The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
A “paid deramper”? Could you provide some evidence for that? I think his assessment is ridiculously pessimistic, but I don’t see any evidence he’s paid to distort the market.
Hi all: Ignore what Yuri writes, he is a paid deramper.
Great post Yuri - thank you!
Looks like it follows TCG path, equity is already negative.
(the rest is not TCG)
a) TUI ends up operating in much higher interest rate environment (right move although they've decreased net debt a bit but IMV it doesn't prevent the outcome, just delays it)
b) operating costs are materially higher (energy and staffing), then booking disturbances (flight cancellations, etc.)
c) liquidity situation gets worse (acid ratio) and I'm pretty sure they can't extend financial cycle anymore further with partners, this will need additional financing.
to get in proximity of break-even point under these conditions they need to increase turnover at least 6-7 fold which is not happening in near-term (1-2 years) especially taking into account looming recession.
another option (scaling down/selling assets) is off the table as it would require significant discount and creditors won't agree to it (negative equity and failed solvency balance-sheet test).
So yes, it most likely to keep bleeding unfortunately (whether or not someone will sign up to save it and at what cost to existing shareholders {e.g. another right issue or debt conversion, etc., debt is very expensive right now and this will worsen soon, especially considering risk premium here} - is probably a different question).
See, that response just isn’t helping. Private jets are completely irrelevant.
And now you seem to think normal people go on holiday 5 or 6 times a year. Come on…
RNS , company upping its stake in TUI , happy to hold.
If it keeps going like this the they might take the company private. It's a different scenario to TCG who I shorted for 6 months as soon as Harriet Green left.
A 25 year career in aviation gives me a good insight into the transition to private jets.
The main problem with the sector worldwide was not putting legacy staff onto furlough but to lay them off with redundancies at statutory minimum or using early retirement for those old enough.
The cheaper staff have now found jobs not requiring 0300-0500hr starts and weekend working. Some are now on higher wages. They wont go back and the legacy staff will never be offered enough.
This all started in the mid nineties with mixed contracts from the ground to aircrew. The unions let it happen as long as the legacy contracts were protected. Covid was the golden goose that kept on giving to aviation management.
There is one solution which even TUI can adopt, go back to the seventies aviation model of lower capacity and considerably higher fares. The masses need to adapt to one trip a year not 5 or 6. Then they can make very good money, especially with more efficient aircraft.
Don't forget the potential impact of industrial action, pay-related strikes etc. If the strikes go on for an extend period, the company suffers, if they pay their staff more the company suffers. It's a dreadful time for employees to be working so hard to line their own pockets. They could prove to be the straw that breaks the camels back. It would just speed up automation and reduce the potential for others to get jobs. Big shot in the foot for the unions and the workforce in my view.
Conspiracy theories about “a force” don’t help.
Irrelevant comments about private jets don’t help. (Seriously?!)
Downward pressure is all about cost of living crisis emerging, risk-off attitude and media hysteria around airport issues.
Is this another TCG moment ?
Share price pattern seems to be following that trend. I remember one of their last dividends was a fraction under the share price when paid. Seems to be an underlying force trying to reduce aviation to a shadow of its former self. Doesn't help when richer members of society use fractional ownership business jets from smaller airports. They couldn't care less if commercial capacity is cut to the bone and fares are jacked up.
The Russian - Ukrainian weekend war that has turned into a political band wagon is now entering its 5th calendar month with no sign of abating. Every wildly optimistic limit buy I have place on other stocks has been hit and we're still dropping.
Sentiment is changing with the realisation we are entering WW3 without the ground battles. This time played out in the political and financial fields. IMHO I have no idea how the next 6 months will play out but one thing for sure, keep some spare cash for rights issues or you will be diluted.