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If the next published flight stats do not show growth approaching the 40% level, then there will be alarm bells. If the US routes haven't opened up BEFORE the start of Q4, then there will be a fund raiser in the market. This is a short term trading share now with a lead up to Q4 being the time to stick with it or pull out. Will IAG spin of the burdensome BA with its huge pension deferrals and delayed recovery and concentrate on the better performing airlines in the group? Whilst it might be unfair on BA how it is being impacted by the travel bans, business is business.
For me, the only money making opportunity is to be in a week or so ahead of an announcement [or strong rumours] that the transatlantic routes are opening up for BA form UK/EU to US. It will spike but then drop back significantly as Q4 gets underway irrational government decisions on both sides of the Atlantic and form the EU continue. The bringing forward of the cash burn deadline to Dec 2021 rather than the previous summer 2022 despite big cost savings which are hiving to continue is not looking good for the near term. IAG is on the cusp of trouble. It is hurting with the travel restrictions and BA is the mill-stone. Not one for long term holding especially since they are wedded to the costs of the environmental crap rather than calling it out. In the longer post pandemic term travel is going to be crippled by all that stuff anyway so airline stocks will certainly not be in any long term income portfolio for me.
I think this is gonna end up blue today. Its not as bad as i thought, challenges are there but i think we will see it picking up till dec 21.
BaldEagle, the weaker airlines should fold, but as we know, there will be state aid ignoring trade rules and so the position the likes of BA are in will continue, where there is no state aid in comparison to other airlines. It puts the group at a disadvantage. UK government just doesn't have the aggressive attitude and instead believes in playing by the book.
BB, all the airlines are in the same boat (or should that be airplane!!). The weaker airlines will fold. IAG has a buffer that gives then breathing space but even that is finite. There will come a point where the message to politicians is simple...unlock or lose the passenger airline business.
Airbus & Boeing must be really suffering.
"In the event that such a scenario were to occur, the Group would need to implement additional mitigation measures and would likely need to secure additional funding over and above that which is contractually committed at July 29, 2021. "
It is a clear, plain, blunt warning, further rights issue on the way and it will be well before December. If the Q4 flight prediction is not getting towards 80/90+% pre-pandemic levels, then you have been warned. There WILL be a rights issue in Q4.
"the Directors have a reasonable expectation that the Group has sufficient liquidity for the going concern assessment period to December 31, 2022"
This should be of a little concern, previously the group was saying it had more than enough cash to see it well into 2022 if lockdowns continued. Given the increase in flights didn't rise even 1% between Q1 and Q2 and the expected increase for Q3 is well behind competitors, this isn't a very strong base to work from. As I study the text, I am getting a between the lines warning, IAG is holding on but travel restrictions are burning out the business quickly. There is a lot of shifting of chairs on the deck trying to reduce costs here and there but it won't amount to much with most of Q3 lost due to US routes remaining closed.
IAG will continue to lose money until the world is sufficiently vaccinated to allow foreign travel to return to somewhere near 'normal' numbers...we ain't in that situation yet. The SP is probably more attuned to that unlocking than any profit & loss (we all knew there was gonna be a loss). The UK has allowed fully vaccinated US & EU travellers to arrive without the need for quarantine, perhaps when the US reciprocate it will be a sign that the great unlocking has begun. Problem is that countries around the world are at different stages in the pandemic/vaccination story. If the UK unlocking is successful perhaps it will be seen as a sign that we can learn to live with the virus.
don't take it out on me nothingforever, sorry your expected news is not the bells and whistles you want to see but it isn't my fault. The company has not issued a forecast, others have, the expected increase in business is less than others have put in their news statements. If you want to hit out at someone with knuckle draggin frustration, aim it at IAG.
EZJ is the better bet imo.
Unfortunately, because of the way the iis computers keep trading all travel stocks as a block, the rest of the sector is dragged down by IAG statement.
No 'however's in the summary. Grammatical 'however's are to be expected, but there is no 'however' leading to an announcement needing more cash. They have just enough cash to remain solvent but there is no future prediction so the probability of of a further fund raise is certainly getting closer.
pre market is down, so hold onto your Butts for some rapid turbulance
Getting tired of reading big blue’s nonsense crap. It’s like reading a child who just learned to write and enjoys writing no matter what
Also very impressed with Iberia, for the second quarter actually had more passenger revenue than BA, 470million against 424. never underestimate a company that has true global reach.
"At the 30th June the group's liquidity was 10.2 billion with a significant improvement in operating cash flow compared to previous quarters."
"Under all the scenarios modelled, the group's limited financial covenants are forecast to be met."
"The directors consider that the group has sufficient liquidity to continue its operations in the foreseeable future."
I am happy with these figures and it is my view so will the market, better than expected.
"No 'however', so they have avoided that one. "
Erm, yes there is......in google browser, open FIND, type in however, then type in loss or any other word you want to find.
No 'however', so they have avoided that one. BUT, there are a lot of deferred payments, there are some heavy obligations to be paid and perhaps the bit that made me most concerned,
"Given the uncertainty over the timing of the lifting of government travel restrictions and the continued impact and duration of COVID-19, IAG is not providing profit guidance for 2021."
Uncertainty is a bad, bad environment for business to operate in and if IAG is unsure and hesitant to give forecasts then why would anybody expect the market to have a positive [or negative] forecast. A desire to raise the flights from 22% to 45% compared to a former period which was already low is vulnerable. IAG is basically saying they are not confident of the business picking up in any meaningful way and there is no forecast as to when it will.
City Am loving the negs.
British Airways owner IAG today plunged to a €2bn (£1.7bn) half year loss as continued travel restrictions continue to batter the airlines group.
liquidity of €10.2bn, while it is currently burning cash at a rate of €190m per week.
Plenty of cash in the bankNo rights issue Good recovery from other airlines in groupCargo up