https://www.nzherald.co.nz/business/...ectid=12317117
Trying to get my head around this but if revenue falls from 6 billion to just 1 billion per annum and staff are reduced by just 30%, staff costs come down to $945m per annum, that leaves them with just $55m for everything else. Hmmm...Houston, we have a "small" problem.
On a real quick and dirty look the numbers are really scary.
Revenue $1000m
Labour 2019 less 30% = 945m
Fuel - 2019 less 85% = 190m
Maintenance 2019 less 85% = 60m
Aircraft Operations 2019 less 85% = 102m
Passenger Services 2019 less 85% = 48m
Sales and Marketing 2019 less 85% = 53m
Other expenses 2019 less 85% = 44m (I seriously doubt the above could be reduced by 85% but lets just run with that for the sake of a quick and dirty back of the envelope calculation)
Total Direct Expenses $1,442m
Loss before other items $442m
Other items
Depreciation and amortisation - unchanged 567m
Rental and Lease expenses - unchanged 245m
Losses before finance costs $1,254m
Net Finance Costs - unchanged 368m
Share of earnings from subsidiary - unchanged = (37)m
Net Forecast Loss - $1,585m
I very seriously doubt direct costs could be cut by 85%.
I also doubt revenue would fall by as much as suggested in that article but seriously folks, I just don't see how the airline can survive losing something like $4-5m per day with its dramatically shrunken business but with the vast majority of its fixed and labour costs still being incurred ?
I don't see how the revised business model is sustainable ?
Will await the Govt's support proposal with interest.