This Delta variant could really throw AIR's recovery plan for 2022 into disarray. I for one will not be keen to travel overseas until it's safe to fly without the hassle of testing before departure and after arrival.
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This Delta variant could really throw AIR's recovery plan for 2022 into disarray. I for one will not be keen to travel overseas until it's safe to fly without the hassle of testing before departure and after arrival.
still short and continuing to build the position.
one of the things I'm done to mitgate risk on this trade is to buy AIA and have so far acquired at 7.10
Can't recall if I posted this but intended to after result and can't seem to search my post on my phone so sorry if I have. Also doing this from memory so nos won't be accurate to nearest 1m
In the accounts are pre paid fares. I estimate up to $300m may have been added since balance date due to aussi closing then nz closing. In total add that to short and long term prepay about $1.5bil. Revenue for year was $1b ex govt freight subsidy. Routes are pared back. Now look at non covid year rev for some guidance
Rules for prepaid are to be spent within 12 months and flight within 24 months from original post partum.
Looking forward at the schedule, work in seats and miles flown etc etc I cannot see any chance of these pre paid being able to convert anywhere near all. This is assuming no other flights are booked by other travellers in a year and maybe in 2 years. That is no room for other pax.
So this brings on another problem. AIR has been selling tickets that if a freeze came on they could not possibly honour the offer of a credit as the option for non flight Problem for an airline that has special provisions under commerce legislation ie utilities etc have special protection for consumers.
Insolvency. With the govt saying situation not stable enough to support cap raise plus this pre pay issue let alone possible ComCom action why are these directors pushing on? Have they been given any representations of immunity from enforcement action by govt?? That is my only guess cause I cannot understand why they are continuing.
See those credits really have to be covered for 2 reasons. 1 massive amount of voters. 2. Massive customer base to avoid screwing.
Problem is I cannot see how they can deliver for years. They need cash paying customers to pay the costs to run future flights as people flying on credits have had their cash to pay costs yesterday.
Btw cash holdings are low cf normal balance sheet. The ratio of pre pay to rev is a record by a huge margin. Also when you look at international comps for those ratios you see AIR is an absolute outlier. This is bad news for those directors because it is a clear sign the business is operating way outside norm. Then we get into reckless trading triggers........ hasn't that horse run around the track a few times already??
All good points.
Also, I think AIR are doing enormous damage to their goodwill with the way they are treating their customers. I had experience recently where I booked a flight for family NZ to Australia for end of October and get an email a few days ago saying that 'due to unavoidable operational issues' our flight had been moved forward a whole day - ie one day of our holiday has just been 'disappeared' - no mention about the fact that we had pre-paid accommodation for the night that we will no longer be able to use. So I cancelled the reservation, and get this - I can only get a credit, not a refund. When the whole problem is that AIR is failing (so that they can max their profits) to provide the contracted service- it is disgraceful and won't be easily forgotten by me at least.
As to all of those credits, an easy solution for a near monopoly, just double the price of the tickets and effectively make people with credits pay again for their trips
Some good but rather sobering observations Dassets.
I think the other big elephant in the room is in regards to Airpoints. Normally a healthy profit centre for AIR. But now more than ever, a rather big noose/liability for them. Especially as members are more likely to redeem them rather than paying cash for flights, further exacerbating the cashflow crunch.
I'm sad to say, last year I decided to convert a good chunk of the hard earned points into other goods & services. My view was "1 in the hand is worth more than 2 in the bush".
At the stroke of a pen, loyalty points can be "re-valued", further diminishing customer trust & loyalty. It's happened before and quite possibly will again?
Ok I missed the airpoints. Haven't got my computer to check the note so if the airports liability is there can you post the amount. That will mean that basically all the increase since 2020 to 2021 will be credit I would think because not much flying to earn them and non flight airpoints aren't much. Also I would guess that airpoints that were stored will have been reduces alot as people brought ginzu knifes or whatever. I know mine have gone from 1200 to 600 by buying a couple of flights.
So I guess airpoints way smaller. Doesn't really change my point imo. $100m between friends not going to change things
When AIR was on its last legs at the turn of the century and days before being resuscitated by the government they were reassuring the market ‘we’ve got a billion in the bank, no worries’
Of course it was mainly pre-paid fares
Heard them say that quite often over the years and always laugh
They probably don’t even have half a billion in the bank now …so things must be pretty dire …but no worries as history repeats itself
Exactly it has been already spent and that was at 30 June. Note 14 has pre paid at 773. Down from 2020 and that makes sense because all forward bookings classify as that. But I am talking about credits not forward bookings in bau. They still need to be booked. Really note 14 should be expanded. Auditors should have been on yo yesterday as the make up of numbers has changed.
So add in post balance say 1bil. That only brings me back to 1 year of seats required to use over 2 years. Not enough cash from New fare paying pax to operate anyway
Yeah if my memory serves me correctly they bravely spouted out that nonsense just a couple of weeks before they milked shareholders dry with a massively discounted rights issue in 2001.
The new generation of suckers lining up are either blissfully ignorant or are trying to con themselves that history never repeats. https://www.bing.com/videos/search?q...B0F8&FORM=VIRE
"milked shareholders dry"
slightly distressed asset then... um..it will be a hand crank landing gear then..
probably why people are not sticking around if better opportunities present itself
if the dilution comes then imagine the effect on the SHAZ as there equity disappears... first time investors for many.
Lets hope for a second time in a life time destressed assets purchase arrives. SKT prices would be good.