AIR - Air NZ.

[Zaphod]

I can't see the heavily wounded Kangaroo rolling over and playing dead like an old Labrador.

They're not dead, but they are down and hurting. The cutbacks Qantas have made to routes (int & dom), frequencies, aircraft and staff provide a significant opportunity for VAH. Qantas have also replaced older aircraft with superior hard products with newer aircraft with inferior hard products, in order to reduce fuel costs.

I do wonder whether Qantas will reconsider selling/float all or part of it's frequent flyer programme, in order to generate some additional capital.

[Jaa]

These are dreadful operating stats. A load factor of 73.4%?!?! Achieved with lower yields in both domestic and international!!

They really had no choice but to stop adding additional capacity... If Qantas were acting rationally they would be cutting it.

No, likewise, but stats out today don't indicate a Kangaroo acting like a young huntaway either.

Summary of Traffic and Capacity Statistics
Month of May 2014
Qantas Group passenger numbers for May 2014 were in line with the previous year. Group capacity
(Available Seat Kilometres) increased by 3.0 per cent and Group demand (Revenue Passenger Kilometres)
increased by 1.5 per cent, resulting in a revenue seat factor of 73.4 per cent which was 1.1 percentage
points lower than the previous year.
Demand at Qantas Domestic in the month was negatively impacted by weak consumer confidence and
business sentiment. On 21 May 2014, Qantas announced that in response to changing conditions in the
domestic market, total domestic capacity growth (comprising Qantas Domestic, QantasLink and Jetstar
Domestic) will be zero in each of the first three months of financial year 2015 compared to the prior
corresponding period.
Financial Year 2014
Qantas Group passenger numbers for the financial year to date (31 May 2014) increased by 1.1 per cent
from the previous year. Group capacity increased by 1.1 per cent and demand decreased by 1.2 per cent,
resulting in a revenue seat factor of 77.4 per cent which was 1.9 percentage points lower than the previous
year.
For the financial year to date, Qantas Group yields were lower than the prior corresponding period. Total
Domestic (comprising Qantas Domestic, QantasLink and Jetstar Domestic) yields were lower than the prior
corresponding period as a result of market capacity growth and weak demand. Total International yields
were lower than the prior corresponding period due to persistently high levels of competitor capacity growth
into Australia

[Hoop]

I was technically late to get in at 1.70 but was technically chucked out at 2.14 when buyers could be found during the steep daily fall through the supports..
Geeez ..another one of my favourite stocks gone out of my portiofolio...40% cash now..

[Beagle]

You must be running some really tight stops Hoop as even using a 10% correction from the top price recorded lately of $2.28 wouldn't have triggered an exit till $2.05. That said the very rapid 9% correction in SP looks over-done too me, especially given that the majority oif the recent oil price increase has corrected again. With a good dividend just around the corner in a couple of months maybe you could buy back in at $2.10 and be ahead

Qantas got thumped really hard yesterday...I remain of the view that some of the recent selling was too do with the end of the financial year in Australia 30 June. Company looks in great form and this has to be the cheapest of the large cap stocks on the NZX by miles...I'm getting ready to back the truck up once its confirmed this correction is done and dusted.

[Hoop]

You must be running some really tight stops Hoop as even using a 10% correction from the top price recorded lately of $2.28 wouldn't have triggered an exit till $2.05. That said the very rapid 9% correction in SP looks over-done too me, especially given that the majority oif the recent oil price increase has corrected again. With a good dividend just around the corner in a couple of months maybe you could buy back in at $2.10 and be ahead

Qantas got thumped really hard yesterday...I remain of the view that some of the recent selling was too do with the end of the financial year in Australia 30 June. Company looks in great form and this has to be the cheapest of the large cap stocks on the NZX by miles...I'm getting ready to back the truck up once its confirmed this correction is done and dusted.

Yes my sell was very tight...My personal Investment Strategy discipline required me to sell...see my post on the NZx50 Good news thread.
However the AIR break (pun) was very significant it didn't just trigger one or two signals..it was a mass signal break across many TA areas..these mass breaks should not be ignored by any TAist..Nothing wrong in selling and waiting for re-entry...Its always possible it could quickly reverse and climbs back through the new resistances to the joy of the Buy and Hold FAists. If that happened then I simply buy back in again (probably at a price higher than I sold out for) and treat the loss in not keeping hold as an insurance policy cost....The other scenario of course is to buy back in after the market correction is over for many cents cheaper than I sold for thereby compounding my overall capital gain associated with AIR over time..Remember when a share goes down and breaks, the risk of it to go down further is more likely... sudden reversing upwards from now and creating a bear trap, leaving a stopped out seller high and dry, that risk is less likely.

We can't predict the future..so we wait and see how the theoretical odds play out..

[Beagle]

Hoop, mate I totally respect TA and when there's nothing else to go on, e.g. PEB I swear by it but I almost always use a combination of FA and TA whereever possible. In terms of TA personally I use simple 100 day moving averages which at present are at $2.00 for AIR and I would be concerned if it breeched below that level. That said from a FA point of view this stock is extremly good buying.
As suggested above, I'm looking for the stock to stabilise, (show far less turbulence) and confirm the correction is over and will back the truck up on the basis that there's so few other opportunities on our market that offer such a compelling valaution story.

[modandm]

These are dreadful operating stats. A load factor of 73.4%?!?! Achieved with lower yields in both domestic and international!!

They really had no choice but to stop adding additional capacity... If Qantas were acting rationally they would be cutting it.

few airlines operate with the high load factors NZ does. Partly because QF is higher yielding traffic. 75-80% is usually the sweet spot for premium carriers believe it or not.

[modandm]

Your mad hoop. While we can't predict the future we can make educated guesses, and forecasts. Doing this based on fundamental analysis is far more likely to be successful than predicting the future based on short term price movements or patterns you see on charts. Your likely to get whipsawed and incur higher trading costs as well.

Roger, keep loading - my truck is so full! As for turbulence AIR is remarkably stable - in fact on on our risk reports it has a beta of under 0.6. While a c.9% fall seems alot, its a remarkably steady stock! Usually just goes up!

[Jaa]

few airlines operate with the high load factors NZ does. Partly because QF is higher yielding traffic. 75-80% is usually the sweet spot for premium carriers believe it or not.

The rule of thumb used to be 78% was profitable and 77% was not. It is higher for a LCC.

Jetstar international at 68.8% for May and 74.2% for the financial year must be losing a huge amount of money. The Qantaslink numbers are also terrible with only a 62% load factor for the financial year. They are obviously reacting to slowly to the end of the mining boom.

I had a look at VAH operating stats for May and they seem to have improved nicely so Qantas must be heading for a tailspin (talk in the Aussie media is a loss for the full year of $1b-1.5b).

My guess is QAN are forced to do an equity raising which is underwritten by another airline (ala FPA). The other airline then cleans out the top management and starts making rational decisions which leads to a stabilisation and slow improvement. But first you need a good old fashioned crisis.

Positive short/medium term for AIR/VAH but the good times can't last forever.

[Marilyn Munroe]

My guess is QAN are forced to do an equity raising which is underwritten by another airline (ala FPA). The other airline then cleans out the top management and starts making rational decisions which leads to a stabilisation and slow improvement. But first you need a good old fashioned crisis.

The most logical underwriter would be a sand state airline flush with petrodollars. Up until now Queer and Nasty's cobbers from Dubai have avoided foreign equity entanglements, so may not be the suitor some were expecting.

On the other hand Etihad have been splashing the cash around buying up stakes in all sorts of airlines. They could be the white knight.

Memo to John Key, sell Cullen Airlines to Etihad now for a good price. Dont be left standing at the altar while Etihad uses its petrodollars to chase Queer and Nasty Airlines.

Boop boop de do
Marilyn