Let's see if SP can drop to 25C. If it does, I may sell my house to buy all AIR shares:)
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Its not going to happen in one day or one week but you will get a very serious belting tomorrow, that much you can be absolutely certain about, unless the company puts its shares in a trading halt or unless the Govt announces a 9 figure support package as a non-repayable support grant. They can afford it as they probably get a total of in excess of $500m per annum out of AIR in PAYE, GST, tax and dividends.
Its time to cough that amount back up Cindy.
Its not the end of the world. The Govt has to bail them out so as critical transport infrastructure is maintained in and to and from N.Z. (for example many essential pharmaceutical supplies arrive via air freight) With the unprecedented cuts coming to services they no longer have a viable business model, that's clear to anyone with an in-depth understanding of this company. They do not have the reserves to survive until a vaccine is developed. The only question in my mind is what form the Govt support will take and when will it be forthcoming ?
Last time in 2001 they waited until the share price was completely in the toilet and just one tenth of what it was before stepping in at 25 cents.
My base case assumption is they will step in earlier this time, perhaps at about 75 cents, half NTA, but anything can happen. The trouble is its sets up a precedent. Where do you draw the line this time ? Help THL as well, what about SKC, AIA, Skyline Enterprises and private successful companies that have been enjoying boom times for years like Real Journey's in Queenstown ? Shouldn't some of these companies have built up substantial reserves to handle a temporary downturn already ? Why should taxpayers step in when they should have built their own financial strength by now ?....talk about a fiscal dilemma !
How did they survive after Sep 11? and oil price over $100 per barrel prior to GFC? and during GFC? It's not the first time AIR face challenges, but they went through and SP reached new high at $3.83 in August 2017.
I love everyone like you, extremely pessimistic, and knock down SP to 25C.
Investment in Ansett weakened their balance sheet but the real issue was the collapse in demand after 9/11. Demand is collapsing worse this time and will be more sustained.
Delta CEO just came out on Friday this week and said they'd never seen a demand collapse like they're experiencing at present, not after 9/11, not during GFC, NEVER before.
Yeah, buying at the bottom of the cycle is smart, that's the one thing we seem to agree on. Good luck for tomorrow.
No worries - the rich and famous are going to be looked after
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