Amedeo Air Four Plus Share Discussion Threads

[scrwal] 01/12/2023 12:54

The A350s are leased to 2035 x3 2036 x1.

[hpcg] 01/12/2023 10:08

2x 777ER as well.

The world is desperately short of large airframes. Irrespective of business traffic premium cabins are full. This is a function of a large global middle class including the comfortably retired. Once one has travelled long haul with a flat bed it is difficult to go back. We talk about the A380s a lot because of perceived demand there. IMO One World really needs to beef up its UK-Doha capacity, and potentially increase capacity to Muscat now that Oman has joined. Between BA and Qatar they serve 72 and 80 countries respectively with twice the number of destination. I am contradicting Akbar Al Baker here, but I just don't agree with him that A350s then 777-9 will in any way do the job for capacity constrained hubs that generate traffic.

[rimau1] 01/12/2023 08:56

A350's Candid, read the article!!!!

[cousinit] 01/12/2023 08:36

Candid, the main difference compared to your summary relates to the four A350s.

These are potentially leased into the mid 2030s and the leaases are currently below market rates (but will revert to market rates in a few years if they stay with Thai as they come out of the rehabilitation process).

So that operational income stream should be growing and more sustained (although the Board have said that they would consider selling them at the right price).

[eeza] 30/11/2023 12:48

MM won't be taking these into his satchel - they are destined for a new home.

[eeza] 30/11/2023 12:46

Seller's holding being washed through.

[clive7878] 30/11/2023 12:41

MM sensitive to sells of 209k 100k & 2 x 50k - drift in share price

[clive7878] 29/11/2023 15:33

Maybe we will get a spike in share price in January.
The problem is in the next 2 years the income from leasing should be as known now,
as well as the prospective dividend of 1.75p per quarter
both of which should remain unchanged,
so that leaves the speculation from 2026,
of any changes after 2026 of income and dividend going forward from then.
Also speculation of of what the share price will be in 2026,
which also may depend on what is thought the asset value is at the time and will be going forward,
which is a very unknown factor..

The passenger market for airlines is picking up which is a big plus though,
with higher fares and increased income and profits.
There is the stake of 10% by the Saudi in Heathrow Airport too,
not sure where this will lead.

[scrwal] 27/11/2023 12:30

AA4 have six 380s and two 777s leased to Emirates plus the four 350s leased to Thai.
If the leases are extended this would be for 4 380s with the two expiring in 2026 either being bought for spares or being extended - this depends if they are in a batch that is too old to extend.
The lease income will fall but so should the associated costs so the divi may not fall as far as anticipated. Also we do not know how income will be affected by the Thai leases as currently they only contribute to covering cash outflow but this should change once the new rates kick in I believe.

[hpcg] 27/11/2023 12:26

I am literally stuck on poxy little (full) 777 at LHR T5 because there aren't any buses, which wouldn't be needed if there were enough stands. Which there would be if the popular routes had decent sized aircraft on.

[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........!