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Taking on debt for cashburn is not a good thing but in fairness they are doing everything they can its hard with that covid 19
I always felt airlines should never pay dividends or do buybacks I understand why they cant back away from Airbus orders thats the problem only for that they would be fine
Yes my interest I have put options for price to be lower strike price on them is 700 Honestly i see a company taking on to much debt a lot of things wrong and cashburn is to high ,its actually worse than I thought but I could be very wrong and it keeps going up
The Market better like this because. I dont like the casburn at all think its on low side I am thinking due to refunds estimated at 50% and taking on to much debt but guess I am wrong a lot wrong the smart guys in city like this thats what counts up it goes for now .
Pilots and cabin crew employed in the UK by the struggling airline Norwegian Air Shuttle have been told they will not receive their April salary because the airline does not have the money to pay them.
The airline asked its 1,000 UK air crew to accept significant pay cuts or redundancy at the end of March but workers have been informed that the airline has “no readily available funds to pay any employees on this coming payday” on 25 April.
The company intends to apply for the UK government’s furlough scheme to cover 80% of staff wages up to £2,500 when it opens on 20 April but does not have the funds to pay workers in the interim.
In order to unlock state aid from the Norwegian government, the low-cost carrier needs its creditors to approve its rescue plan, which proposes converting 44.5bn kroner (£3.3bn) of debt into equity while issuing new shares, almost wiping out the value of the company’s current shareholder base.
The memo was sent to workers by OSM Aviation UK HR, a crew management company that directly employs Norwegian’s UK crew and is half-owned by Norwegian.
Wizz Air chief executive Jozsef Varadi and the head of the industry's global trade association both said single-aisle planes may be required to leave the middle seats on each side vacant to allow a degree of "social distancing" aboard.
"We would basically be blocking a third of the airplanes," Varadi told Reuters in a telephone interview. "A 180-seater would become a 120-seater."
Beyond the open-ended lockdowns and travel bans that have brought air travel to a near-halt, deep uncertainty remains over the pace of an eventual recovery and the potential for lasting restrictions that could pile up yet more losses.
Raising its coronavirus impact forecast to $314 billion, the International Air Transport Association described "worrisome" signs of governments "doubling down" on international travel restrictions even when lifting lockdowns - citing developments in China and South Korea
This company will be totally fine but the equity is not safe and the same with most of the other airlines its 6.90 now .An example look at house building stocks from 2007 look at them now the companys are fine the equity holders were destroyed now airlines are in the eye of the storm and the equity will be destroyed there is no way for it not to. If this grounding lasts to end of May how can the equity hold up thats six weeks from now and if they start off slowly in June are we still looking at 6.90 share price thats 2.7b value right now I can see a 1.35b company in late june with more debt thats 3.45 per share and that will be holding up well at that and then it could be a buy .
100% airlines will survive and most of us we will all fly again. But as for the equity in airlines most will convert debt into equity, and also raise some new equity, wiping out much of the todays shareholders how can they survive otherwise . 2.3 billion is no good if you are not in the air simple as , For instance as an example RBS was 6000 on Feb 2007 by Feb2009 it was 200 and its still around today and doing ok but no good if you owned it at 6000 in FEB 2007
Countries in the European Union are being warned to keep their borders closed until September by key player, France.
It comes as France told EU leaders this weekend that it would maintain strict border controls until October 30.
Meanwhile, French president, Emmanuel Macron, has called for external borders with the passport-free Schengen zone, of which Britain is not a part, to remain closed until September.
Travellers have been warned to put off planning summer vacations by EU Commission President Ursula von der Leyen, who cited uncertainty due to the coronavirus outbreak.
In an interview with German tabloid Bild am Sonntag, cited by media reports, the EU official said she would “advise against making such plans,” adding that, “no one can make reliable forecasts for July and August at the moment.”
Easyjet cant afford a Spanish lockdown or for that matter other airlines cant either . Cant understand how shareprice is holding up with massive downturn coming am I wrong in thinking this is a 2 to 3 pound share price its not going bust I think .
Taking out more debt to fund a grounded airline is dangerous but they had no choice now they have rolled the dice on Covid 19 and flying start dates so where the share price goes nobody knows up or down I am saying down .
If we estimate 30m cash burn per week for April and May also 600m in refunds in same time frame as they are doing some refunds not for all and doing every effort not to pay as seen on social media complaints. That comes to 840m without counting any monies to Airbus on non moved orders that leaves 1.46b now lets say they start off slowly in July and Aug and burn through another 700m that leaves 760m still not accounting for Airbus or any unforseen costs they are in deep trouble and not only Airline in trouble (In normal times Easyjet is a great company) cant see this holding up and equity not been destroyed like the banks in last downturn .The owner is right they will run out of money.If Covid 19 stops and flights back to normal in june or close to that everything will be is fine
Its a good bargain if we have every detail .How much are they paying to Airbus in next few months How much are the refunding for grounded flights what is current cash burn per week and when flights will start early June is only around 7 weeks a way what will revenue look like if its say of 25% of 2019 they are in real trouble they are worth 2.7 billion at 6.8 a share I am looking at a 1.5 to 1.7 billion airline with a bigger debt burden so I think you are looking at buying in at 3.5 to 4 per share thats the new normal for easyjet .As for balance sheet unencumbered assets like planes will drop a lot in value so book value of company will also drop if you are buying this long to go up use puts options for protection on way down as this is high risk .Social media is awash with people looking for refunds thats is akin to a run on the banks we seen in last downturn as the 2.3 billion cash on hand is including refunds the longer they stay grounded the more trouble they are in
i bought more puts cant see much flying in june either and they will have to start paying some refunds all these airlines are going to be smaller going foward easyjet will survive but as a much smaller company . Stelios haji-ioannou looking for soundbites the board will not touch more planes from Airbus simple they will try to delay refunds to customers, but problem is a pure destruction of the flying industry
Although not exactly in a comfortable position, IAG is also not shaking in its boots and praying for a miracle. 75% of the group’s cash in the bank comes from booked tickets on canceled flights; that’s around €3.5billion ($3.8 billion) according to their end of year accounts for 2019.
Air France-KLM is also in a relatively strong position in that the group could technically find the cash to refund all pre-booked tickets. But it would wipe out 55% of its bank accounts.
However, not everyone is in such a strong position. easyJet just secured a £600 million loan from the government, and it’s a good job too. easyJet’s sold tickets cost 8% more than it has in cash. No wonder it’s trying to promote rebooking rather than refund.
Airlines flying in European air space will not have to pay charges to air traffic controllers until later this year or early 2021 thanks to a relief package brokered by Eurocontrol, the Brussels-based intergovernmental organization that coordinates air traffic flows across the region and collects route charges
Consumer organisations say some major airlines are already flouting the refund rules, obliging customers to take vouchers.By some estimates, a prolonged shutdown would make about 3.5 billion euros ($3.90 billion) of Germany's Lufthansa revenue eligible for refunds in the second quarter. Easy jet will have to refund a lot of money
easyJet and BALPA have collaboratively reached an agreement on furlough arrangements for its pilots. The agreement will be effective from 1 April 2020. Last week easyJet announced it had reached an agreement on furlough arrangements for its cabin crew and training instructors. That agreement was also effective from 1 April 2020. whats the cost of this