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[m1k3y1] 19/3/2020 08:38

Walsh giving up 20% of his salary for 3 months but IAG / BA drawing up redundancy plans and have served HR1 notices to the Unions.

[m1k3y1] 19/3/2020 08:33

ok, your view.

[toon1966] 19/3/2020 08:30

Fine. But I beg to differ on Trump being ahead of the game.

[m1k3y1] 19/3/2020 08:27

Hi toon.....not Trump fan in any way but do think he is ahead of the UK at the moment regarding this virus thing.
However, I also think that the USA is behind the UK regarding time frames. They will be the last for the population to recover.

[toon1966] 19/3/2020 08:25

So why would you want to test people who have already had the virus. Clearly Ham you know more than the UK's CSA

[hamhamham1] 19/3/2020 08:09

Toon. Ok. Yes there are test out there but current tests are hard to mass produce, else we would have millions available already.
Bit I stand by my statement it's easier to test for those who have had it.

[toon1966] 19/3/2020 08:05

Ham hi- that is a very misleading statement. Tests are available, the problem has been countries not having enough test kits (USA being a good example). Also suggest you listen to the UK's CSA Patrick Vallance on work on an antibody test for those people who had the disease but shown no symptoms.

[hamhamham1] 19/3/2020 07:54

With the figures Italy is posting now, which you can trust, I am really unsure about the true figures in China. They are too proud to tell the truth sometimes.

[hamhamham1] 19/3/2020 07:47

That's the whole problem, we and the world don't really have many tests available. It's not easy to develop a test to see if you have the virus, whereas a test to see if you have had a virus is easy, a blood test for antibodies.

[dround87] 19/3/2020 07:44

Have you known anyone who has tried to be tested and been turned away toon? Testing capacity is still very low.

[smartie6] 19/3/2020 07:38

Appears only hope now is nationalisation. That's providing government willing to support. What will £200b buy the government, perhaps 95% stake in them all?
Guess it's time to think seriously about your investment. DYOR.

[watfordhornet] 19/3/2020 07:38

Don't blame you. Unfortunately I tend to drip feed in but think your strategy is certainly most sensible.Would love to be 100% in cash on sidelines now - life changing opportunities. I on other hand have about 20% cash inly

[hamhamham1] 19/3/2020 07:35

Calling the bottom of the market is a fools game (when it's still descending), am gonna wait for it to bottom out and for optimism to return, then it's safer to go long, yes I may miss the first 10-20% rise but hey, at least I seen where the ground is before jumping.

[toon1966] 19/3/2020 07:30

Hey m1k3y1 you'll be delighted to learn that Trump/USA continue to lead from the front by approving Democrat legislation ordering FREE covid-19 testing. Just waiting on the UK to follow...oh hold cn..

[toon1966] 19/3/2020 07:11

Dround -a truly ridiculous statement "..almost definitely have it..."

[smithys2019] 19/3/2020 07:06

Spob, could well be a case of people transmitting to immediate family due to lockdown. If this is the case, there should be a sharp rise (we are getting that) followed by a sharp drop over the next few days. If it keeps going up, I fear for Western Europe

[smithys2019] 18/3/2020 23:23

Moodys Review.

Their concern is if the grounding extends into Q3. There won’t be much of an economy left if this is still going on by then..

London, 17 March 2020 -- Moody's Investors Service, ("Moody's") has today placed all the ratings of International Consolidated Airlines Group, S.A. (IAG or the company) on review for downgrade. IAG's ratings comprise its Baa3 long-term issuer rating and the Baa3 ratings on its EUR 1 billion senior unsecured notes, divided in EUR 500 million series A bonds due 2023 and EUR 500 million series B bonds due 2027. The outlook has changed to ratings on review from stable.
A full list of affected ratings and entities can be found at the end of this press release.
RATINGS RATIONALE
The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. The passenger airline sector has been one of the sectors most significantly affected by the shock given its exposure to travel restrictions and sensitivity to consumer demand and sentiment. Today's action reflects the impact on IAG of the breadth and severity of the shock, and the broad deterioration in credit quality it has triggered.
The rating action was prompted by the very sharp decline in passenger traffic since the outbreak of coronavirus started during January 2020, which will result in a significant negative free cash flow in 2020, a weakening liquidity profile and a significantly higher leverage. From a regionally contained outbreak the virus has rapidly spread to many different regions severely denting air travel. The International Air Travel Association's (IATA) latest scenario analysis forecasts a decline in passenger numbers of between 11% and 19% for the full year 2020.
Moody's base case assumptions are that the coronavirus pandemic will lead to a period of severe cuts in passenger traffic over at least the next three months with partial or full flight cancellations and aircraft groundings, with all regions affected globally. The base case assumes there is a gradual recovery in passenger volumes starting in the third quarter. However there are high risks of more challenging downside scenarios and the severity and duration of the pandemic and travel restrictions is uncertain. Moody's analysis assumes around a 50% reduction in IAG's passenger traffic in the second quarter and an 18% fall for the full year, whilst also modelling significantly deeper downside cases including a full fleet grounding during the course of Q2.
IAG has responded rapidly to the crisis by cancelling flights to China, other Asian routes, Italy, the US and other regions and instigated cost and cash preservation measures. The travel ban announced by the United States on non-US citizens from 26 European nations will further affect many of IAG's routes. Moody's expects travel restrictions to deepen and the extension of the travel ban to journeys from the UK to US will severely affect routes of British Airways, Plc (Baa3 under review for downgrade), which represented around 68% of IAG's adjusted operating profit in 2019.
Moody's does not expect IAG to benefit materially in 2020 from the lower oil price because it has hedged most of its expected fuel costs during the year at levels at an effective rate of around $600 per metric tonne, compared to the current price of around $420 per metric tonne. Whilst its hedging policy is relatively common across European airlines IAG does not benefit from material fuel price alleviation to the extent available to its US airline peers. Moody's considers that further actions will be required to reduce the cost base, with staff layoffs, voluntary and mandatory unpaid leave and deferrals of aircraft pre-delivery payments and deliveries to support the company through the crisis.
Moody's also anticipates that the airline industry will require continued and further support from regulators, national governments and labour representatives to alleviate pressures on slot allocations, provide indirect or direct financial support and manage airlines' cost bases. Whilst IAG's strong balance sheet means it is in less need of such support, ready access to financial markets may be required in downside scenarios. An extension of slot alleviation beyond the current provisions to June 2020 in Europe is also likely to be important.
LIQUIDITY
IAG had significant levels of liquidity at 12 March 2020 of €9.3 billion, comprising cash and short-term deposits of €7.35 billion as well as undrawn credit lines of around €1.9 billion. With total available funds representing around 36% of revenues IAG is one of the most liquid airlines globally. Under normal market conditions this would be adequate and Moody's considers IAG's liquidity capable of supporting the company for a period of partial or total aircraft grounding in line with base case assumptions. However a more severe downside with extended groundings into Q3 would likely start to pressurize the company's current resources.
Moody's expects IAG to take further actions to strengthen its liquidity and has relatively good fleet flexibility with 197 out of 598 owned aircraft at 31 December 2019 and a substantial unencumbered fleet which could be utilized to generate further funds. The profile and financial metrics of IAG in a post-crisis environment are subject to high uncertainty but Moody's expects that IAG would ultimately be in a position to gain share and recover its financial metrics over time, depending on the severity of the current crisis.
Moody's considers that IAG is more weakly positioned than British Airways, due to the weaker operating performance and lower profitability of the other airlines within the IAG group, including Iberia, Aer Lingus, Vueling and LEVEL. IAG will also need to complete and finance the €1 billion debt-funded acquisition of Air Europa during 2020, which will weaken its financial metrics. In addition the rating of IAG takes into consideration the structural subordination of issuer obligations of the IAG at the holdco level which further weakens its position relative to British Airways. Moody's does not currently notch down the IAG rating from British Airways' Baa3 senior unsecured rating however further material weakening of British Airways' rating could lead to a downgrade of IAG.
The review process will be focusing on (i) the current market situation with a review of current passenger traffic conditions and pre-booking trends for the next few weeks, (ii) the liquidity measures taken by the company and their impact on the company's balance sheet, (iii) other measures being taken by the company to alleviate balance sheet and credit metrics stress.

[spob] 18/3/2020 23:17

Lockdown not working in Italy because many people ignoring it

[milliecusto] 18/3/2020 23:05

Army called in, London being shut down..super

[m1k3y1] 18/3/2020 22:56

Peston

20,000 troops to be used to help the NHS

[smithys2019] 18/3/2020 22:56

I reckon that we will go down the route of recovered victims providing blood plasma donations, which was done during both sars and bird flu to massively cut the recovery time. There are promising results from the use of avichlor antimalarial in reducing the infectiousness. We won’t be waiting for an immunisation prior to lifting the blockade imho, we will need to find licensed and tested generic drugs which act as a treatment for the disease.

IAG took a hammering on its bond rating today. Reason they don’t want to take a government loan is to prevent a downgrade on bonds, meaning that they lose their investment grade on their loans. That will just put more pressure on cash flow.

[smithys2019] 18/3/2020 22:53

Waikenchan, don’t forget Intellectual property and Brand too. It’s an absolute goldmine. I bought in at 225 again, average down to 300 now, admittedly the fall from 430 has been painful to watch but has been a massive learning experience in how not to get in too early (hindsight and all that).