AIR - Air NZ.

[workingdad]

Hi all

Interested to hear what your thoughts are on what the final dividend for FY16 will be given the interim was 10c/share.
Are you also anticipating a special divvy (with/without the sale of AIR's VHA holding)?

I would be interested in hearing opinions on this too.

I think a special divy would be highly likely given some of the commentary from AIR on this.

As for for The final it won't be as much as anticipated a few months ago I don't think. The settlement on the cargo thing is one impact and they seem to me to be keen on keeping the bank balance healthy going forward in anticipation of mitigating increased economic headwinds. At least they will be fully imputated

[Master98]

http://www.smh.com.au/business/aviat...02-gpafuk.html

Air New Zealand still confident of Virgin Australia stake sale despite HNA deal

[Beagle]

Thanks Master98 but can you please post a link that works, I can't seem to make that one work even by cutting and pasting into my web browser ?

Special divvy and VAH sale matter are inextricably linked IMHO.

[Balance]

Thanks Master98 but can you please post a link that works, I can't seem to make that one work even by cutting and pasting into my web browser ?

Special divvy and VAH sale matter are inextricably linked IMHO.

In rugby terms, Air NZ is already committed to the sale process via CSFB (fees only if they get the deal done) and is still working towards end of June 2016.

************************************************** ************

Air New Zealand chief executive Christopher Luxon has not backed away from an earlier forecast that his airline could sell all or part of its 25.9 per cent stake in Virgin Australia by June 30 despite the Australian carrier's surprise share placement to China's HNA Aviation.

The Kiwi airline last month told investors its board ideally wanted to resolve the Virgin situation by June 30, in a move that could result in Air New Zealand paying a special dividend to its shareholders, the largest of which is the New Zealand government with a 53 per cent stake.

"Nothing has changed for us," Mr Luxon told The Australian Financial Review on the sidelines of the International Air Transport Association (IATA) annual meeting in Dublin.

"We are right in the middle of the process and obviously have got to follow it through to its logical conclusion. I appreciate there is lots of speculation but there is a big process that is going to play out and there are going to be multiple phases to it and we are just working our way through that really."
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Virgin chief executive John Borghetti said Air New Zealand, which will have its shareholding diluted as part of the placement to HNA, was not consulted before that deal was struck because Mr Luxon was no longer on the board. Mr Luxon quit the Virgin board in March after making an unsuccessful attempt to convince other directors to replace Mr Borghetti. Air New Zealand then hired First NZ Capital and Credit Suisse to assist it with selling all or part of its stake.

Mr Luxon would not say whether he believed Air New Zealand should have been consulted about the share placement to HNA. "I'm not really going to comment because there is a lot of speculation and a lot of it is not true," he said.

HNA, China Southern and Cathay Pacific are understood to have expressed interest in buying the Air New Zealand's stake. HNA is paying 30¢ a share for the Virgin placement. At that price, Air New Zealand's holding is worth $274 million.

Industry sources said Air New Zealand had been seeking a price of 40¢ per share from potential buyers – a significant premium to a trading price that reached as low as 26.5¢ before the HNA deal was announced – in a move that could have led HNA to deal directly with Virgin.

Options for Air New Zealand include selling the stake piecemeal to holders like Singapore Airlines, Etihad Airways, Richard Branson's Virgin Group and HNA. However, any deal could be complicated by Virgin's capital review process that could result in an equity raising of up to $800 million. HNA has indicated it would like to raise its stake to 19.9 per cent but it is unclear whether it will do so by buying part of the Air New Zealand stake, through an equity raising or through purchases on market or from other shareholders.

Mr Luxon said Air New Zealand would continue its joint venture with Virgin on trans-Tasman routes and cooperation on maintenance and other cost saving initiatives even if it no longer remained a shareholder in the Australian airline. The pair are currently renegotiating the terms of their alliance as part of a normal contractual process.

"The alliance is working incredibly strongly for both Virgin and Air New Zealand," Mr Luxon said. "I think both parties would strongly agree with that. The alliance preceded the shareholding. We have great relationships with the team there. It makes good sense for us to work together."

Air New Zealand is focusing heavily on picking up more Australian traffic on trans-Pacific routes including its relatively new flights to Buenos Aires and Houston. Mr Luxon said 40 per cent of the passengers to and from Buenos Aires were Australians, as were 20 per cent on the Houston route.

Air New Zealand is deepening its alliance with United Airlines through a revenue sharing pact on trans-Pacific routes from New Zealand to the United States. However, Air New Zealand chief strategy, network and alliance officer Stephen Jones said there were no plans to extend that alliance to Australia-US routes in competition with similar pacts between Qantas and American Airlines and Virgin and Delta Air Lines.

"The markets operate a little bit separately," he said. "It is quite a complex thing to be able to do that. So we are very comfortable on the current alliance on the trans-Pacific to New Zealand."

[BC_Doc]

And this is from the Australian Financial Review paid subscription a few days ago about the "blindsiding of AIR" by Virgin...




"Air New Zealand was none the wiser when John Borghetti flew to New York last week to bed down a deal with his new airline partner, China's HNA Group.
Only a handful of people knew that Borghetti had been talking to senior executives at the private Chinese aviation giant about a partnership that will bring HNA aboard Virgin's already-crowded share register with an initial 13 per cent stake.
The spotlight has instead been on who may buy Air New Zealand's 26 per cent stake in Virgin, as well as how much capital Borghetti will have to raise from the existing shareholders as part of a strategic review.
HNA has been interested in Virgin for some time but talks became serious only after Air New Zealand announced in late March it was parting ways with the Australian carrier.


Air New Zealand boss Christopher Luxon quit the Virgin board after demanding Borghetti step down. The Kiwi carrier's decision to review its shareholding in the airline triggered a fall in Virgin's share price. It is understood HNA approached Virgin directly not long afterwards with an offer to join forces.
Talks intensified in recent weeks but it was still uncertain over the weekend when a deal could be completed.
Borghetti and other executives already had their bags packed for the International Air Transport Association (IATA) conference in Dublin this week. Those plans were cancelled after bedding down the agreement on Monday.
Air New Zealand had a hint something was coming but was unaware about Borghetti's new friendship with the Chinese until the announcement was made to the market on Tuesday. The other big stakeholders – Singapore Airlines, Etihad and Richard Branson's Virgin Group – did because they still had representatives on the board who approved the deal.

Air New Zealand will not be happy as the $159 million share placement potentially puts a 30¢-per-share ceiling on the Virgin share price and may complicate efforts to sell its stake.
Borghetti has clearly moved on from his break-up with Air New Zealand.
"This is very big. Securing a relationship with a company of this type and with this credibility in China is massive," Borghetti told The Australian Financial Review.
"I think China is the future for inbound travel and this secures our future."

There is no love lost between Virgin and Air New Zealand. Luxon was concerned abut Virgin's deteriorating financial performance and the balance sheet, while Borghetti is happy to have him off the board.
HNA will be the fifth big airline stakeholder on the Virgin board, including Air New Zealand. Its equity injection into the airline gives Borghetti additional capital at a time when he needs it most, but that does not mean the other shareholders will not be asked to stump up more funds as part of a capital review that is still some weeks away from completion. Citi analysts have estimated Virgin needs as much as $853 million in additional capital.
But for Borghetti, the HNA Group deal is about much more than a capital injection.
The lustre has gone from Borghetti's five-year transformation plan for the airline in recent months at a time when rival Qantas is performing well. Virgin warned earlier this month it would post a loss in the second half and forecast a full-year profit of $30 million to $60 million, well below consensus forecasts at the time of $84 million.


But for Borghetti, the HNA deal is the next chapter in the airline's growth strategy and this time he has done it without having to spend more money because of the equity injection that cemented the deal
The focus has been building up the domestic network and operating international routes that fed into its alliance partners in Europe and the US. Borghetti says the piece that was missing was inbound Australian traffic.
HNA, which has holdings in more than 10 airlines including Hainan Airlines and Hong Kong Airlines, is a private Chinese company, not a state-owned entity. It manages 16 airports and owns ground services, travel agencies and aircraft leasing operations.
Virgin does not currently have any direct exposure to the fast-growing Chinese market and the 1.2 million tourists that visit Australia from there each year. The idea is to establish a code-share alliance, offer reciprocal frequent flyer points and daily flights between Australia and Beijing, Hong Kong and some secondary destinations in China by the first half of next year. It gives Virgin access to the distribution network in China as well, something it could not do on its own.


HNA wants to eventually build up a 19.9 per cent stake in Virgin. It will also have a representative on the board. The share placement dilutes the existing shareholders' stakes slightly: Air New Zealand's stake will fall to 22.5 per cent from 25.9 per cent, Singapore to 19.8 per cent from 22.8 per cent; Etihad to 21 per cent from 24.2 per cent and Virgin Group to 8.7 per cent from 10 per cent.
HNA may buy some of Air New Zealand's shares to get up to 19.9 per cent.
It is still unclear who will buy Air New Zealand's stake and it is interesting that HNA approached Virgin direct instead of going to Air New Zealand which already had its stock on the market. Having yet another alliance partner as a major shareholder will complicate things further but Virgin says HNA has agreed to go along with the outcome of the capital review.
The China deal is a long-term strategic story, although it gives Borghetti an immediate equity injection at a time when he needs it most.


Qantas has its own alliance with China Eastern.



Read more: http://www.afr.com/brand/chanticleer...#ixzz4ATKLeTWn
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[Beagle]

Thanks guys. Safe to say the relationship between Borgatti and Luxon is not presently on a good footing.

[Snow Leopard]

Thanks guys. Safe to say the relationship between Borgatti and Luxon is not presently on a good footing.

Borghetti !

Best Wishes
Paper Tiger

[Gizzajob I can do that]

Borghetti !

Best Wishes
Paper Tiger

Yes, Mr Borgatti drives a Bugatti and Mr Borghetti will eat the spaghetti LOL

[peat]

In response to this post, for those interested go to the Off Market Section, then to page 8 and under the thread R.I.P Moosie have a read of post numbers 35 & 74. The above is saying the same thing in a more subtle way, is this sort of nastiness acceptable?

jeez , hand in your man card Couta.

hows that diversification working out for you ?

[couta1]

jeez , hand in your man card Couta.

hows that diversification working out for you ?

My man card has written on it ' Treat others as you would like to be treated yourself, always showing basic courtesy and respect when it is in your power to do so'