International Consolidat... Share Discussion Threads

[loganair] 14/3/2020 23:30

As posters are posting on the Easyjet board, I too have been hearing that the UK airlines may need to be nationalised.

If this becomes the case, maybe like similar to Lloyds with the government taking a 40% stake to bail out each airlines then selling this stake back to the Private Retail Investor at a later date.

[waikenchan] 14/3/2020 23:29

Ezj - less debt as a proportion of cash and reserves. Less gearing aswell.

Hard to say if in a better position to be honest. Just taking southwest (usa's version of easyjet as an example, they were in the best financial shape on a video I watched when doing fundamental analysis). However I don't know if that can be directly translated to easyjet.

[m1k3y1] 14/3/2020 23:24

Can we be clear....so far only 21 deaths in the UK with circa 1100 infections ....

[amaretto1] 14/3/2020 23:20

What u think of Easy jet ?Will it be ok

[m1k3y1] 14/3/2020 23:17

logan......are you invested in IAG

[amaretto1] 14/3/2020 23:16

Will EZJ survive .. how strong are they ?

[loganair] 14/3/2020 22:59

I believe IAG and Easyjet as well as Tui and Ryanair are all uninvestable at the moment.

Upon the markets opening on Monday I wouldn't at all be surprise to see the share prices of the likes of IAG and Easyjet drop by 50% which would give a Monday closing price for IAG of 175p and by the end of the week falling further to 100p or even less.

It wouldn't surprise me that going forward IAG will be burning through/losing £250mln per week for at least the next 2 months.


I think Virgin are in the worse and weakest position as also they have other airlines as their major share holders, airlines that are also asking for state aid.

[waikenchan] 14/3/2020 22:41

That's my point, equities had a torrid time then.

We have every thing we had in 2008 (record debt and leverage levels for corporates) plus a flight ban. Next few months are going to carnage. As I said earlier best case scenario in my opinion iag currently valued at cash in the bank and cash eqivlaents just now.

[m1k3y1] 14/3/2020 22:33

waikenchan.......I don't think the Financial crash of 2008 was a pandemic...was it ?

[montyhedge] 14/3/2020 22:30

Suspend shares, cancel dividend.

[waikenchan] 14/3/2020 22:28

Even in the height of the GFC of 2008, 9/11, dot com crash there were no flight bans.

[careful] 14/3/2020 22:19

Inflation rate will be interesting over next few months.
Negative shortly, actual deflation.

Property will crash, unemployment will rise.

Virgin begging for a ballot today.
Get in early, they will not be alone.

There will be hundreds of businesses in need of cash.

[milliecusto] 14/3/2020 22:12

2008 all over again, but much bigger

[smithys2019] 14/3/2020 22:02

If the business was failing due to a poor business model 1 pound, I would agree with you. But it’s not. Every single business in the sector is going to fail without support. QED too big to fail.

Another reason. Who will make up the huge shortfall in APD and direct and indirect taxation when an entire sector is wiped out? HMG are about to lose bucketloads of tax revenue in the long term if there is no intervention.

[1 pound here we come] 14/3/2020 21:53

Will the government want to bailout a rapidly failing business??

There must be rules about this.

[m1k3y1] 14/3/2020 21:52

Agreed Smithy......it is essential for a modern economy.
Especially one that has decided to make their own trade deals with the rest of the world.

[smithys2019] 14/3/2020 21:47

How is it different? State aid will come because if we don’t, there will no longer be an 800billion commercial aviation industry left. It’s exactly the same as too big to fail. JIT and many other functions of a modern exonomy are exceptionally reliant upon the sector.

It’s far wider than just bums on seats. Commercial aviation is a key enabler for a modern economy.

[smithys2019] 14/3/2020 21:46

The money doesn’t need to come from government. It can be done via QE/asset purchase or loans via institutional banks at very lucrative rates.

[loganair] 14/3/2020 21:42

2008 was was completely different to what is happening at the moment. I would say at the moment IAG is currently univestable. Both Air France and Lufthansa are asking for state aid.

[m1k3y1] 14/3/2020 21:32

I think this is why BoJo is resisting suspending flights.
If the instruction comes from UK Gov, then the airlines will have a claim for losses against the Gov, or GOV will have to offer support.

If he leaves it to them to make the decision, they will not have the ability to claim for losses or pressure GOV for help.

I could be wrong of course.

[smithys2019] 14/3/2020 21:26

We had the same conversations in 2008 careful. It was a complete bloodbath and again I lost a lot in the dip but ended up very net positive around 5 years post event. I turned a 20k house deposit for our first home into over 70k in that timeframe.

People didn’t see a way out when the banking system collapsed, I remember vividly the moment bear stearns went south and it was brutal. I agree this is either Armageddon (but highly unlikely) or humans do whatwe have for the past 10,000 years - adapt to the situation and thrive. I still maintain IAG are best placed in Europe to do very well out of this in the long term. Are there more profitable sectors to potentially benefit? Undoubtedly. But I have known the sector for over 20 years now and I have seen how adaptable the airline business has been. We are left with few surviving airline companies now, but those that have prevailed have done so through rapid adaptability and an ability to risk manage with the very best of them. Some of you will be calling me a loon but fully intend to be buying into the car crash we expect at market open on Monday. Reckon we will be at least one more support level down.

[loganair] 14/3/2020 21:24

Virgin Atlantic boss Peter Norris urges Boris Johnson to sanction £7.5bn airline bailout.

Peter Norris, the chairman of Virgin Atlantic Airways' majority shareholder, Virgin Group, will write to the prime minister on Monday to warn that the sector needs immediate financial aid to survive.

The bailout request will come ahead of what could prove to be the bloodiest week in British aviation history, with British Airways, Virgin Atlantic, easyJet and Ryanair all expected to announce mass groundings of aircraft and potentially huge redundancies.

[smithys2019] 14/3/2020 21:21

Temperature/Latitude analysis of Corona

hxxps://poseidon01.ssrn.com/delivery.php?ID=479004100026075005090023120121112090056069085080028027023075022081091005007097069105004042026057051007117115102086109114015064045047056048048066029082122105089064073058014071065107072112072000085103099117068125119001101103127119026023018096125099092090&;EXT=pdf

I am finding the distribution and growth statistics fascinating at the moment. Nigeria and other African nations have been exposed and have had “patient zero”. However it seems that the virus is not taking rapid hold outside of a very thin latitude band. This could be down to poor health services and a lack of available testing, resulting in poor reporting, but there are very few outliers. Theory goes that as temperatures increase as we approach summer, Corona could die out very rapidly. Also worth noting that the more northerly latitudes that will become exposed if the theory holds true have much lower population densities, making viral spread much more difficult.

[careful] 14/3/2020 21:20

People should not believe that governments can solve everything.

There is not enough money to bale out all who will be in trouble as a result of this virus, unless it is all exaggerated and blows over.

My optimistic hope is that this virus is not as big a deal. Possibly tens of thousands have already had it and brushed it off. They have had mild symptoms the usual winter cough/cold/chest.

The deaths of mainly old ill people is sad, as are the pressure on the health service, but there were worries about the NHS ability to cope if the usual flu season was active.

We shall know within a few weeks.

This could be the investment opportunity of a lifetime.
Or maybe the end of financial life as we know it.