In a lengthy update to the market Air New Zealand has given a strong hint of how it sees the immediate future for its business - perhaps some more domestic flights, but most international travel will be out until 2021.
Virgin Australia wants a bailout from Canberra, regional operator, Rex does as well, while Air New Zealand, which last week received a $NZ900 million capital injection from the Kiwi government, has started following its Australian rivals and slashing staff numbers.
Macquarie assesses the FY19 outlook has softened a little, as the airline is unable to pass on higher fuel costs to customers in the current demand environment. The stock offers a strong dividend yield, which is sustainable, given the balance sheet and recent deferrals of capital expenditure.
The investor briefing focused on the structural advantages that has allowed the airline to perform through the cycle as well as sustainable returns. Credit Suisse found nothing materially new to change its investment view.