Avation Share Discussion Threads

[quepassa] 13/3/2020 06:40

Virgin Australia feeling the strain.

Read Flightglobal article dated 13/3 headed " Virgin Australia cuts flights and suspends earnings guidance".

Like so many other airlines, tough steps being taken by mainly-domestic Virgin Australia:-

hXXps://www.flightglobal.com/airlines/virgin-australia-cuts-flights-and-suspends-earnings-guidance/137240.article


ALL IMO. DYOR.
QP

[quepassa] 11/3/2020 16:26

So many planes flying empty. So many cancellations.

Unsustainable for the airline sector. Other countries likely to follow Italy on total travel lock-down.

Won't be long in my view before other airlines go bust or need bailing out.

The financial strains being experienced by airlines are in my opinion likely to knock through to their bankers, financiers and lessors in the ntdf.

Good Luck All.

ALL IMO. DYOR.
QP

[quepassa] 10/3/2020 07:59

The dramatic fall in oil prices and aviation fuel would appear to be a benefit to airlines when times are hard.

But not necessarily.

Imagine that some airlines like EasyJet for example have hedged some 70% of fuel requirements. And Ryanair , purportedly 90%. Some airlines may have hedged fuel prices in the $50's/60's/70's per barrel.

Some airlines will be paying around DOUBLE the current price of aviation fuel under their hedges.

Compare that to an airline such as Norwegian which has only hedged 25% of fuel costs and can therefore take significantly more advantage of the suddenly lower fuel costs and be much more competitive in seat pricing when demand returns.

As if Corona virus wasn't bad enough, those airlines with large and expensively hedged fuel costs will suffer further compared to their competition with a lower percentage of hedged fuel.


ALL IMO. DYOR.
QP


ALL IMO. DYOR.
QP

[quepassa] 05/3/2020 05:53

FlyBe has just collapsed in the last few hours.

A mere fortnight ago, last month on 19/2/20, Avation announced that two ATR-7200 aircraft had been subleased from FlyBE to Loganair and "will begin flying in the coming weeks" and "will remain with Loganair until just before the end of the leases".

Either way, FlyBe was already in a parlous state and it seems that the dramatic fall in passenger numbers due to Covid 19 was the final straw and pushed FlyBe over the brink.

ALL IMO. DYOR.
QP

[quepassa] 04/3/2020 11:05

A very worrying but frank near full-page article about the health of the airline sector in today's FT on page 15, headed "Virus pushes aviation sector into 'crisis zone'" .

The FT article mentions twice instances where lessees are trying to " seek capital cost reductions by negotiating with leasing companies" and " Some airlines were also seeking a temporary holiday on lease payments".

See FT article for full context.

ALL IMO. DYOR.
QP

[quepassa] 04/3/2020 10:31

yes, I suspected it was that Avation would be taking wise precautions to protect staff/management from unnecessary travel given current circumstances.

[hiraniha] 04/3/2020 07:24

The Company appear to have pulled out of one of these Share Society meetings for later on this month.Anyone think some sort of announcement is imminent?

[hiraniha] 02/3/2020 12:57

Tip update by Simon Thompson an hour ago.Basically, buy on current share price weakness.

[lefrene] 28/2/2020 12:32

AVAP is in my view a very well run company, it has a short term problem to deal with, as does the airline industry in general. I would expect the fall out to lead to more carriers wanting short term leasing until they can see where things going. One would expect that to lead to AVAP being able to improve their margins.

I get the impression that a deliberate panic is being whipped up, and once the reason for this has passed (whatever it is), no doubt the same media will be reassuring us about new methods of sanitising air conditioning etc to make travel safe again!

[quepassa] 28/2/2020 08:55

Additionally, since then, several major airlines have issued statements that they are reviewing/putting on hold items of major capex in view of the financial uncertainty/lack of financial visibility due to dramatic reduction in passenger numbers caused by corona virus..

so perhaps the future shorter-term demand for, and prices of, pre-owned aircraft will soften.

Avation appears to be well-run but the aviation sector as a whole is suddenly in a very bad way.

ALL IMO. DYOR.
QP

[quepassa] 28/2/2020 08:48

we've been over all this before.
you said the same thing already in post 2388.



and I responded in 2389 which I will repeat for avoidance of doubt:-




You are however now beginning to grasp/admit that there would be a "financial impact" in the event any airline were to default on a lease payment to AVAP.


question for you....to illustrate the point...

When Thomas Cook went bust last year:

1. How many months elapsed between Avation repo-ing the aircraft and then re-leasing them?

2. Did they receive income on the aircraft during this period?



I think Avation have a generally strong lease portfolio but they have without doubt significant Far East exposure.

Whilst these airlines should hopefully be fine, the precipitous downturn in Far East passenger numbers due to Coronavirus will not be financially beneficial to any of these airlines.

ALL IMO. DYOR.
QP

[lefrene] 28/2/2020 08:44

But the repoed car stops earning the lessor money unless he can lease it to someone else. He ends up with a yard full of cars he can't lease out because the demand for them has slumped. To my mind this nasty flu bug is being over-hyped,(why?), at some point the hype will stop, and everybody learns to live with it as we do all other flu bugs.

[djabel666] 28/2/2020 08:33

AVAP is not an airline so should not be measured in the same way as WIZZ, EAZ or any other airline.E.g. If you lease a car to provide a taxi service and then do not use the car and therefore have no revenue, that is your problem BUT you still have to pay the lease or you default and the leasing company take back the car.

[quepassa] 28/2/2020 07:37

Well I hope you are right . But we know how twitchy some airlines are to even minor downturns.

This passenger downturn is off the civil aviation Richter scale. And it's only going to get worse.

And if you are suggesting that any airline is financially immune to this sector catastrophe, I would beg to differ. Not all airlines will weather this disastrous, sudden sector downturn in my opinion.

Good Luck All.

ALL IMO. DYOR.
QP

[a_game] 28/2/2020 07:27

Exceptional results this morning. Give it a few months and aviation will be back to normal. AVAP have a well diversified portfolio and they've shown they can quickly reposition aircraft.

[quepassa] 28/2/2020 07:09

More relevant (sorry) than today's results, just read the RNS this morning by EasyJet over demand to flights and cancellation plans in Europe and hit to earnings over corona.

The financial hit to the global civil aviation sector is unfathomable at this stage.

[quepassa] 27/2/2020 04:35

Yes, but it costs £20 to attend unless you are a fully paid up member.

Most other seminar providers offer free attendance to investor presentations.

[sharesoc] 26/2/2020 23:22

Avation present at our London seminar on the 11th March. More details here:

[quepassa] 21/2/2020 07:25

QANTAS slashes FAR EAST flight capacity by 15% due to corona virus.

AIR FRANCE also warns of earnings hit and extends current flight ban on certain routes.


it's getting ugly in the aviation sector now.


passenger numbers have nose-dived.

GOOD LUCK ALL.

ALL IMO. DYOR.
QP

[quepassa] 19/2/2020 07:06

Bloomberg today.

More Far East aviation sector news:

" China Considers Cash Injections, Mergers to Bail Out Airlines".

Link to article here:-

hXXps://www.bloomberg.com/news/articles/2020-02-19/china-said-to-mull-cash-injections-mergers-to-bail-out-airlines


ALL IMO. DYOR.
QP