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Gasman
Posts: 2202
Joined: Mon Mar 01, 2004 10:06 am

Re: New Zealand Aviation Thread - March 2020

Tue Mar 17, 2020 6:21 pm

Karlos wrote:
Interesting too that NZ has apparently changed the chemical used to clean the tray tables and whatever the new stuff is, it's reaction on the plastic is making them look stained. They went to great lengths to point out that while they look bad they are definitely not anything to worry about.


Qantas, Qatar and Emirates (I'm not sure about NZ) have posted videos on line highlighting the "extra lengths" they're going to to keep their aircraft clean. The irony is of course, that this is basically an admission that the aircraft are flying petri dishes the rest of the time.

Airlines, can we have these standards marinated please? I don't want Covid-19. But neither do I wsnt good old E-Coli, rhinovirus, or influenza when I travel.
 
NZ6
Posts: 1595
Joined: Fri Jan 22, 2010 6:50 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 17, 2020 8:02 pm

Gasman wrote:
Karlos wrote:
Interesting too that NZ has apparently changed the chemical used to clean the tray tables and whatever the new stuff is, it's reaction on the plastic is making them look stained. They went to great lengths to point out that while they look bad they are definitely not anything to worry about.


Qantas, Qatar and Emirates (I'm not sure about NZ) have posted videos on line highlighting the "extra lengths" they're going to to keep their aircraft clean. The irony is of course, that this is basically an admission that the aircraft are flying petri dishes the rest of the time.

Airlines, can we have these standards marinated please? I don't want Covid-19. But neither do I wsnt good old E-Coli, rhinovirus, or influenza when I travel.


Don't be so dramatic.

Higher grade chemicals don't mean the previous ones were substandard it's called taking extra precautionary measures. I've never heard a rumor or 'urban legend' that you can or will you get sick from sitting on an aircraft. They have hospital grade air filtration for starters.
 
Gasman
Posts: 2202
Joined: Mon Mar 01, 2004 10:06 am

Re: New Zealand Aviation Thread - March 2020

Tue Mar 17, 2020 8:31 pm

NZ6 wrote:
Gasman wrote:
Karlos wrote:
Interesting too that NZ has apparently changed the chemical used to clean the tray tables and whatever the new stuff is, it's reaction on the plastic is making them look stained. They went to great lengths to point out that while they look bad they are definitely not anything to worry about.


Qantas, Qatar and Emirates (I'm not sure about NZ) have posted videos on line highlighting the "extra lengths" they're going to to keep their aircraft clean. The irony is of course, that this is basically an admission that the aircraft are flying petri dishes the rest of the time.

Airlines, can we have these standards marinated please? I don't want Covid-19. But neither do I wsnt good old E-Coli, rhinovirus, or influenza when I travel.


Don't be so dramatic.

Higher grade chemicals don't mean the previous ones were substandard it's called taking extra precautionary measures. I've never heard a rumor or 'urban legend' that you can or will you get sick from sitting on an aircraft. They have hospital grade air filtration for starters.


I'm not being "dramatic". Don't be so dismissive.

Firstly, there is no such thing as "hospital grade" air filtration. Aircraft air hygiene is almost certainly better than most parts of a hospital except the operating theatres where the air is replaced every three minutes.

Secondly, people can, and do get sick from aircraft (but likely via the surfaces rather than the air which is what the general public panic about). The few studies that have looked at this show that bacterial colony counts on aircraft cabin surfaces are unacceptably high.
 
NZ6
Posts: 1595
Joined: Fri Jan 22, 2010 6:50 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 17, 2020 8:53 pm

NZ516 wrote:
I can imagine that Air NZ will postpone any further aircraft deliveries for at least a year if not two years. That the reason why is they will want to preserve their remaining cash for the day to day running of the business. They even might need a loan to continue after May. Things are looking very bleak now.


From what I'm hearing there's a 'war room' type situation happening now which is formulating various scenarios and how each one may play out.

Last week the airline was following the 'global crisis' play book. Scaling back capacity. Freezing recruitment freeing up some of the labor liability (excess leave, leave and unpaid leave).

This is now unknown territory. It's 9/11 on steroids. There is no play book and if it remains status quo the airline will run out of cash. Let's be clear, there is almost no cash coming in and you can only freeze or slow some expenditure.

Things going through my head
  • A320CEO - what can be returned to leases and when? owned frames will have no buyers anytime soon
  • 78X - can you delay payments and deliveries? or are you better off trying to bring them online still as they are so much more efficient the the 772
  • How do you fund the above?
  • Where and how long do you store aircraft - it's cost but also need to keep them close to airworthy.
  • When will borders open, 14, 24, 30, 60 or + days. How will this occur? blanket open or region by region or medical certificate required etc. Given the airline suspended flights until June. It gives you an idea of where their heads are at.
  • What will passengers do. What kind of curve does the market follow to recover
  • What will the airline look like in 6, 12, 18, 24 months time.
  • Excess Crew, CSA, Tech Ops, Corporate staff during this time. Redundancy with rehire package or other options
  • NZ and the Government are in talks around a loan/bailout/cash injection.
  • The Government will be mindful NZ has a significant amount of cash available to them so how assistance is offered will be difficult as NZ can't come out the other side with a cash in hand and also assistance.

There are no right or wrong answers. Here's my best case
  • Border restrictions lifted 28 April (post the Easter and School Holidays)
  • Government support, part loan part relief fund for core aviation/trade links to remain open. $500M to $1B
  • NZ removes numerous A320 CEO's from the fleet. Either put into storage or returned to lease.
  • NZ removes some 772 from the fleet. Likely to be around half if not more.
  • NZ delays 78X by at least 2 years and maybe later deferred again.
  • Redundancies occur but much less than 30%. My guesstimate 10-15%. Mainly crew, csa and administration/support type roles. Freeze on digital projects for the foreseeable future.
  • ORD, EWR, YVR, EZE, ICN, PVG, TPE all under review.


Worst case NZ in 100% owned by the Government, bailout to be an essential services airline. Most the fleet sold off and NZ is a domestic airline with flights to SYD, BNE and MEL in Aussie, NAN. RAR, APW and TBU in the Pacific, SIN, HKG in Asia and LAX in America.

As serious and as extreme as this situation is, I still believe my best case scenario is still more likely.
 
NZ6
Posts: 1595
Joined: Fri Jan 22, 2010 6:50 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 17, 2020 9:04 pm

Gasman wrote:
NZ6 wrote:
Gasman wrote:

Qantas, Qatar and Emirates (I'm not sure about NZ) have posted videos on line highlighting the "extra lengths" they're going to to keep their aircraft clean. The irony is of course, that this is basically an admission that the aircraft are flying petri dishes the rest of the time.

Airlines, can we have these standards marinated please? I don't want Covid-19. But neither do I wsnt good old E-Coli, rhinovirus, or influenza when I travel.


Don't be so dramatic.

Higher grade chemicals don't mean the previous ones were substandard it's called taking extra precautionary measures. I've never heard a rumor or 'urban legend' that you can or will you get sick from sitting on an aircraft. They have hospital grade air filtration for starters.


I'm not being "dramatic". Don't be so dismissive.

Firstly, there is no such thing as "hospital grade" air filtration. Aircraft air hygiene is almost certainly better than most parts of a hospital except the operating theatres where the air is replaced every three minutes.

Secondly, people can, and do get sick from aircraft (but likely via the surfaces rather than the air which is what the general public panic about). The few studies that have looked at this show that bacterial colony counts on aircraft cabin surfaces are unacceptably high.


https://p-airnz.com/cms/assets/PDFs/air ... e-card.pdf
Thoroughly cleaning our aircraft and lounges We are taking extra steps to sanitise our aircraft and lounges, which includes introducing a stronger disinfectant product for routine cleaning. Our jet aircraft are also fitted with hospital grade air filtration systems which filter out viruses.

I guess it's just a lie Gasman.

Don't draw a conclusion that when people have become sick it's due to a) their flight b) the surfaces they touched c) how it was cleaned d) the type of chemicals used.

It's more likely caused by the communal areas at the airport. The check-in queue posts which a lot of people touch or lean against, the security trays we all use and share the cafe table or toilets and so on. If not it's someone they came in contact with or something they touched the days prior to the flight.

As I said, just because they're be extra precautions it doesn't mean it's an admission that the aircraft are flying petri dishes. It means they're be extra careful.
 
Gasman
Posts: 2202
Joined: Mon Mar 01, 2004 10:06 am

Re: New Zealand Aviation Thread - March 2020

Tue Mar 17, 2020 9:30 pm

NZ6 wrote:
I guess it's just a lie Gasman.


Yes, it is. "Hospital grade" is not a bona fide quantity. In this case NZ have used it simply to sound reassuring to the layman.


nz6 wrote:
As I said, just because they're be extra precautions it doesn't mean it's an admission that the aircraft are flying petri dishes. It means they're be extra careful.


Why be "extra careful" if existing measures are good enough to prevent transmission of communicable diseases? Because they're not, that's why. It's simply that the consequences of this virus are greater than an ordinary cold, diarrhea, or even actual influenza. In normal circumstances, airlines care less about those illnesses in the interests of making more money.
 
PA515
Posts: 1606
Joined: Tue Nov 06, 2007 6:17 am

Re: New Zealand Aviation Thread - March 2020

Tue Mar 17, 2020 9:53 pm

NZ6 wrote:
A320CEO - what can be returned to leases and when? owned frames will have no buyers anytime soon

Air NZ said they would be paying cash for the four A321NEOs and two A320NEOs that were not leased, and these could later be sold and leased back if required.

The Air NZ 2019 Annual Results Analyst Presentation (Slide 36) says that in 2020 there will be four unencumbered 77Es and 12 unencumbered A321NEOs / A320NEOs/CEOs
The 77Es are ZK-OKB, ZK-OKC, ZK-OKF and ZK-OKH
The four 321NEOs are ZK-NNB, ZK-NND, ZK-NNF and ZK-NNG
The two 320NEOs are ZK-NHB and ZK-NHC.
The six A320CEOs are ZK-OJI and ZK-OJM and four others. It's possible ZK-OJB, ZK-OJD and ZK-OJF have been purchased from the leasing companies and I recall at least one of the later ZK-OX_ aircraft was paid for in cash, but can't find the Press Release.

Regarding the leased aircraft it mentions there are early termination options in FY2020 for two 77Ws and two domestic A320CEOs.
There are three leased 77Ws, ZK-OKN or ZK-OKO, and ZK-OKR and ZK-OKS.
There are four leased domestic A320CEOs, ZK-OAB, ZK-OJQ, ZK-OJR and ZK-OJS. Two of these were being returned in FY2021.

https://p-airnz.com/cms/assets/PDFs/air ... tation.pdf

PA515
Last edited by PA515 on Tue Mar 17, 2020 10:01 pm, edited 1 time in total.
 
NZ6
Posts: 1595
Joined: Fri Jan 22, 2010 6:50 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 17, 2020 10:00 pm

Gasman wrote:
NZ6 wrote:
I guess it's just a lie Gasman.


Yes, it is. "Hospital grade" is not a bona fide quantity. In this case NZ have used it simply to sound reassuring to the layman.


nz6 wrote:
As I said, just because they're be extra precautions it doesn't mean it's an admission that the aircraft are flying petri dishes. It means they're be extra careful.


Why be "extra careful" if existing measures are good enough to prevent transmission of communicable diseases? Because they're not, that's why. It's simply that the consequences of this virus are greater than an ordinary cold, diarrhea, or even actual influenza. In normal circumstances, airlines care less about those illnesses in the interests of making more money.


Hospital grade to me defines the level of air filtration used. Hospitals naturally have a much higher level of filtration than your standard AC and this higher benchmark is defined as 'hospital grade' in layman's terms. What this means or how this is done I don't know. I'm not an expert here. The point is; this high level or 'hospital grade' is the same level or grade as used on commercial aircraft.

https://www.youtube.com/watch?v=ZT-AA4E ... e=youtu.be

Watch this video from the Chief Medical Officer. Watch 0:50 and 1.06 and 1.22 to answer your questions.
 
DavidByrne
Posts: 1666
Joined: Mon Sep 10, 2007 4:42 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 17, 2020 10:45 pm

NZ6 wrote:
NZ516 wrote:
I can imagine that Air NZ will postpone any further aircraft deliveries for at least a year if not two years. That the reason why is they will want to preserve their remaining cash for the day to day running of the business. They even might need a loan to continue after May. Things are looking very bleak now.


From what I'm hearing there's a 'war room' type situation happening now which is formulating various scenarios and how each one may play out.

Last week the airline was following the 'global crisis' play book. Scaling back capacity. Freezing recruitment freeing up some of the labor liability (excess leave, leave and unpaid leave).

This is now unknown territory. It's 9/11 on steroids. There is no play book and if it remains status quo the airline will run out of cash. Let's be clear, there is almost no cash coming in and you can only freeze or slow some expenditure.

Things going through my head
  • A320CEO - what can be returned to leases and when? owned frames will have no buyers anytime soon
  • 78X - can you delay payments and deliveries? or are you better off trying to bring them online still as they are so much more efficient the the 772
  • How do you fund the above?
  • Where and how long do you store aircraft - it's cost but also need to keep them close to airworthy.
  • When will borders open, 14, 24, 30, 60 or + days. How will this occur? blanket open or region by region or medical certificate required etc. Given the airline suspended flights until June. It gives you an idea of where their heads are at.
  • What will passengers do. What kind of curve does the market follow to recover
  • What will the airline look like in 6, 12, 18, 24 months time.
  • Excess Crew, CSA, Tech Ops, Corporate staff during this time. Redundancy with rehire package or other options
  • NZ and the Government are in talks around a loan/bailout/cash injection.
  • The Government will be mindful NZ has a significant amount of cash available to them so how assistance is offered will be difficult as NZ can't come out the other side with a cash in hand and also assistance.

There are no right or wrong answers. Here's my best case
  • Border restrictions lifted 28 April (post the Easter and School Holidays)
  • Government support, part loan part relief fund for core aviation/trade links to remain open. $500M to $1B
  • NZ removes numerous A320 CEO's from the fleet. Either put into storage or returned to lease.
  • NZ removes some 772 from the fleet. Likely to be around half if not more.
  • NZ delays 78X by at least 2 years and maybe later deferred again.
  • Redundancies occur but much less than 30%. My guesstimate 10-15%. Mainly crew, csa and administration/support type roles. Freeze on digital projects for the foreseeable future.
  • ORD, EWR, YVR, EZE, ICN, PVG, TPE all under review.


Worst case NZ in 100% owned by the Government, bailout to be an essential services airline. Most the fleet sold off and NZ is a domestic airline with flights to SYD, BNE and MEL in Aussie, NAN. RAR, APW and TBU in the Pacific, SIN, HKG in Asia and LAX in America.

As serious and as extreme as this situation is, I still believe my best case scenario is still more likely.

I see the trading halt in NZ shares has now been extended to Friday morning. Not surprised, given that they're dealing with a range of complex unknowns which include the disease itself, and also the environment in which they're operating. Talk about NZ selling aircraft is surely highly unlikely - who would buy them at any kind of realistic price when many airlines will also be trying to unload theirs? In that context it may be cheaper to terminate leases early - will be interesting to see.

Any which way, the trading halt is clearly very important. Last trade was at $1.54 (already down from near $3.00) - any guesses as to what they'll trade for on Friday?
This is not my beautiful house . . . This is not my beautiful wife
 
User avatar
QuayWeeAir
Posts: 33
Joined: Sun Jul 09, 2017 12:21 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 17, 2020 11:09 pm

Virgin Australia Suspending All International Flights

https://i.stuff.co.nz/national/health/c ... -grounding
 
NZ6
Posts: 1595
Joined: Fri Jan 22, 2010 6:50 pm

Re: New Zealand Aviation Thread - March 2020

Tue Mar 17, 2020 11:28 pm

DavidByrne wrote:
NZ6 wrote:
NZ516 wrote:
I can imagine that Air NZ will postpone any further aircraft deliveries for at least a year if not two years. That the reason why is they will want to preserve their remaining cash for the day to day running of the business. They even might need a loan to continue after May. Things are looking very bleak now.


From what I'm hearing there's a 'war room' type situation happening now which is formulating various scenarios and how each one may play out.

Last week the airline was following the 'global crisis' play book. Scaling back capacity. Freezing recruitment freeing up some of the labor liability (excess leave, leave and unpaid leave).

This is now unknown territory. It's 9/11 on steroids. There is no play book and if it remains status quo the airline will run out of cash. Let's be clear, there is almost no cash coming in and you can only freeze or slow some expenditure.

Things going through my head
  • A320CEO - what can be returned to leases and when? owned frames will have no buyers anytime soon
  • 78X - can you delay payments and deliveries? or are you better off trying to bring them online still as they are so much more efficient the the 772
  • How do you fund the above?
  • Where and how long do you store aircraft - it's cost but also need to keep them close to airworthy.
  • When will borders open, 14, 24, 30, 60 or + days. How will this occur? blanket open or region by region or medical certificate required etc. Given the airline suspended flights until June. It gives you an idea of where their heads are at.
  • What will passengers do. What kind of curve does the market follow to recover
  • What will the airline look like in 6, 12, 18, 24 months time.
  • Excess Crew, CSA, Tech Ops, Corporate staff during this time. Redundancy with rehire package or other options
  • NZ and the Government are in talks around a loan/bailout/cash injection.
  • The Government will be mindful NZ has a significant amount of cash available to them so how assistance is offered will be difficult as NZ can't come out the other side with a cash in hand and also assistance.

There are no right or wrong answers. Here's my best case
  • Border restrictions lifted 28 April (post the Easter and School Holidays)
  • Government support, part loan part relief fund for core aviation/trade links to remain open. $500M to $1B
  • NZ removes numerous A320 CEO's from the fleet. Either put into storage or returned to lease.
  • NZ removes some 772 from the fleet. Likely to be around half if not more.
  • NZ delays 78X by at least 2 years and maybe later deferred again.
  • Redundancies occur but much less than 30%. My guesstimate 10-15%. Mainly crew, csa and administration/support type roles. Freeze on digital projects for the foreseeable future.
  • ORD, EWR, YVR, EZE, ICN, PVG, TPE all under review.


Worst case NZ in 100% owned by the Government, bailout to be an essential services airline. Most the fleet sold off and NZ is a domestic airline with flights to SYD, BNE and MEL in Aussie, NAN. RAR, APW and TBU in the Pacific, SIN, HKG in Asia and LAX in America.

As serious and as extreme as this situation is, I still believe my best case scenario is still more likely.

I see the trading halt in NZ shares has now been extended to Friday morning. Not surprised, given that they're dealing with a range of complex unknowns which include the disease itself, and also the environment in which they're operating. Talk about NZ selling aircraft is surely highly unlikely - who would buy them at any kind of realistic price when many airlines will also be trying to unload theirs? In that context it may be cheaper to terminate leases early - will be interesting to see.

Any which way, the trading halt is clearly very important. Last trade was at $1.54 (already down from near $3.00) - any guesses as to what they'll trade for on Friday?


Agree with being unable to sell aircraft at reasonable prices for some considerable time. When I say that, I'm essentially meaning long term storage and sold at a later date or sold at whatever market value is to bring in some form of cash.

Truth is, we don't know what the future looks like until we know how long the present goes for.

It's all just scenario planning for now.
 
aerokiwi
Posts: 2788
Joined: Sun Jul 30, 2000 1:17 pm

Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 1:54 am

Are airports waving or reducing fees for parking planes on the tarmac? And how long is it ok to park a plane at, say AKL, given the humidity/sea air? Seems NZ is ok with the 787s on stand for lengthy periods while they undergo engine replacements.
 
smartplane
Posts: 1508
Joined: Fri Aug 03, 2018 9:23 pm

Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 3:31 am

PA515 wrote:
NZ6 wrote:
A320CEO - what can be returned to leases and when? owned frames will have no buyers anytime soon

Air NZ said they would be paying cash for the four A321NEOs and two A320NEOs that were not leased, and these could later be sold and leased back if required.

The Air NZ 2019 Annual Results Analyst Presentation (Slide 36) says that in 2020 there will be four unencumbered 77Es and 12 unencumbered A321NEOs / A320NEOs/CEOs
The 77Es are ZK-OKB, ZK-OKC, ZK-OKF and ZK-OKH
The four 321NEOs are ZK-NNB, ZK-NND, ZK-NNF and ZK-NNG
The two 320NEOs are ZK-NHB and ZK-NHC.
The six A320CEOs are ZK-OJI and ZK-OJM and four others. It's possible ZK-OJB, ZK-OJD and ZK-OJF have been purchased from the leasing companies and I recall at least one of the later ZK-OX_ aircraft was paid for in cash, but can't find the Press Release.

Regarding the leased aircraft it mentions there are early termination options in FY2020 for two 77Ws and two domestic A320CEOs.
There are three leased 77Ws, ZK-OKN or ZK-OKO, and ZK-OKR and ZK-OKS.
There are four leased domestic A320CEOs, ZK-OAB, ZK-OJQ, ZK-OJR and ZK-OJS. Two of these were being returned in FY2021.

https://p-airnz.com/cms/assets/PDFs/air ... tation.pdf

PA515

You are quoting intention written in 2019, projecting 2020.

Some 'owned' aircraft will have fixed charges over them. Some will have fixed and floating charges. The rest are leased. Even lessors take a floating charge over other 'owned' aircraft and assets to cover end of lease balloon payments.

All funding is inter-related. So for example, if a customer's financial position deteriorates to a level where a specific financial covenant on Loan 1 is breached, this potentially triggers a universal covenant breach of all other loans, leases and other accommodation.

What's currently happening in the aviation industry, is to avoid technical and actual breaches, covenants are being revised and / or forgiven. For example, Airbus and Boeing are doing this to protect / enforce orders, as are banks and leasors. But this can only happen for so long, because those doing the forgiving are sooner or later going to reach the limits of their own accommodation.
 
smartplane
Posts: 1508
Joined: Fri Aug 03, 2018 9:23 pm

Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 3:36 am

DavidByrne wrote:
NZ6 wrote:
NZ516 wrote:
I can imagine that Air NZ will postpone any further aircraft deliveries for at least a year if not two years. That the reason why is they will want to preserve their remaining cash for the day to day running of the business. They even might need a loan to continue after May. Things are looking very bleak now.


From what I'm hearing there's a 'war room' type situation happening now which is formulating various scenarios and how each one may play out.

Last week the airline was following the 'global crisis' play book. Scaling back capacity. Freezing recruitment freeing up some of the labor liability (excess leave, leave and unpaid leave).

This is now unknown territory. It's 9/11 on steroids. There is no play book and if it remains status quo the airline will run out of cash. Let's be clear, there is almost no cash coming in and you can only freeze or slow some expenditure.

Things going through my head
  • A320CEO - what can be returned to leases and when? owned frames will have no buyers anytime soon
  • 78X - can you delay payments and deliveries? or are you better off trying to bring them online still as they are so much more efficient the the 772
  • How do you fund the above?
  • Where and how long do you store aircraft - it's cost but also need to keep them close to airworthy.
  • When will borders open, 14, 24, 30, 60 or + days. How will this occur? blanket open or region by region or medical certificate required etc. Given the airline suspended flights until June. It gives you an idea of where their heads are at.
  • What will passengers do. What kind of curve does the market follow to recover
  • What will the airline look like in 6, 12, 18, 24 months time.
  • Excess Crew, CSA, Tech Ops, Corporate staff during this time. Redundancy with rehire package or other options
  • NZ and the Government are in talks around a loan/bailout/cash injection.
  • The Government will be mindful NZ has a significant amount of cash available to them so how assistance is offered will be difficult as NZ can't come out the other side with a cash in hand and also assistance.

There are no right or wrong answers. Here's my best case
  • Border restrictions lifted 28 April (post the Easter and School Holidays)
  • Government support, part loan part relief fund for core aviation/trade links to remain open. $500M to $1B
  • NZ removes numerous A320 CEO's from the fleet. Either put into storage or returned to lease.
  • NZ removes some 772 from the fleet. Likely to be around half if not more.
  • NZ delays 78X by at least 2 years and maybe later deferred again.
  • Redundancies occur but much less than 30%. My guesstimate 10-15%. Mainly crew, csa and administration/support type roles. Freeze on digital projects for the foreseeable future.
  • ORD, EWR, YVR, EZE, ICN, PVG, TPE all under review.


Worst case NZ in 100% owned by the Government, bailout to be an essential services airline. Most the fleet sold off and NZ is a domestic airline with flights to SYD, BNE and MEL in Aussie, NAN. RAR, APW and TBU in the Pacific, SIN, HKG in Asia and LAX in America.

As serious and as extreme as this situation is, I still believe my best case scenario is still more likely.

I see the trading halt in NZ shares has now been extended to Friday morning. Not surprised, given that they're dealing with a range of complex unknowns which include the disease itself, and also the environment in which they're operating. Talk about NZ selling aircraft is surely highly unlikely - who would buy them at any kind of realistic price when many airlines will also be trying to unload theirs? In that context it may be cheaper to terminate leases early - will be interesting to see.

Any which way, the trading halt is clearly very important. Last trade was at $1.54 (already down from near $3.00) - any guesses as to what they'll trade for on Friday?

NZ Government and Air NZ have already both been highly proactive throughout this crisis. Presumably the Government will inject or guarantee additional funds for Air NZ in the next 48 hours, purchase additional shares or appoint a statutory manager (or combination of all).
 
smartplane
Posts: 1508
Joined: Fri Aug 03, 2018 9:23 pm

Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 3:44 am

NZ6 wrote:
Gasman wrote:
NZ6 wrote:
I guess it's just a lie Gasman.


Yes, it is. "Hospital grade" is not a bona fide quantity. In this case NZ have used it simply to sound reassuring to the layman.


nz6 wrote:
As I said, just because they're be extra precautions it doesn't mean it's an admission that the aircraft are flying petri dishes. It means they're be extra careful.


Why be "extra careful" if existing measures are good enough to prevent transmission of communicable diseases? Because they're not, that's why. It's simply that the consequences of this virus are greater than an ordinary cold, diarrhea, or even actual influenza. In normal circumstances, airlines care less about those illnesses in the interests of making more money.


Hospital grade to me defines the level of air filtration used. Hospitals naturally have a much higher level of filtration than your standard AC and this higher benchmark is defined as 'hospital grade' in layman's terms. What this means or how this is done I don't know. I'm not an expert here. The point is; this high level or 'hospital grade' is the same level or grade as used on commercial aircraft.

https://www.youtube.com/watch?v=ZT-AA4E ... e=youtu.be

Watch this video from the Chief Medical Officer. Watch 0:50 and 1.06 and 1.22 to answer your questions.

Hospital grade is significantly lower than operating theatre grade air filters.

OEM's and airlines don't disclose details of the filter grade materials they use, or frequency with which they are replaced, or at what % resistance (blocked), bypass valves open at which point there is only coarse (low grade) filtration.

EASA recommended a few days ago ideally passengers should be distributed throughout an aircraft, with at least a seat's gap separation, or ideally a row empty, so 1/3rd to 1/2 load factor.
 
NYKiwi
Posts: 90
Joined: Tue Jun 12, 2018 1:41 am

Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 4:19 am

I may be an optimist but i cant see NZ shrinking its footprint....yes it will take time to get to where they are say 30 days ago, but the demand will rebound once this all calms over when that is i cant say....being based in NY we are being toldnthe peak may not hit till July so i can see reduction in flights and delay in EWR but surely most of the demand will spring back maybe next summer say.......i.just cant see NZ being domestic and aussie carrier alone
 
DavidByrne
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 4:50 am

NYKiwi wrote:
I may be an optimist but i cant see NZ shrinking its footprint....yes it will take time to get to where they are say 30 days ago, but the demand will rebound once this all calms over when that is i cant say....being based in NY we are being toldnthe peak may not hit till July so i can see reduction in flights and delay in EWR but surely most of the demand will spring back maybe next summer say.......i.just cant see NZ being domestic and aussie carrier alone

This assumes that the economy will rebound quickly, that all the people who lose their jobs will find new jobs, and that people will prioritise flying over keeping some cash for a rainy day - if in fact they have any cash left after this. Once isolation starts to be required, as surely it will be once community transmission of the disease starts in New Zealand, then employers will be laying off staff left, right and centre (just as NZ the airline has already signalled). People will be spending their savings, companies will fold and all bets are off re what the airline will look like in future.

I hope I'm wrong, but if you look regularly at the European media, you get a much better appreciation of how things will probably go in New Zealand, and it ain't pretty.
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 6:57 am

NZ6 wrote:
Gasman wrote:
NZ6 wrote:

Don't be so dramatic.

Higher grade chemicals don't mean the previous ones were substandard it's called taking extra precautionary measures. I've never heard a rumor or 'urban legend' that you can or will you get sick from sitting on an aircraft. They have hospital grade air filtration for starters.


I'm not being "dramatic". Don't be so dismissive.

Firstly, there is no such thing as "hospital grade" air filtration. Aircraft air hygiene is almost certainly better than most parts of a hospital except the operating theatres where the air is replaced every three minutes.

Secondly, people can, and do get sick from aircraft (but likely via the surfaces rather than the air which is what the general public panic about). The few studies that have looked at this show that bacterial colony counts on aircraft cabin surfaces are unacceptably high.


https://p-airnz.com/cms/assets/PDFs/air ... e-card.pdf
Thoroughly cleaning our aircraft and lounges We are taking extra steps to sanitise our aircraft and lounges, which includes introducing a stronger disinfectant product for routine cleaning. Our jet aircraft are also fitted with hospital grade air filtration systems which filter out viruses.

I guess it's just a lie Gasman.

Don't draw a conclusion that when people have become sick it's due to a) their flight b) the surfaces they touched c) how it was cleaned d) the type of chemicals used.

It's more likely caused by the communal areas at the airport. The check-in queue posts which a lot of people touch or lean against, the security trays we all use and share the cafe table or toilets and so on. If not it's someone they came in contact with or something they touched the days prior to the flight.

As I said, just because they're be extra precautions it doesn't mean it's an admission that the aircraft are flying petri dishes. It means they're be extra careful.

I know for a fact that many surfaces on many different airlines are very rarely if ever cleaned and many others not very frequently. Most airlines clean the tray table and the toilets and galleys... that’s it. They pick up rubbish and give the plane a quick vacuum but that means things like armrests, seatbelts, headrests, seats, floor, seat pockets, walls, window shades etc aren’t cleaned after each flight and most not even daily or weekly.
With Covid19 there will be an improvement but still not that much.
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 7:00 am

smartplane wrote:
DavidByrne wrote:
NZ6 wrote:

From what I'm hearing there's a 'war room' type situation happening now which is formulating various scenarios and how each one may play out.

Last week the airline was following the 'global crisis' play book. Scaling back capacity. Freezing recruitment freeing up some of the labor liability (excess leave, leave and unpaid leave).

This is now unknown territory. It's 9/11 on steroids. There is no play book and if it remains status quo the airline will run out of cash. Let's be clear, there is almost no cash coming in and you can only freeze or slow some expenditure.

Things going through my head
  • A320CEO - what can be returned to leases and when? owned frames will have no buyers anytime soon
  • 78X - can you delay payments and deliveries? or are you better off trying to bring them online still as they are so much more efficient the the 772
  • How do you fund the above?
  • Where and how long do you store aircraft - it's cost but also need to keep them close to airworthy.
  • When will borders open, 14, 24, 30, 60 or + days. How will this occur? blanket open or region by region or medical certificate required etc. Given the airline suspended flights until June. It gives you an idea of where their heads are at.
  • What will passengers do. What kind of curve does the market follow to recover
  • What will the airline look like in 6, 12, 18, 24 months time.
  • Excess Crew, CSA, Tech Ops, Corporate staff during this time. Redundancy with rehire package or other options
  • NZ and the Government are in talks around a loan/bailout/cash injection.
  • The Government will be mindful NZ has a significant amount of cash available to them so how assistance is offered will be difficult as NZ can't come out the other side with a cash in hand and also assistance.

There are no right or wrong answers. Here's my best case
  • Border restrictions lifted 28 April (post the Easter and School Holidays)
  • Government support, part loan part relief fund for core aviation/trade links to remain open. $500M to $1B
  • NZ removes numerous A320 CEO's from the fleet. Either put into storage or returned to lease.
  • NZ removes some 772 from the fleet. Likely to be around half if not more.
  • NZ delays 78X by at least 2 years and maybe later deferred again.
  • Redundancies occur but much less than 30%. My guesstimate 10-15%. Mainly crew, csa and administration/support type roles. Freeze on digital projects for the foreseeable future.
  • ORD, EWR, YVR, EZE, ICN, PVG, TPE all under review.


Worst case NZ in 100% owned by the Government, bailout to be an essential services airline. Most the fleet sold off and NZ is a domestic airline with flights to SYD, BNE and MEL in Aussie, NAN. RAR, APW and TBU in the Pacific, SIN, HKG in Asia and LAX in America.

As serious and as extreme as this situation is, I still believe my best case scenario is still more likely.

I see the trading halt in NZ shares has now been extended to Friday morning. Not surprised, given that they're dealing with a range of complex unknowns which include the disease itself, and also the environment in which they're operating. Talk about NZ selling aircraft is surely highly unlikely - who would buy them at any kind of realistic price when many airlines will also be trying to unload theirs? In that context it may be cheaper to terminate leases early - will be interesting to see.

Any which way, the trading halt is clearly very important. Last trade was at $1.54 (already down from near $3.00) - any guesses as to what they'll trade for on Friday?

NZ Government and Air NZ have already both been highly proactive throughout this crisis. Presumably the Government will inject or guarantee additional funds for Air NZ in the next 48 hours, purchase additional shares or appoint a statutory manager (or combination of all).

Rumour mill is saying government to inject $2-3B into NZ. No doubt that will include being issued new shares taking their shareholding up to over 3/4 of the airline. Shares might drop if before that announcement, but after they should go up.
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NZ6
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 7:20 am

Zkpilot wrote:
smartplane wrote:
DavidByrne wrote:
I see the trading halt in NZ shares has now been extended to Friday morning. Not surprised, given that they're dealing with a range of complex unknowns which include the disease itself, and also the environment in which they're operating. Talk about NZ selling aircraft is surely highly unlikely - who would buy them at any kind of realistic price when many airlines will also be trying to unload theirs? In that context it may be cheaper to terminate leases early - will be interesting to see.

Any which way, the trading halt is clearly very important. Last trade was at $1.54 (already down from near $3.00) - any guesses as to what they'll trade for on Friday?

NZ Government and Air NZ have already both been highly proactive throughout this crisis. Presumably the Government will inject or guarantee additional funds for Air NZ in the next 48 hours, purchase additional shares or appoint a statutory manager (or combination of all).

Rumour mill is saying government to inject $2-3B into NZ. No doubt that will include being issued new shares taking their shareholding up to over 3/4 of the airline. Shares might drop if before that announcement, but after they should go up.


That would be good and needed!
 
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 7:39 am

smartplane wrote:
PA515 wrote:
NZ6 wrote:
A320CEO - what can be returned to leases and when? owned frames will have no buyers anytime soon

Air NZ said they would be paying cash for the four A321NEOs and two A320NEOs that were not leased, and these could later be sold and leased back if required.

The Air NZ 2019 Annual Results Analyst Presentation (Slide 36) says that in 2020 there will be four unencumbered 77Es and 12 unencumbered A321NEOs / A320NEOs/CEOs
The 77Es are ZK-OKB, ZK-OKC, ZK-OKF and ZK-OKH
The four 321NEOs are ZK-NNB, ZK-NND, ZK-NNF and ZK-NNG
The two 320NEOs are ZK-NHB and ZK-NHC.
The six A320CEOs are ZK-OJI and ZK-OJM and four others. It's possible ZK-OJB, ZK-OJD and ZK-OJF have been purchased from the leasing companies and I recall at least one of the later ZK-OX_ aircraft was paid for in cash, but can't find the Press Release.

Regarding the leased aircraft it mentions there are early termination options in FY2020 for two 77Ws and two domestic A320CEOs.
There are three leased 77Ws, ZK-OKN or ZK-OKO, and ZK-OKR and ZK-OKS.
There are four leased domestic A320CEOs, ZK-OAB, ZK-OJQ, ZK-OJR and ZK-OJS. Two of these were being returned in FY2021.

https://p-airnz.com/cms/assets/PDFs/air ... tation.pdf

PA515

You are quoting intention written in 2019, projecting 2020.

Some 'owned' aircraft will have fixed charges over them. Some will have fixed and floating charges. The rest are leased. Even lessors take a floating charge over other 'owned' aircraft and assets to cover end of lease balloon payments.

All funding is inter-related. So for example, if a customer's financial position deteriorates to a level where a specific financial covenant on Loan 1 is breached, this potentially triggers a universal covenant breach of all other loans, leases and other accommodation.

What's currently happening in the aviation industry, is to avoid technical and actual breaches, covenants are being revised and / or forgiven. For example, Airbus and Boeing are doing this to protect / enforce orders, as are banks and leasors. But this can only happen for so long, because those doing the forgiving are sooner or later going to reach the limits of their own accommodation.


Even though the information in Slide 36 is as at 30 June 2019, it is still valid today. I am aware that many owned aircraft have fixed charges etc, but 'unencumbered' aircraft do not and these are the 'owned' aircraft referred to in my post.

PA515
 
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 8:50 am

LHR base axing now brought forward to this week. Done, finished. Sad. Looks like they will try to carry on LHR but with 787 at some point until October.
Last edited by Zkpilot on Wed Mar 18, 2020 8:57 am, edited 2 times in total.
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 8:59 am

Has Jetstar cancelled NZ domestic flying from next Monday? I have a ZQN - AKL flight on the 24th and it looks closed for reservations although I haven't received any notification yet
 
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 10:12 am

NZ6 wrote:
NZ516 wrote:

There are no right or wrong answers. Here's my best case
  • Border restrictions lifted 28 April (post the Easter and School Holidays)
  • Government support, part loan part relief fund for core aviation/trade links to remain open. $500M to $1B
  • NZ removes numerous A320 CEO's from the fleet. Either put into storage or returned to lease.
  • NZ removes some 772 from the fleet. Likely to be around half if not more.
  • NZ delays 78X by at least 2 years and maybe later deferred again.
  • Redundancies occur but much less than 30%. My guesstimate 10-15%. Mainly crew, csa and administration/support type roles. Freeze on digital projects for the foreseeable future.
  • ORD, EWR, YVR, EZE, ICN, PVG, TPE all under review.


Worst case NZ in 100% owned by the Government, bailout to be an essential services airline. Most the fleet sold off and NZ is a domestic airline with flights to SYD, BNE and MEL in Aussie, NAN. RAR, APW and TBU in the Pacific, SIN, HKG in Asia and LAX in America.

As serious and as extreme as this situation is, I still believe my best case scenario is still more likely.


I agree with much that you said above re funding and fleet. I reckon quite a few A320CEO will leave the fleet, and a handful of 772. Possible deferal of 781 deliveries. I doubt ORD and YVR would not be recommmenced. The only reason for not recommencing ORD would be if EWR trumps it (lol) and they decide to go with one rather than two destinations. I reckon everything else listed is on the table for review with probable recommencement in time of PVG but not sure about EZE or TPE or ICN.

Your last comment - worst case scenario i think goes a tad too far ....
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 6:00 pm

In recent months there was a lot of talk about Auckland Airport, how much better it would be if it were publicly owned still rather than privatised, but that the horse had bolted on that. I wonder if the present crisis will result in a need for a government bailout and takeover over of privatised airports?

V/F
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 7:35 pm

AMSAKL wrote:
Has Jetstar cancelled NZ domestic flying from next Monday? I have a ZQN - AKL flight on the 24th and it looks closed for reservations although I haven't received any notification yet


Looks like they have closed off all New Zealand domestic flights for April.

With the a320s being cycled via Australia for mx etc, it would be hard for the fleet in New Zealand to keep operating if they stopped there Tasman services.
 
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 8:29 pm

VirginFlyer wrote:
In recent months there was a lot of talk about Auckland Airport, how much better it would be if it were publicly owned still rather than privatised, but that the horse had bolted on that. I wonder if the present crisis will result in a need for a government bailout and takeover over of privatised airports?

V/F


:checkmark: Would ease the parking / storage of aircraft issue. Although I'm hearing AIAL is looking like they'll come to the party here.
:checkmark: Would be a fantastic option for public investment to put cash into the economy.

AIAL will be hurting. They've committed to a number of big projects and a number essential services need upgrades. Just imagine the options a government part ownership bailout could provide. But likewise I don't think we'd see anything significant in the medium term in way of passenger improvements and I think the government would likely sell it's share at a later date anyway.

I should probably acknowledge that the airports diverse portfolio of income maybe the saving grace even though I was critical of them a few months back.
 
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 8:44 pm

NZ321 wrote:
I agree with much that you said above re funding and fleet. I reckon quite a few A320CEO will leave the fleet, and a handful of 772. Possible deferal of 781 deliveries. I doubt ORD and YVR would not be recommmenced. The only reason for not recommencing ORD would be if EWR trumps it (lol) and they decide to go with one rather than two destinations. I reckon everything else listed is on the table for review with probable recommencement in time of PVG but not sure about EZE or TPE or ICN.

Your last comment - worst case scenario i think goes a tad too far ....


It's all 100% hypercritical right now and the last comment is absolute worst case which I think is actually pretty unrealistic myself.

Even the $2-$3B 'bailout' is just a starting point. There's three key points from what I can establish

  1. Funding to keep essential trade links open
  2. Funding to keep the airline warm so to speak.
  3. Bailout / Purchase to pay off debt and get the airline back into the skies.

The underlying issue is we don't know how long this will go on for. I read this morning some in Australia are predicting 6 months.

NZ had $1.1B in cash at the FY19 annual results. Flying will be the quickest way to see that go which is why they've canned most of the schedule. I suspect we'll see 100% long haul shortly unless the government funds some routes.

With the fleet grounded storage, wages and other normal commercial costs are a couple hundred million + a month so NZ can sit idle for a short time on their own.

Question is between point 2 and 3. What does NZ do and what assistance is taken.

Also when things do start to return to normal it's going to take some time to get up to speed again. The longer the restrictions are in place the slower this will also be.
 
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 10:09 pm

zkncj wrote:
AMSAKL wrote:
Has Jetstar cancelled NZ domestic flying from next Monday? I have a ZQN - AKL flight on the 24th and it looks closed for reservations although I haven't received any notification yet


Looks like they have closed off all New Zealand domestic flights for April.

With the a320s being cycled via Australia for mx etc, it would be hard for the fleet in New Zealand to keep operating if they stopped there Tasman services.


Just had a look at the Qantas News Room which has released an update including JQ flights.

States Auckland to both Dunedin and Queenstown suspended until end of May as well as Wellington to Queenstown also suspended

Auckland and Wellington to Christchurch will be down to 14 return services each per week only (both down from 42)

Also, all QF international flights suspended until end of May. They may look to have some flights to key routes but currently, all suspended
 
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Re: New Zealand Aviation Thread - March 2020

Wed Mar 18, 2020 10:24 pm

Auckland Airport has also announced the cancellation of its Tourism Forum 2020, which was as due to take place in Christchurch on 18 May.

The event coincided with the start of TRENZ, which has also been cancelled.

“During this unprecedented time, we are in dialogue with government and industry to provide information to ensure quality decisions are made,” said Scott Tasker, general manager of aeronautical and commercial at Auckland Airport.

“Auckland Airport is working closely with government, airlines, tourism industry and our business partners in managing through the initial stages of the pandemic, and thereafter we are advocating for joining together in seeking tourism and aviation industry recovery.”

Speakers at the event were set to discuss the challenges the industry faced, with a focus on recovering from crisis and rebooting small and medium tourism operators.

https://www.tourismticker.com/2020/03/1 ... cancelled/ (pay wall)
 
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 5:01 am

Prime minister announcing now: New Zealand borders closing from 11:59pm tonight except to New Zealand citizens and residents returning.

Clarification: this will not apply to passengers in the air currently inbound, but no non-residents will be able to board for an arrival after 11:59pm.

V/F
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 6:41 am

VirginFlyer wrote:
Prime minister announcing now: New Zealand borders closing from 11:59pm tonight except to New Zealand citizens and residents returning.

Clarification: this will not apply to passengers in the air currently inbound, but no non-residents will be able to board for an arrival after 11:59pm.

V/F

Partners and children travelling with citizens or residents will also be allowed to accompany them.
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 7:22 am

With public gathers now limited to an max of 100 people, does that mean NZ is now limited to an 100 people on an domestic A320 flight?

e.g. I goto to the movies tonight they can only sell 100 tickets, and we have to sit an seat apart.
 
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 7:38 am

zkncj wrote:
With public gathers now limited to an max of 100 people, does that mean NZ is now limited to an 100 people on an domestic A320 flight?

e.g. I goto to the movies tonight they can only sell 100 tickets, and we have to sit an seat apart.


https://www.odt.co.nz/news/national/new ... 8CLw2fBZ1g

These measures, however, don't apply to schools.
Nor do they apply to workplaces, supermarkets or public transport.
 
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 8:26 am

Air New Zealand is extending tier status for Airpoints members for an extra year: https://www.airnewzealand.co.nz/frequen ... -extension

V/F
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 8:36 am

We've seen international border restrictions, but one thing that's gone unnoticed, and has more potential, has been domestic restrictions.

Already, we've seen it with the Chatham Islands. Air Chathams notes that it is now screening all non-resident passengers going to the Chathams Islands. Our staff are calling all passengers booked to travel now. We are assisting the Chatham Islands communities in protecting their home and their concerns regarding COVID-19 through the measures we are putting in place, effective immediately.

Non-resident passengers who have been;
- overseas in the last 30 days,
- in contact with someone self-isolating in the last week,
- shown signs of cold or flu symptoms in the last 7 day,

Will not be permitted to travel to the Chatham Islands until further notice.


It will be interesting to see if similar measures are applied to islands like Great Barrier Island and Stewart Island, which also have air links.

Cheers,

C.
 
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 8:41 am

zkncj wrote:
With public gathers now limited to an max of 100 people, does that mean NZ is now limited to an 100 people on an domestic A320 flight?

As someone said, it doesn't affect flights.

However - I wonder if it will impact how many people can be in the Koru Lounges, and how far apart seating in the lounges has to be?

Cheers,

C.
 
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 8:48 am

mrkerr7474 wrote:
Auckland and Wellington to Christchurch will be down to 14 return services each per week only (both down from 42)

Interesting how much greater JQ's reduction on the trunk routes is compared to NZ's. On a random search in late-March, NZ is still showing about 20 flights per day from WLG to AKL. The lowest fares on NZ's trunk domestic flights have also come down quite a bit - every day now about $59, compared to some days a few weeks ago, where you would have seen over $200 equivalents.

I do wonder if this may be the beginning of the end for JQ in New Zealand, domestically, and whether if they did exit, 3C could step in and enter some routes like WLG - CHC and ZQN with ATR 72's. That is, if 3C is still around this time next year after all of this is over.

Cheers,

C.
 
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 8:56 am

planemanofnz wrote:
mrkerr7474 wrote:
Auckland and Wellington to Christchurch will be down to 14 return services each per week only (both down from 42)

Interesting how much greater JQ's reduction on the trunk routes is compared to NZ's. On a random search in late-March, NZ is still showing about 20 flights per day from WLG to AKL. The lowest fares on NZ's trunk domestic flights have also come down quite a bit - every day now about $59, compared to some days a few weeks ago, where you would have seen over $200 equivalents.

I do wonder if this may be the beginning of the end for JQ in New Zealand, domestically, and whether if they did exit, 3C could step in and enter some routes like WLG - CHC and ZQN with ATR 72's. That is, if 3C is still around this time next year after all of this is over.

Cheers,

C.

Prior to the COVID-19 disruption, I would have told you there was precisely zero chance of Air Chathams going into competition with Air New Zealand. Now? I’m not sure how to describe a less than zero chance, but that’s it...

V/F
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planemanofnz
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 9:01 am

VirginFlyer wrote:
Prior to the COVID-19 disruption, I would have told you there was precisely zero chance of Air Chathams going into competition with Air New Zealand. Now? I’m not sure how to describe a less than zero chance, but that’s it...

It'll be interesting to see if 3C survives. If it does, perhaps direct competition with NZ would not be an option - but perhaps JQ withdrawing from routes like WLG - ZQN might open up space for WLG - WKA on 3C. This would sort of compete with NZ's WLG - ZQN route, but not directly (a bit like 3C on PPQ - AKL versus NZ on WLG - AKL).

Anyhow, all far too early to be hypothesising this stuff.

Cheers,

C.
 
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 9:03 am

planemanofnz wrote:
VirginFlyer wrote:
Prior to the COVID-19 disruption, I would have told you there was precisely zero chance of Air Chathams going into competition with Air New Zealand. Now? I’m not sure how to describe a less than zero chance, but that’s it...

It'll be interesting to see if 3C survives. If it does, perhaps direct competition with NZ would not be an option - but perhaps JQ withdrawing from routes like WLG - ZQN might open up space for WLG - WKA on 3C. This would sort of compete with NZ's WLG - ZQN route, but not directly (a bit like 3C on PPQ - AKL versus NZ on WLG - AKL).

Anyhow, all far too early to be hypothesising this stuff.

Cheers,

C.

I very much hope 3C, and all the other operators flying around our country, survive. The months ahead are going to be interesting times for everyone in the industry, that’s for sure.

V/F
It is not for him to pride himself who loveth his own country, but rather for him who loveth the whole world. The earth is but one country, and mankind its citizens. —Bahá'u'lláh
 
DavidByrne
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 9:39 am

3C, like every other airline, will be in survival mode for the foreseeable future. The chances of taking on new and untried routes like WLG-WKA are zero. I don't think that there's an appreciation on A-net of just how economically devastating this virus stands to be.
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 7:53 pm

The government is to offer Air NZ a $900 million loan to counter virus impact. - RNZ
 
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Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 8:02 pm

jimmyah wrote:
The government is to offer Air NZ a $900 million loan to counter virus impact. - RNZ

Not enough, unless there is other undisclosed assistance.
 
jimmyah
Posts: 71
Joined: Mon Nov 12, 2018 7:53 am

Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 8:05 pm

smartplane wrote:
jimmyah wrote:
The government is to offer Air NZ a $900 million loan to counter virus impact. - RNZ

Not enough, unless there is other undisclosed assistance.


-Cancelled dividend- approx 120 mil
-600m at an interest rate of 7-8%
-300m at 9%

Full announcement- https://www.nzx.com/announcements/350298

It seems like an incredibly high interest rate, and there are a lot of strings attached.
 
pbm
Posts: 23
Joined: Wed Aug 23, 2017 2:38 pm

Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 9:34 pm

smartplane wrote:
jimmyah wrote:
The government is to offer Air NZ a $900 million loan to counter virus impact. - RNZ

Not enough, unless there is other undisclosed assistance.


How much do they need? At 31 December, they had about $1 billion in the bank, I tried to track down their existing credit facilities and couldn't quickly find it. What is their month to month cashflow?
 
DavidByrne
Posts: 1666
Joined: Mon Sep 10, 2007 4:42 pm

Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 9:35 pm

Share market taking its toll on NZ - down 39% since open to just 94 cents. And that's without any dilution from recapitalisation given the government bailout was a loan.
This is not my beautiful house . . . This is not my beautiful wife
 
jimmyah
Posts: 71
Joined: Mon Nov 12, 2018 7:53 am

Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 10:36 pm

pbm wrote:
smartplane wrote:
jimmyah wrote:
The government is to offer Air NZ a $900 million loan to counter virus impact. - RNZ

Not enough, unless there is other undisclosed assistance.


How much do they need? At 31 December, they had about $1 billion in the bank, I tried to track down their existing credit facilities and couldn't quickly find it. What is their month to month cashflow?


In the 2019 FY, according to their cashflow statement they were spending on average 403m per month on "payments to suppliers and employees". When we look at their income statement, there is a monthly operating cost of 384m, 100m each on labour and fuel. so maybe from now, looking at expenses of around 200m per month?
 
jimmyah
Posts: 71
Joined: Mon Nov 12, 2018 7:53 am

Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 10:37 pm

DavidByrne wrote:
Share market taking its toll on NZ - down 39% since open to just 94 cents. And that's without any dilution from recapitalisation given the government bailout was a loan.


It's a loan for at least 6 months. The govt have to option to convert the loan into equity after that I think.
 
aerohottie
Posts: 828
Joined: Mon Mar 29, 2004 3:52 pm

Re: New Zealand Aviation Thread - March 2020

Thu Mar 19, 2020 11:22 pm

jimmyah wrote:
smartplane wrote:
jimmyah wrote:
The government is to offer Air NZ a $900 million loan to counter virus impact. - RNZ

Not enough, unless there is other undisclosed assistance.


-Cancelled dividend- approx 120 mil
-600m at an interest rate of 7-8%
-300m at 9%

Full announcement- https://www.nzx.com/announcements/350298

It seems like an incredibly high interest rate, and there are a lot of strings attached.

Crystal ball gazing, i'd imagine the Govt will convert the loan to equity some time after this years budget. Which would take the govt shareholding up to approx 80%, at which point the govt will provide additional funding. Just my guess
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