WFS - model update and comments for the Q2 20 results/call

All,

We have updated our model for the Q2 20 results. Please find it here. 

As the bond prices ventures closer to pre-virus levels, we find it difficult to see how these levels can be justified, given WFS questionable debt sustainability even in the pre-virus era. The industry transition to more dedicated cargo freighters from “belly cargo” under passenger liners will at best take some time, as management candidly admits. We also suspect that certain air cargo categories – especially higher bulk to value items such as fresh food – would struggle to justify the cost of a dedicated cargo plane. In any case, it is not advisable to short a bond from a virus-sensitive sector in an environment of continued optimism about policy measures, vaccines, and lockdown fatigue.

Please feel free to reach out if you would like to exchange ideas on the name. 

Juliano