Last calls for fresh cash?
All,
England’s new national holiday will be placed on the 17th of May - the day pubs re-opened. Incidentally, that is also the earliest date from which foreign holidays may be allowed. Meanwhile, the EU are unlikely to be much faster.
Oh, we always knew that:
- With the benefit of hindsight, I can now confidently pronounce that I "always knew" that Easter was going to be a write-off, but up until only two weeks ago, airlines (and I) were clearly hoping that Easter would in fact be the start of business.
- The below chart shows the capacity planning for the next three months - to the week commencing on the 17th of May and clearly, airlines have reduced their planned capacity significantly in the last weeks and after further statements such as Boris’ the other day are likely to halve that plan again, pushing ramp-up out by another 2 months.
- Note the 80% (of 2019) capacity planned from late May onwards.
Source OAG
Last calls for more fresh cash:
- While this is not a major issue for names such as e-Dreams that are endowed with more than enough cash to withstand the year on virtually no revenue pick-up, it should matter to the marginally capitalised travel companies. Providing fresh cash has been one of the more profitable trades last year and this UK road map may trigger a few more such opportunities, also because continental timelines should be lagging for the most part.
- While the chart focuses on Airlines, the same date and possibly same effect applies to pubs and restaurants in the UK, where some of the funding picked up early last year may not quite suffice and therefore present an opportunity to top-up more fresh cash.
Source: The Telegraph
Ultimately, however, with the UK and other nations now seeing themselves on a “one-way road” out of the pandemic, it is hard to imagine major defaults due to a mere 2 months of incremental disappointment. With money supply where it is, we expect the current bull run to continue - at least until some post-lock-down figures are reported later this year.
Wolfgang
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