Originally Posted by
Dassets
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??