Couple of people I know have been allowed to postpone their AIR travel to much later in the year, but they haven't got a refund from their tickets. Don't think there's much refunding going on.
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Couple of people I know have been allowed to postpone their AIR travel to much later in the year, but they haven't got a refund from their tickets. Don't think there's much refunding going on.
This is too pessimistic, lots of people in the last month scrambling to get home. So they will be ok till today pretty much. Also most existing bookings can only reschedule so Air NZ keeps the cash.
Renouncable rights issue the logical path forward with the government underwriting the issue and subsidising some international routes to keep commerce flowing. Who here would invest in a 1:2 rights issue at $1?
That would raise $561m which would plug my modified version of Beagle's loss for 1 year.
See note 9 in their financial statements regarding depreciation.
In brief Depreciation is calculated to write down the cost of assets to an estimated residual value over their economic lives, examples provided....airframes 18 years...engines 6-15 years...
I have already reduced fuel cost by 85%, do you think they can make the remaining flights on fumes :)
Its clear this is a very serious existential threat to the company. It won't take long to wipe out $2b in shareholder's equity unless a really radical approach is taken.
Not me, I like my own back of the envelope calculation and I genuinely think their loss will be higher than $5m per day once they work their way through pre existing bookings which won't take long.
Then there's the question of how long these travel restrictions will remain in force ? https://www.nzherald.co.nz/business/...ectid=12316929
https://www.nzherald.co.nz/business/...ectid=12317079
Oh dear, its just goes from bad to worse. AIR having to refund heaps of the (as at 31/12/2019 $1,380m) in prepaid tickets because of international flight cancellations.
AIR now in a desperate battle for their own survival.
Shareholders will be hoping they are still able to pay out the 11 cent dividend totalling ~ $124m on 25 March. Surely this should be cancelled for the sake of helping the chances of the airlines survival ?
1:1 rights issue coming at $1 with Govt underwriting the issue ? Get in now before the public realise the full extent of how dire the situation is. No point in waiting till the share price is 25 cents or the airline goes broke....or is there ?
It has gone ex-dividend so I would have thought that AIR will be legally required to pay the dividend as those who bought cum-dividend are legally entitled to getting the dividend.
But does not really matter, does it as $124m is neither here nor there when $500m or more capital will be required to stabilize the balance sheet in the short term.
One option is for the NZ government to provide $500m to $750m one year loan via a convertible note issue with condition attached of a pro-rata rights issue to be made on maturity if conditions have not returned to normal.
Bet you that's being considered - hence, the extended trading halt.
Probably one of the safest airline to invest in with NZ government ownership.
They can't pay the dividend if they are insolvent. I remember a company years ago, maybe Fortex/CBL, that had the same issue.