AIR - Air NZ.

[Ecks]

I think its extremely unlikely that s single tranche of $900m support gets them right to the other side of this where the airline is profitable again.

Very unlikely, would take 2 or even 3x that amount. Comparison to the NTA to arrive at $0.32 is genius. I only said $0.25 based on what the government paid during the last bailout.

[BlackPeter]

I think its extremely unlikely that s single tranche of $900m support gets them right to the other side of this where the airline is profitable again.

You work hard to make this stock look good : and no, I didn't say that this would be enough money to rescue the airline as is. Just tried to get a house number for a potential takeover value.

But just while you mention it - if we assume the airline is currently (or predictably in some months) as a going concern basically worthless, there must be ways to cut profitable business out of it.

I am pretty sure that they could generate a pretty successful national transport network if they would be allowed to drop all the surplus overhead. They don't even have any competition ...

I am as well pretty sure that they could operate a pretty successful international freight network if they are allowed to drop the remaining overhead. Freight volumes unlikely to drop, would just need to be somewhat re-organised (away from passenger plus freight to pure freight).

Potentially they could split AIR into one or several "good" airlines and a "bad" airline, make money with the good ones and allow the bad one to go into receivership. Similar like they did with banks after the GFC.

No idea, though what this would mean for shareholders - probably nothing good, but as a country we could move very swift to having a profitable national airline again ...

I agree - passenger traffic will take some time to pick up again, but then - it might get up in a way which makes it easier to accommodate. Example - Let's assume for arguments sake that Singapore, Taiwan, South Korea and China do have the virus under control. Give NZ two months, lots of discipline and a bit of luck, than we might be in the same position. Nothing at that stage would e.g. stop these countries to take up passenger flights among them (and with us) and international tourists and students might flow again. Might be even more from this nick of the woods, given that they won't have a lot of other countries to go to.

Obviously - the first passenger flight back to Trump land (or whats left of it) might be a year or two away, but then - who really cares?

Based on above assumption we might even want to keep some of the large long haul passenger planes?

While I agree that the situation for our national carrier as is looks bleak, I don't think it must be desperate. But no, I don't have long enough barge poles to handle this share at the current moment.

[Beagle]

Very unlikely, would take 2 or even 3x that amount. Comparison to the NTA to arrive at $0.32 is genius. I only said $0.25 based on what the government paid during the last bailout.

Yeap, that's how I see it too. Of course the senior air crew on hundreds of thousands per annum want the taxpayer to keep them in the style and luxury to which they've become well accustomed but how long before there's a realistic level of business for those long haul pilot's ?

Today I wandered down to our local beach and looked out across the Manukau harbour towards the Auckland airport...staring at it for ages and enjoying the sun. I was in quite a philosophical mood, still am. There's no hurry to do anything these days is there !

I pondered if the world ever goes back to the way it was where people take flights like I used to take the bus to school as a kid ? I only saw 1 Q300 plane take off in over 45 minutes of watching. Maybe if the world changes forever in some ways its a good thing ? Maybe Kiwi's can go back to places like Queenstown again and enjoy the serenity of the place like I used to as a kid 50 years ago, perhaps that's a good thing that the maddening throngs of tourists are gone so Kiwi's can enjoy it ?

[Beagle]

BP - mate, if burning through ~ $60-70m in cash each week, (my estimate), is not a desperate situation then I am not sure what qualifies ?

Unions are the obstacle to a pragmatic reorganisation of the company...naturally this vested interest group only want to focus on keeping as many jobs as possible and couldn't care less who carries the can for losses in the meantime. Already they're out in the media today saying redundancies should be put on ice until they can be done face to face. Just burn the full $70m per week for another (more realistically another 6-7 weeks ? while this lockdown is in effect), no worries, its not their money.

Shorting a few stocks has been very lucrative this month

[winner69]

Government decrees have rightly or wrongly completely monstered the viability of Air NZ and many other tourism businesses. If Government decree out of the blue eliminated 90% of revenue, most businesses would be stuffed. Charging 9% interest on money loaned rubs salt into the wound. Wonder if this was on their risk management matrix? Can’t see how anything but nationalisation buy out wiping out for minority shareholders is possible unless someone Magic’s up a vaccination asap.

I feel for Air NZ and all their staff and community. However The talk of $1b rainy day fund from Air NZ very disingenuous given their huge debts and lease liabilities.

As said before anytime AIR raves on about a billion in the bank they go broke and need a bail out.

And that huge amount is prepaid fares so not really theirs.

[Baa_Baa]

As said before anytime AIR raves on about a billion in the bank they go broke and need a bail out.

And that huge amount is prepaid fares so not really theirs.

One has to have been around for a few decades to have that insight, Winner has, as have some others. Can't believe this is still trading near a buck, the future SP looks bleak, maybe even a wipe out for minnows.

Not a safe place to be holding unless your a nimble day trader, imho.

[Beagle]

I remember the last time they said they had a billion in the bank, like it was yesterday. The speed at which the bailout was required after that time at 9/11 was breathtaking, just like it was this time that they needed that $900m loan. The difference this time is that with the international network shut down many passengers will be eligible for a cash refund and as at 31/12/2019 prepaid travel was $1.38 billion so I am with Mogul on this and their claim of this money being a decent sized contingency fund paints a deliberately disingenuous picture of apparent prudence and conservatism.

Parking space could be a challenge and who knew each turboprop plane would require 20 engineering hours a week just to be parked up ! Can't help wondering how many engineeriung man hours per week for each jet ? https://www.nzherald.co.nz/business/...ectid=12321321

[winner69]

Aussie paper headline Virgin shareholders face wipe out

I’d say that could easily read ‘Air NZ shareholders face wipe out’

At least the biggest shareholder will end up with an airline ....other shareholders zilch (or a consolation prize)

[winner69]

Very unlikely, would take 2 or even 3x that amount. Comparison to the NTA to arrive at $0.32 is genius. I only said $0.25 based on what the government paid during the last bailout.

Ecks...that 25 cents was really 5 cents

[Beagle]

Aussie paper headline Virgin shareholders face wipe out

I’d say that could easily read ‘Air NZ shareholders face wipe out’

At least the biggest shareholder will end up with an airline ....other shareholders zilch (or a consolation prize)

Big fight shaping up over Govt support for Aust Airlines https://www.abc.net.au/news/2020-03-...y+1+April+2020

I guess the worry is that if Virgin is allowed to collapse then in due course one of its international shareholders will buy the planes from the receivers for pennies on the dollar and with dirt cheap oil and new low cost employment terms from staff desperate to get back into the industry have an unfair advantage over its competitors.

On the other hand it would be hard to make a case that Virgin has been well managed over the years...surely one of only a tiny handful of airlines to make fairly consistent losses in the good times. How all this might affect AIR down the track, who knows ?