Home » World » Air New Zealand chief executive Greg Foran buys $1m worth of shares – World news

Air New Zealand chief executive Greg Foran buys $1m worth of shares – World news

Air New Zealand chief executive Greg Foran buys m worth of shares – World news

Air New Zealand chief executive Greg Foran has purchased $1 million worth of shares in the airline following the completion of its $1.2 billion capital raising.

A disclosure note issued by the company to the New Zealand stock exchange on Friday said Foran bought 1.46 million Air New Zealand shares worth $1m, across two transactions on Tuesday and Wednesday.

Shares in Air New Zealand closed at 67.5 cents on those days.

Foran previously held no shares in Air New Zealand, although he does hold 2.3 million in rights which can be converted to shares.

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Air New Zealand disclosed that directors and senior managers also bought shares recently.

Among those were chairperson Dame Therese Walsh, director Dean Bracewell, chief people officer Nikki Dines, chief customer and sales officer Leanne Geraghty and chief operational integrity and safety officer David Morgan.

Air New Zealand’s share price has dropped considerably since late March, when it announced a $2.2b recapitalisation plan to help repay its debts and improve liquidity.

Air New Zealand chief executive Greg Foran held no Air New Zealand shares prior to the transactions.

LAWRENCE SMITH/Stuff

Air New Zealand chief executive Greg Foran held no Air New Zealand shares prior to the transactions.

Before the announcement Air New Zealand shares were trading at $1.37.

At the completion of the capital raising in early May its share price was 87c.

Its shares are now trading at 66c.

Foran is in the United States where he visited electric self-flying air taxi company Wisk.

Air New Zealand has a partnership with Wisk to bring its autonomous electric air taxi service to New Zealand.

A recent research note by Forstyh Barr analysts Andy Bowley and Matt Noland said Air New Zealand was now in recovery mode with passenger revenue accelerating from increasing capacity and strong demand.

“Cash burn should no longer be an issue given the working capital benefits of ticket sales.”

However, losses would be significant in the 2022 financial year, and the 2023 financial year would be a transition year before profits recovered in the 2024 financial year, they said.

“We are wary of elevated oil prices, though recognise Air New Zealand is well positioned to compete in this environment with a modern fuel efficient fleet.”

Post-Covid Air New Zealand would be more focussed on generating an improved return on capital than expanding its network, they said.

They set a share price target of 70c for Air New Zealand.

Domestic aviation demand was recovering quickly and, while Air New Zealand’s international capacity had been constrained, little competition had generated attractive yields, they said.

Competition would increase but was likely to remain at favourable levels relative to pre-Covid for some time, they said.

“Oil price are Air New Zealand’s biggest earnings headache currently.”

Hedging provided Air New Zealand some near term protection, and its young, fuel efficient, fleet was “very competitive”, they said.

But prolonged high fuel prices could have a negative impact on Air New Zealand’s and the industry’s profit recovery, they said.

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