary items is going to be eye watering. I think it will take NTA down below $1 and then there's plenty of losses to come for the rest of this year and probably 2021 as well.

Its not hard to make the case that minority shareholders are in for a very hard landing. Buffet is dead right even if he was very slow to act. This is an industry facing what amounts to an existential threat. Even when this threat is over how long until the next pandemic ? Why would you bother...

Putting the nauseating bragging aside (many people sold in the 290s you know), you are assuming status quo in a very dynamic situation and thus have failed to engage with any of my potentially positive points.

Air NZ saw their revenue start to drop in March and withdrew their guidance on March 9, so I would say its more like $360m over 2.5 months or about 144m a month. So after the cost reductions, maybe a cash burn of $85m a month which gives 7.5 months of financial runway.

I highly doubt by November their monthly cash burn is anything like $120m or even $85m as revenue is already recovering.

[Raz]

Putting the nauseating bragging aside (many people sold in the 290s you know), you are assuming status quo in a very dynamic situation and thus have failed to engage with any of my potentially positive points.

Air NZ saw their revenue start to drop in March and withdrew their guidance on March 9, so I would say its more like $360m over 2.5 months or about 144m a month. So after the cost reductions, maybe a cash burn of $85m a month which gives 7.5 months of financial runway.

I highly doubt by November their monthly cash burn is anything like $120m or even $85m as revenue is already recovering.

You hope for the best yet plan for the worst, oh thats right the Government will not allow the worst so don't have to plan for that. Cashflow wise revenue will recover yet cashflow will lag given how quickly people want to offload their credits. We are not getting the full financial picture for a reason. Headcount numbers have not changed to date from initial number suggested. i can tell you if this was a public list company in the US, with no union contract restraints the loss of jobs would be way higher at the minute. Look at what Qantas has done in comparison even with a unionised work force. There is political inertia.

[iceman]

LATAM files for bankruptcy protection. Not really what frequent travellers between South America and Oceania want to hear, after AIR pulling out
https://www.reuters.com/article/us-l...-idUSKBN2320GT

[Snow Leopard]

You still grounded in South America, iceman?

[Joshuatree]

World of pain for Airlines

German government takes 20% stake in $10B Lufthansa bailoutwww.upi.com › Top_News › World-News › 2020/05/25

[Sideshow Bob]

April Ops stats should be out in the next couple of days - should be interesting reading (in a morbid, red ink way)....

[iceman]

You still grounded in South America, iceman?

Floated more like. But yes still here, until Sept by the looks but need LATAM to keep flying !!