Originally Posted by
Stranger_Danger
They are both valid points.
To those I would add :
What effect will fuel hedge losses and aircraft lease negotiations have on their profits and financial position?
More flying will see Air NZ eat into those fuel hedge losses faster. +ve
Lower fuel prices in the medium/long term +ve
Supply/demand dynamics will see Air NZ will hold the upper hand in any lease negotiations +ve
When will the rights issue happen and at what price?
A pro rata rights issue won't affect current shareholders so much if they take up their share and/or sell their rights. - Neutral to -ve
A rights issue and/or just a profitable domestic network will allow Air NZ to raise debt and not have to use the government facility. Just as Qantas did. +ve
What impact will competitors having a price war to generate precious cashflow have on an industry with already marginal economics?
What price war? No evidence of one yet. Rather the opposite, airline fares are at historic highs due to diseconomies of scale +ve
How much of the Government loan will be called on, and what impact will this debt have on decisions other lenders make about future borrowing capacity?
The Government loan's availability makes Air NZ more investable not less. Even if as above they don't use it. +ve
What will be the impact on culture and efficiency of 4,000 people or whatever it is leaving the business when it comes to those that are still there?
The effect will be less than the galvanising and efficiency gains crisises tend to produce. Some efficiency gains like training customers to check-in themselves on their mobile phones will produce long term gains. +ve
Has any permanent brand damage been done with the refunds policy?
Overblown. I have always booked non-refundable tickets and had to burn a few in my time. Those are the risks and no one ever offered me a credit. Air NZ have moved to make the credits more flexible and access will improve with the online system. Other airlines are no better if not worse. All will be forgotten by 2021. - Neutral
How many of the early flights will actually generate new cash rather than using up previous credits, given that cash expenses will be created by each flight?
This is a fair point and will be a drag on the turnaround. -ve