Yes this virus outbreak is starting to look ugly. Highly likely to affect nearly all tourism related businesses and potentially not limited to tourism. The spread/infection rate of this virus is terrifying
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Yes this virus outbreak is starting to look ugly. Highly likely to affect nearly all tourism related businesses and potentially not limited to tourism. The spread/infection rate of this virus is terrifying
China makes up about 11.5% of NZ's total travel numbers (450k out of 3.8 million visitors), the impact could be quite large.
Not to mention the indirect impact of people travelling less in general out of fear for the virus.
I posted a couple of weeks back I saw AIR as primarily a yield stock with little prospect for capital gain. At that time if I remember correctly the price was in the mid - late 280's. I think in the late 290's now with recent developments some caution is warranted and I see some modest potential downside risk from here so as a capital preservation measure I also liquidated my small position today. It will be interesting to see how Greg Foran gets on with the unions given his reputation for cost cutting. I'll watch from the sidelines for a while.
I feel we have done the correct thing in mitigating an obvious risk Beagle. This virus scare is already having a much higher impact than many realise and selling to avoid a potential loss of capital is neither scaremongering nor panic. In the fairly small company I work for, 10 Chinese workers were supposed to be flown back home next week and 12 flown from China to Argentina for work. Neither will now happen. That’s 66 airfares (3 legs each ) cancelled just from our small company and this time they were all meant to be with AIR. . There will be millions of planned airfares around the World being cancelled in similar circumstances. Remember it’s not just tourists that use airplanes.
Yes, thanks for that reminder Iceman. I feel for you in your position. It must be a very nervous time for you given how closely you work with many people from that part of the world. Best wishes mate.
I had valuation concerns in the high 290's anyway irrespective of this thing. Yes, good pragmatic risk management is neither panic, illogical or scaremongering.
Latest date showed tourism starting to slow down before this scare anyway, (hasn't really been discussed on here before), so I am not so sure on the long term growth story any more. Back to being a pure cyclical and we're now on a down cycle ?
On a brighter note, if they have to shut down all flights to China that's an effective way to sure-up the supply of aircraft to ensure adequate supply on other routes while they continue to work their way at "glacial speed" through what feels like the never ending nightmareliner fiasco.
Time to play the “Significant Items’ trick again.
Some $50m worth this year
The disestablishment of these hedges really expensive eh ...so previous years profits have been ‘overstated’ under of guise of lowering earnings volatility
And most of the proceeds from selling the slot at Heathrow going into restructuring the cost base ...lol
Everybody will say the $30m of restructuring will say non-recurring / abnormal but not really as they are always doing this stuff
http://nzx-prod-s7fsd7f98s.s3-websit...578/315770.pdf
I'm quite surprised this stock hasnt dropped below $2.50 on sentiment alone, shows the strength of the business.
Doubt the $20-$25m reorganisation costs will be the end of it by any means. Wait till Greg Foran gets on board, has his meetings with 1200 senior staff in the first 100 days and we'll see what reorganisation costs come out in FY21.
Coutts, I reckon this virus is going to hit them like a sledgehammer. I wouldn't get on an aircraft for any reason to go anywhere at present.