I can't see any directors selling out?
I do see 2 notices of previously employed senior management selling their shares. Possibly they need to pay the mortgage?
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Hmmm well .. still @ 136 pennies to be in the queue for a future pounding & pummeling courtesy of the Beehive crew in near future
that surely gotta make the eyes water ;)
Finally had time to read through the results properly and listen to the analyst call. Seems Beagle you were wrong about lots of things about Air NZ as usual.
1) Capital raise with results
They still have $1.1b (incl the $900m loan) as at Aug 25 and said in the call they want to keep it above $700m. So that's about 4 months of runway left before they need to raise capital depending on how long L2 continues.Quote:
I think the chances of a substantial capital raise at a deeply discounted price being announced contemporaneously with the full year result next week are quite high.
2) Cash burn
This was achieved in the first month of FY21.Quote:
I think they will be doing very well indeed if they can reduce the cash burn to $100m a month in FY21.
July: $85m
August: $108m (with only half a month of normal domestic flying)
They are now predicting cash burn of $65-$85m in a non social distancing month of which $25m in amorisation of the government loan and somewhere north of $25m for capital expenditure.
3) Write-downs
FY20 Aircraft impairment charge ($338 million) for the 777-200s.Quote:
If the 8 777-200's are worth $400m at an average age of 14 years with engines almost written off and airframes around 78% written off, then it would seem likely 7 bigger and more modern 777-300's at an average age of only 8 years are worth quite substantially more, perhaps $600-800m and if they have to be written off in the FY21 accounts that's another massive hit.
4) Flying Jetstar !! / More Competition
Jetstar have now up and stopped all flights twice. Pretty obvious that if you want reassurance that you will get to fly in these uncertain times or be receive a flight credit you should book with Air NZ.Quote:
QAN are vastly better capitalised than AIR and their subsidiary Jetstar have lots of spare planes and crew and I would suggest there is a lot of former AIR customers who have been seriously disaffected by their appallingly customer service in recent months. Both now have bad customer service, why pay more with AIR ?
As for competition, Air NZ are the only ones flying.
I was struck by two things, how well they had brought costs down and how surprised they were by the domestic demand bounce back in L1. They were also intent on maintaining optionality to both scale up and scale down the business as required in case international demand bounced back just as fast.
This was a hallmark of Air NZ over the last 2 decades. e.g. While the 777-200s are written off they have not been sold and can be brought back if needed.
A few quotes, capacity is domestic capacity:
Quote:
Cargo flights continue to exceed expectations, on a revenue basis now equates to ~30% of our previous longhaul business
Quote:
Not only were we operating almost 70% of our pre-COVID-19 domestic capacity in July, we had average load factors of around 80%. Meaning not only were we flying, we were flying at or around optimum capacity.
Quote:
in early August we were also starting to see the return of our corporate customers, at around 65% of pre-COVID-19 levels
So before the COVID resurgence they had real momentum and you can see how much of a spanner in the works the current restrictions are. Their future is tied to NZ's. If we can get back to L1, then Air NZ should survive and revive ok even without much of an international business.Quote:
So we – as of the lockdown we were planning to get to 80% - 90% of pre-COVID capacity quite quickly.
Fill ya boots man, its a screaming bargain. What could possibly go wrong :D and how can you possibly lose :p
i would like to see the op stats and remember we just had lock down to the biggest population hub. If we had a solution like Taiwan then sure i think our lockdowns would have been a lot lighter but we seem to only have one setting and there is no certificate on boarding yet.
Not buying till it starts making a bottom... a net profit bottom.... i mean bottom of the losses that is...
When i see the plane pulling up i might start to trade it...
The lights on the head up are still flashing and the loud sound is the auto pull the nose up alert...
The bit that gets me is that they are going to utilise the govt money. Now lets say they get a good way into that $900m. The interest bill alone will be $81m which is about half of a good year of profit down the drain.... Surely that would be a death knell?
I think its clear enough if the Govt doesn't step in and make changes to their flight path what's going to happen is going to be very ugly.
https://www.bing.com/images/search?v...RST&ajaxhist=0
https://www.nzherald.co.nz/business/...ectid=12360349
The only question regarding a major capital raise is when and on what terms. Anyone in fantasy land that this can be avoided without a "financial Mt Erebus" is kidding themselves.
""financial Mt Erebus" - oh dear .... yes this event is historical in deed and the effect on thousands of staff.
"Surely that would be a death knell?"
can we please get the technical terms correct please...
"Death dive!" or "flat spin!"
well its not quite that bad.
Please forgive my glib comments but i assure you we lost good money on this when the engines ran out of fuel and it started its glide path down...
Lucky we made the lost profits back on OCA and KMD and GMT and now we expect farther profits on ARG and others.
The profit was off OCA to start with.. like parachuting out of one plane and catching another flight out of the air port...
ZOOMing off into the skys again! Sorry about that anyone made 100 + on Zoom? Lucky people...you will have to pay the cullen tax though..and if your trading in that portfolio.
Yes big interest bill coming starting later this week. Big argument i suppose going on about cap raise and government probably thought it could just squeeze the balance sheet and avoid it.
https://www.youtube.com/watch?v=LNmIbSre7Tw - Sums the situation up very well.