Amedeo Air Four Plus Share Discussion Threads

[metis20] 27/11/2023 07:24

2 A380 Emirates leases expire 2026, 2 in 2027 and 4 in 2028. Demand for A380s looks to be inceasing significantly. I do not see new lease rates dropping substantially!

Scroll down the screen for lengths of all leases

[lord gnome] 27/11/2023 05:46

Clive - if Emirates look to extend their leases on our A380s, I doubt it will be at anything like the current rates. After 2026 the income must then drop substantially and so will our dividends. Even so, AA4 shares look significantly undervalued.

[my retirement fund] 27/11/2023 02:49

Emirates must find a tight market for decent used A380s or they wouldn't be calling on Airbus to make more of them! Pretty much says it all!

[hpcg] 27/11/2023 00:33

Carcosa - I'm not sure I agree that Emirates are the only game in town for 380s. I think Qatar, Ethihad and IAG (for BA) could all make use of more. Qatar especially as the airport here (I'm writing from Hamad International on a layover) is highly slot constrained. Gate constrained too as was bussed from the flight this evening. This is not to mention start ups targeting A380s.The timing of the lease expiration is helpful too as air traffic will be back in growth, not just recovery.

[garbetklb] 26/11/2023 20:04

Hi Carcosa
Very many thanks for this - bedtime reading.
Andy

[andyandyoj] 25/11/2023 23:25

I think the valuations are closer to a straight line depreciation over the course of the lease and I doubt very much if they reflect the actual asset value. However as the lease end approaches they will continue to fall in that straight line. So it appears to me that the asset value is currently overstated. BUT the value at the end of the period will be much closer to the dna resale (I think a bit higher fwiw). The share price is low for me because the company is highly indebted however Emirates is a grade A payer (as a nation state backed enterprise). The wildcard is the Thai a350s where values are actually increasing and it’s unclear to me what the rent is. I feel a true net asset figure is almost impossible from what we actually know (v the paper calculations) but the cash flows and the chance for higher priced share buy backs followed by dividend increases make this compelling for me

[garbetklb] 25/11/2023 23:01

Yep, borrowings are easier to pin down.

I'm trying to understand NAV, simplistically Gross assets - Borrowings. But it's the Gross assets that I'm trying to understand first.....

[eeza] 25/11/2023 21:35

ST also says that the group had borrowings of 1.12bn.

[garbetklb] 25/11/2023 21:14

I'm struggling with understanding NAV..... In fact, top line value - the value attributed to the aircraft in the annual report @ 31/03/23 is given as £1.16bn. This is roughly in line with Simon Thompson's May 2023 article where it's shown as £1.28bn - difference may be exchange rates, but no matter.

ST then breaks this down by aircraft, showing the 6 A380s at $185m each - no discrimination by individual aircraft to reflect age / usage / condition. (Our aircraft vary a fair bit in age & hours).

Doric Nimrod 2 have just sold 2 A380s back to Emirates for $35m each. Yes, they are significantly older than ours (late 2011 vs 2014 - 2016) and a higher hours (35k vs 31k / 30k / 31k / 18k / 27k / 16k).

But the difference seems extreme. What am I missing?! eg does our valuation include discounted future leasing payments??

Please be gentle........!

[indiagolf12] 25/11/2023 18:46

Thanks Metis 20 - knew I’d seen it somewhere. Mr Greenwood also repeated his tip in last week’s IC:

[eeza] 25/11/2023 17:08

A380 picture-porn.

[eeza] 25/11/2023 17:03

This article claims extending A380 life into 2040's.

17.11.2023 - 03:20 UTC
Emirates (EK, Dubai International) plans to continue operating its fleet of A380-800s into the late 2030s or early 2040s, President Tim Clark told CNBC. The carrier signed various maintenance deals to "maintain and improve operational efficiency, as well as maximise fleet performance and reliability" of the type.
"Emirates will leverage, at scale, the expertise and capabilities of partners including Honeywell Aerospace, Collins Aerospace, Pratt & Whitney, Lufthansa Technik, OEM Services, Gameco, Haeco, and others to optimise its A380 fleet's lifespan and unlock additional operational efficiency gains, all at its exacting standards," the airline said.
Contracts signed during the Dubai Airshow 2023 are reportedly worth over USD1.5 billion. They include base maintenance, spare parts supply, and C-Check contracts. The C-Checks will be performed by Lufthansa Technik at Manila Ninoy Aquino International airport, by Gameco at Guangzhou airport, and by Haeco at Xiamen airport.
The carrier operates 119 A380s, of which 92 are currently active. The others were parked during the COVID-19 pandemic, but are expected to be back into service by early 2024. Sixty-seven aircraft are slated for full cabin refurbishment with 16 so far been completed.
The airline plans to continue operating its double-deckers despite increasing orders for new-generation twinjet widebodies recently. Emirates bumped its B777X order book by 90 aircraft to 205 units, its B787 order book by five to 35, and its A350 order book by 15 aircraft to 65.

[metis20] 25/11/2023 16:40

Indiagolf12

Scroll down the screen for lengths of leases

Table updated every quarter following release of the Company Factsheet.

So last updated around end of September 2023.

Fascinating to see if the Money Week report is accurate re Emirates extending leases.

[eeza] 25/11/2023 11:06

Lots of distressed funds being forced to sell whatever they can to cover redemptions.

[skyship] 25/11/2023 09:51

Beginning to look pretty clear that this is now seriously and bizarrely under-valued.

Just why the seller has decided to exit is a mystery. Hopefully we'll see who it is; and then he/she will have to answer to fund-holders when the stock shoots ahead.

[hpcg] 25/11/2023 02:43

Sky - as was mentioned real trades were outside the spread. I did add a sliver more at 43.4 but anything larger I was quoted 43.9.

Everyone asking questions about leases, expiry, depreciation, interest rate sensitivity, residual value sensitivity, all this information is comprehensively covered in the financial reports. In terms of residuals, leases, other leasing companies provide data and commentary. With the A380 production line closed at the very least Emirates will buy bodies as donors. Tim Clark has said the A380 will remain core to Emirate's fleet for the next decade. Indeed from the Dubai air show:

"Sheikh Ahmed, however, said the airline would continue to expand its fleet with more A380s from lessors for ‘the right price. “The A380 will stay with us until at least 2035. We will continue to buy it for the right price,” he said."

Source

[langland] 24/11/2023 17:21

Some sign at end of day that mkt is improving. Still offered at 43 but there had been a bid at 42.71 for most of the day for 15k with next bid at 41.90 for size. Last half hour or so this changed to 42.77 for at least 50k. I could not test for higher because this was the max in that particular account.

[skyship] 24/11/2023 15:42

sb - yes, bizarre. Went on to buy 12,500 @ 43p; and was quoted 40.0p-48.4p !

Gave them a call and dealt at 43.0p.

[spittingbarrel] 24/11/2023 15:11

Strangely enough iDealing are offering 1000 shares at 46p or 48.4p for 2000 upwards.

[skyship] 24/11/2023 15:06

Actual spread currently 42.75p - 43.0p

[eeza] 24/11/2023 12:47

Late reported buy this morning of 100k @ 43p. Also late reported 250k buy from yesterday afternoon at 43.40p.

Whittling it down. Slowly.