AIR - Air NZ.

[winner69]

You're probably right considering the size of the usual entourage but he did seem somewhat surprised yesterday that he hadn't received an invite...but then again a cynic would argue he's making political capital out of that trying to appeal to the ordinary voter. $3 today would be a nice way to end the week wouldn't it...make for a happy start to the long weekend :)

They worked out 55% of those working in these secret spaces had pony tails and for the sake of worker safety didn't want him to join

[Beagle]

They worked out 55% of those working in these secret spaces had pony tails and for the sake of worker safety didn't want him to join
:lol: :lol: :lol:

Just curious... How many of you guys are as addicted to grabaseat as I am ?

They had $20 fares AKL to Hawkes Bay this morning...I couldn't say no to a nice day out with my wife for lunch and dinner in Napier to celebrate my birthday in November.

Yesterday they had short notice return fares to Hong Kong for $699 return...I tell ya, keep an eye on those specials on grabaseat !!

[Zaphod]

:lol: :lol: :lol:
Just curious... How many of you guys are as addicted to grabaseat as I am ?


During the special promotions like we have seen today, I find it pretty difficult to secure seats for domestic sectors. Thankfully, the airline has clamped down (somewhat) on the use of bots, so now we are competing (mostly) with humans.

[Zaphod]

Exactly. I wonder how often he actually uses Koru. And I think this is only for international flights where as soon as he lands, he would get presidential treatment.

The PM already gets to skip the long immigration queues, which ostensibly is one of the perks of EP1 membership at various airports.

[Beagle]

During the special promotions like we have seen today, I find it pretty difficult to secure seats for domestic sectors. Thankfully, the airline has clamped down (somewhat) on the use of bots, so now we are competing (mostly) with humans.

Yep...you had to be quick, I've never typed so fast :)

[Marilyn Munroe]

If entry to the exclusive lounge is for persons who are worth millions to the airline is Michael Cullen a member of the Cullen Airlines exclusive lounge?

Although handling his entourage of supermarket checkout operators, buliding site labourers, and sheep shearers whose taxes paid for the buy in would be problematic.

John Key is not a member, will he throw a hissy fit and sell to Etihad?

Boop boop de do
Marilyn

[Regi]

Looks like the $3 drinks are going to have to wait... :(

[Beagle]

$2.99 is that frustrating or what !! To add insult to injury during the closing 15 minute closing match process at one stage just before close the match price was $$3.00. Bugger.

[tzbang]

question is.. I wonder what happens after it breaks the $3 resistance?

[Beagle]

question is.. I wonder what happens after it breaks the $3 resistance?

Easy, according to Marlyin Munroe John Key throws a hissy fit and sells to Etihad :lol:

But I reckon she's in fantasy land and $3.50 will be coming before Christmas :D

[samdaman]

question is.. I wonder what happens after it breaks the $3 resistance?

We wait for $4

[KiwiGekko]

$2.99 is that frustrating or what !! To add insult to injury during the closing 15 minute closing match process at one stage just before close the match price was $$3.00. Bugger.

I reckon! I had my special drink at the ready & almost opened it before close. Oh well, maybe this week?

In related Airline news - it looks like Malaysia Airlines are having a bit of a rough(er) time with their CEO announcing massive layoffs: http://rt.com/business/263793-malaysia-airlines-technically-bankrupt/

What do people think, is this a good thing for AIR if Malaysia cuts some long haul routes, or more of a cautionary tale of how bad things can get in an extremely competitive industry?

[Regi]

$3!!!

Onwards AIR!

[Beagle]

:t_up::t_up::t_up:

[tzbang]

Bit early in the morning for drinkies.. perhaps tonight.
So.. how far away is $4? :t_up:

[winner69]

Is it too early for a good drink :D

Take the day off and have a long long lunch down the Viaduct somewhere

You might even come across Christopher .....if you do give him a hug ......and tell him his planes are safe and won't crash as winner has resisted the temptation to buy any AIR ....bound to crash if I did

[IAK]

Taihoa, put the champers on hold.

[tzbang]

Damn that didn't hold for long

[vin]

$2.90 sheesh big dump..

[Beagle]

Looks like $3 bought a bunch of skittish holders off from the side-lines. Bugger !!

[tzbang]

The $3 tower just grew too tall and tumbled backwards. :t_down:

[emveha]

Does anyone know how to put the cork back on a Champagne bottle? Asking for a friend.

[IAK]

Putting the cork back in is easy, but getting the bubbles back in is a lot harder - trying as I type lol.
Does anyone know how to put the cork back on a Champagne bottle? Asking for a friend.

[brend]

Bugger! Hopefully a positive announcement soon will take it over and keep it over $3.

Managed to get myself a free upgrade (ru) last week to prem economy. The service was excellent with the food a little bit better.

[Regi]

I'm tempted to top up a little at the current $2.90 sp... but what is with this decline from the 302 high yesterday? No major news as far as I can tell (aside from the notice this morning of Rob McDonald selling 20k) or is it just as Roger said, the skittish holders came off the sidelines as people can't believe AIR made $3 (which imo is a milestone in a continuing sp appreciation).

[winner69]

I'm tempted to top up a little at the current $2.90 sp... but what is with this decline from the 302 high yesterday? No major news as far as I can tell (aside from the notice this morning of Rob McDonald selling 20k) or is it just as Roger said, the skittish holders came off the sidelines as people can't believe AIR made $3 (which imo is a milestone in a continuing sp appreciation).

I remember in its glory days back in the 90s the share price was over 10 bucks. Then it all turned to custard and there was a big bail out.

Done well since though

[Baa_Baa]

In three years the SP has risen from $0.86 and been a good earner as well. It hasn't approached this SP level since Jun 2007, which is the highest SP in 15 years. Approaching historical highs at $3.00 / $3.10 might give cause for some to realise at least some of the capital gains.

[samdaman]

I'm tempted to top up a little at the current $2.90 sp... but what is with this decline from the 302 high yesterday? No major news as far as I can tell (aside from the notice this morning of Rob McDonald selling 20k) or is it just as Roger said, the skittish holders came off the sidelines as people can't believe AIR made $3 (which imo is a milestone in a continuing sp appreciation).

I reckon its the normal ebb and flow of trading. Itll go up some days, down others and as far as i can tell there have been no new pieces of information which effect the fundamentals.

[tzbang]

It will be interesting to see what happens when then annual results come out at the end of August

[winner69]

In three years the SP has risen from $0.86 and been a good earner as well. It hasn't approached this SP level since Jun 2007, which is the highest SP in 15 years. Approaching historical highs at $3.00 / $3.10 might give cause for some to realise at least some of the capital gains.

15 years ago AIR was $8.50 odd - down fron $15 odd a year earlier

How times have changed

[Xerof]

It's that pesky bearish bat that I mentioned months ago :cool: ($3.00 area would provide a lot of resistance)

Shouldn't worry long-termers though, it's just the wiggly lines telling fibs:ohmy:

[winner69]

It's that pesky bearish bat that I mentioned months ago :cool: ($3.00 area would provide a lot of resistance)

Shouldn't worry long-termers though, it's just the wiggly lines telling fibs:ohmy:

Squiggly Xerof, not wiggly

[Hoop]

It's that pesky bearish bat that I mentioned months ago :cool: ($3.00 area would provide a lot of resistance)

Shouldn't worry long-termers though, it's just the wiggly lines telling fibs:ohmy:

Nice pun Xerof...

Yeah.. Squiggly not wiggly...

Reference...Posted 15th February 2015 Post #2256
Hoop, a quick glance (as usual) at your chart throws out an almost textbook bearish bat formation nearly completed. Gut instinct (only) suggests it's a sell around $3

[Xerof]

Ah squiggly, yes of course

Welcome back Hoop, you have been missed, and I had given up on seeing a return

[tim23]

Winner69 - $10 I'd be surprised at that?!

[winner69]

Winner69 - $10 I'd be surprised at that?!

Just going by what ft.com says (and they seem consistent with what a Findata chart looks like)

Remember there was massive increase in the number of shares at bail out time in 2001/02 (and existing shareholder dilution)

Good story though but totally irrelevant to what is happening today (but a reminder things can turn to custard pretty quick in the airline business)

[Beagle]

I think there was a five for one share split or share issue, something like that. I'm not too sure it ever was $15 its just that historical charts that go back that far are representing the pre share split / share issue matter around the time of the recapitalisation, (I could be wrong, just going off memory). But W69 is quite right if you can find charts that go back to that time, I found one today, they show on an adjusted split / recap basis the price was $15 at one stage.

Might have to wait for a couple of years to get back there :)

[winner69]

I think there was a five for one share split or share issue, something like that. I'm not too sure it ever was $15 its just that historical charts that go back that far are representing the pre share split / share issue matter around the time of the recapitalisation, (I could be wrong, just going off memory). But W69 is quite right if you can find charts that go back to that time, I found one today, they show on an adjusted split / recap basis the price was $15 at one stage.

Might have to wait for a couple of years to get back there :)

Highest ever was $16.22 (adjusted for splits and all that) in January 1994 (ft.com)

I think there were A and B shares at one time. Can't recall what the difference was.

[Beagle]

Yes but I can't remember either.

Had a look back at the news items around the time of the re-cap. Govt bought in in the mid 20 cents per share range. Some would have us believe the Government is better off not investing in and protecting the national interest by supporting AIR at that time. Returns haven't been too shabby have they !!

[777]

Overseas residents could only own B shares.

New Zealanders could own both.

[martinchnz1]

Yikes what an unreasonable fall, hello top-up.

[Regi]

Yikes what an unreasonable fall, hello top-up.

I'm glad my temptaion to top up at 2.90 yesterday didn't happen but now... i'm really tempted. Anyone else thinking of a healthy top up at this price for the next $3 climb?

[vin]

Have been contemplating it yes. Didn't think it would go into the $2.80 region.

[tzbang]

very tempted.. if AIR wasn't already so over weight in my portfolio..

[couta1]

As an aside does anyone know what the N condition code stands for on the recent trade side of the depth chart? Seems to be popping up a lot over the last few days for a few stocks.

[forest]

As an aside does anyone know what the N condition code stands for on the recent trade side of the depth chart? Seems to be popping up a lot over the last few days for a few stocks.

N for Negotiated price.

[couta1]

N for Negotiated price.
Thanks Forest, apparently its basically the same as the SP code (An off market brokered sale but where the broker is acting for the buyer and the seller)

[dingoNZ]

N for Negotiated price.


Partly true - N means market crossing, ie a broker has done an on market transfer from one client to another, they were both parties in the trade (they didn't use the market depth to complete the trade).

[vin]

Went in for the topup

[Beagle]

N for Negotiated price.

Its nice to see you posting again mate.

I think the current $2.78 price is a good opportunity for anyone thinking of topping up, (as part of a well diversified portfolio).

[KiwiGekko]

Its nice to see you posting again mate.

I think the current $2.78 price is a good opportunity for anyone thinking of topping up, (as part of a well diversified portfolio).

And AIR's SP picks up. The Roger effect eh? I think its got a bit more to dip personally so will be holding off but will be looking to pick up a few more next week if it carries on south.

[dingoNZ]

And AIR's SP picks up. The Roger effect eh? I think its got a bit more to dip personally so will be holding off but will be looking to pick up a few more next week if it carries on south.


OPEC announcement tonight, expecting to continue oversupply, should see oil down over the weekend, I see upside on Monday morning, personally I'd be buying on weakness :)

[Beagle]

And AIR's SP picks up. The Roger effect eh? I think its got a bit more to dip personally so will be holding off but will be looking to pick up a few more next week if it carries on south.

Dunno about the Roger effect mate but i'll be with you next week buying if it head's a bit further south. If we team tag this bird it must head higher, right :D

[KiwiGekko]

OPEC announcement tonight, expecting to continue oversupply, should see oil down over the weekend, I see upside on Monday morning, personally I'd be buying on weakness :)

I guess we will see who is right soon enough, but for me things are not as rosy as they were a few months ago, with my watchlist having a lot more red in it than even 2 weeks ago. So with that in mind i'm happy for my spare cash to sit on the sideline waiting patiently for the right opportunity. As you mentioned it, I think oil savings are pretty well baked into the SP by now and the savings have been pretty well baked into flight prices also.

I'll be topping up in the dips (I last did around $2.67) - I just think it has a bit further to dip before I do so.

Have a great weekend all!

[KiwiGekko]

Dunno about the Roger effect mate but i'll be with you next week buying if it head's a bit further south. If we team tag this bird it must head higher, right :D

Haha, I am not sure my pennies have that much effect on the market - but we can sure try. ;)

[sb9]

From CNBC "Crude oil options sank at the fastest pace in years on Friday after OPEC decided to keep pumping crude at record rates, prompting traders to unwind bets they had placed ahead of the group's meeting to protect against possible wild fluctuations in futures prices."

it might be good start next week...got my parcel filled on Friday at $2.80, too good to miss out especially close the full year results and possible special divvy to mark 75 years, eh Roger ��

[Regi]

From CNBC "Crude oil options sank at the fastest pace in years on Friday after OPEC decided to keep pumping crude at record rates, prompting traders to unwind bets they had placed ahead of the group's meeting to protect against possible wild fluctuations in futures prices."

it might be good start next week...got my parcel filled on Friday at $2.80, too good to miss out especially close the full year results and possible special divvy to mark 75 years, eh Roger ��

Based on this... anyone else thinking of also topping up (or buying) Qantas which has closed at almost 30cps lower than its week high? I was thinking of it before this news.

[Baa_Baa]

AIR has had an amazing run since Jul 2012. Just consider what you're asking from it by buying at these prices. The monthly price chart suggests that an investor putting new money on the table now is prepared to risk their capital for a breakout of the June 2007 high. It may be a wise decision to ponder further why the price capitulated at $3.00 and where it might go to in th near term, before AIR takes on the challenge of an 8 year move above historical highs. Just saying.



Based on this... anyone else thinking of also topping up (or buying) Qantas which has closed at almost 30cps lower than its week high? I was thinking of it before this news.

[samdaman]

AIR has had an amazing run since Jul 2012. Just consider what you're asking from it by buying at these prices. The monthly price chart suggests that an investor putting new money on the table now is prepared to risk their capital for a breakout of the June 2007 high. It may be a wise decision to ponder further why the price capitulated at $3.00 and where it might go to in th near term, before AIR takes on the challenge of an 8 year move above historical highs. Just saying.

I'm a fond believer in fundamentals and those fundamentals have correlated pretty well historically with an average PE of 11ish and I'd say that is with a safety factor (safety factor may sound strange, I'm set in my engineering ways and I'll never change :D) forward earnings are looking good, so when looking at the chart I could make a lot of assumptions about moving averages, resistance levels and patterns. However if they post annual EPS levels of above 30 cps which I think is likely. I don't want to be looking back from the sidelines at the missed opportunity. Plus great dividend, plus great company, plus I'd have a look into these figures and not trust me, plus all that jazz.

Sam

[dingoNZ]

Having flown AIR to Shanghai last month it once again reassured they are the absolute standout airliner, their service is first class and the operate in a very professional manner. Currently only hold a small parcel but have been topping up on retractions. Future is looking bright, strong growth in North/South American routes, forward curve for crude remaining below the LT average and management actively seeking promising opportunities.

[Beagle]

From CNBC "Crude oil options sank at the fastest pace in years on Friday after OPEC decided to keep pumping crude at record rates, prompting traders to unwind bets they had placed ahead of the group's meeting to protect against possible wild fluctuations in futures prices."

it might be good start next week...got my parcel filled on Friday at $2.80, too good to miss out especially close the full year results and possible special divvy to mark 75 years, eh Roger ��
Yes, super flight down to Chch this morning to the SCL meeting. All staff extremely professional. Chris Luxon a top leader, undemanding fundamentals, all looks very promising.

[winner69]

Yes, super flight down to Chch this morning to the SCL meeting. All staff extremely professional. Chris Luxon a top leader, undemanding fundamentals, all looks very promising.

Yes, super visit to the Heartland bank this morning. All staff extremely professional. Jeff Greensleeves top leader, undemanding fundamentals, all looks very promising.

Jeez, did you really say that ...ha ha?

Spose it all matters what colour the tinted lenses are!

[sb9]

Yes, super flight down to Chch this morning to the SCL meeting. All staff extremely professional. Chris Luxon a top leader, undemanding fundamentals, all looks very promising.

Couldn't agree more Roger.

Have listened to Chris Luxon on Larry Williams(Newstalk ZB) business show few times in the evenings and he comes across as such an inspiring leader with clear vision for the company. He's a pleasure listen to albeit you are a shareholder or not, very articulate.

PS: Good luck Roger for the SCL meeting and look forward to yours and Percy's thoughts on the same.

[slimwin]

I wasn't impressed by my Shanghai flight in business a few weeks ago. I thought the food has reallly slipped. Especially the south bound breakfast. Wine was excellent of course. FSM was also excellent, but I had problem understanding two of the other staff. It sure didn't feel like a NZ airline. The 777-200 without re-fit is showing it's age too.
Yes, an excellent airline but for that business price,you must get it right every time.

[Hoop]

I'm a fond believer in fundamentals and those fundamentals have correlated pretty well historically with an average PE of 11ish and I'd say that is with a safety factor (safety factor may sound strange, I'm set in my engineering ways and I'll never change :D) forward earnings are looking good, so when looking at the chart I could make a lot of assumptions about moving averages, resistance levels and patterns. However if they post annual EPS levels of above 30 cps which I think is likely. I don't want to be looking back from the sidelines at the missed opportunity. Plus great dividend, plus great company, plus I'd have a look into these figures and not trust me, plus all that jazz.

Sam

Sure Sam, times for AIR are good atm but keep at the back of your mind that Airline shares are cyclical stocks..Cyclic stocks always look terrific during econonic good times (rockstar economies:)) but they can turn bad very quickly...Google cyclic stocks and read about cyclical stock behaviour (https://www.google.co.nz/search?newwindow=1&q=Cyclical+stock+behaviour&oq=Cyclical+stock+behaviour&gs_l=serp.12...747146.761001.0.766580.31.29.0.2.2. 0.334.5939.2-23j1.24.0....0...1c.1.64.serp..8.23.5251.0.6J-4aT8e8V0).

AIR's past has been a textbook example of a cyclical stock and since AIR is still the same animal (Airline business), us investors should expect that cyclical type behaviour to continue in the future.

AIR performance atm is running true to the cyclical stock behavioural pattern, it has been in a very strong primary uptrend since July 2012 (typically out performs the market) and AIR's shareprice has so far risen +300% all within this so-called NZ's "rockstar" economy period.

Cyclical Stocks behave cyclically, in other words history repeats (with differing degrees). Being cyclical means it keeps on repeating. These stocks can be great investments when you keep to the specific discipline that at some point no matter how much you love this stock you will realise your profits and then stay out for half of the next cycle pattern when these cyclical stocks typically under-performs the market.



History of when fundamental forward analysis went horribly wrong in 1999
when the NZ economic boom wound down in 1999 the stock brokers forecasts were still very optimistic (considering professional people should know all about cyclical stock behaviours when the western world economy comes off the boil and enters recession).. but I think at the time the analysts heads were clouded with optimism, with Air NZ having recently joined the Star Alliance, the looming Sydney Olympics and AIR's booming current business performance with PE of ~8... Analysts average forecast for the following year 2001 was projected for $219.9m and a forecast PE of just under 6, a dividend of 15c/s (7.5%) using that current shareprice...great analytical news eh?..so why was the chart diverging showing that the price had already topped out around the $4.30 mark way back in mid 1997 which turned into a primary downtrend breaking TA $3.00 supports in Jan 1998?

My earlier post (Post#2255 15th Feb 2015) (http://www.sharetrader.co.nz/showthread.php?1088-AIR-NZ/page151) diagram shows part of the answer with history.. the red arrows show the 2001 brokers forecast of 219.9 being downgraded to a -10.3M forecast the following year when the broker factored in the previous "unforeseen" 2000-2001 recession.

My opinion here is that when dealing with cyclical stocks the state of the various Country's economies seem to be the major factor (see typical cyclical stock histories), therefore a major part of investors focus should be on the present state of countries economies that AIR is involved in rather than on brokers or everyone elses fundamental forward projections..OK Ansett had a lot to do with Air NZ woes back in 2001 but remember Ansett was a cyclic stock too..

The interesting thing back in 1998 was that charting actually gave investors an early warning signal to sell shares while the brokers (fundamental foreward projections) gave investors the thumbs up to buy more shares.

[Beagle]

Economy is hardly rock star, anything but and yet we see from the most recent monthly operating stat's that RPK's are up strongly as are load factors.
Could it be that air fares are now so cheap in real terms that people think nothing of getting on a plane and whipping down to Chch for a day to see their friends ?

Lots of new immigrants are also adding fuel to the domestic engine and with tourism growing strongly and potentially even stronger now we're a bit cheaper from a lower currency all those tourists coming here are feeding into the domestic network.
I've flown a fair bit lately around the country and everywhere you go the planes are near to full capacity.

[blackcap]

Economy is hardly rock star, anything but and yet we see from the most recent monthly operating stat's that RPK's are up strongly as are load factors.
Could it be that air fares are now so cheap in real terms that people think nothing of getting on a plane and whipping down to Chch for a day to see their friends ?

Lots of new immigrants are also adding fuel to the domestic engine and with tourism growing strongly and potentially even stronger now we're a bit cheaper from a lower currency all those tourists coming here are feeding into the domestic network.
I've flown a fair bit lately around the country and everywhere you go the planes are near to full capacity.

I think you may be onto something here. I think nothing these days of whipping up to Auckland whereas in the past it would have required a lot more consideration. Although I generally do only pay for the "seat only" cheap flights and will not pay $300 for a one way to Auckland from Wellington unless another is paying.

[sharp]

I think you may be onto something here. I think nothing these days of whipping up to Auckland whereas in the past it would have required a lot more consideration. Although I generally do only pay for the "seat only" cheap flights and will not pay $300 for a one way to Auckland from Wellington unless another is paying.

Contrary to buying cheap seats. On business trips, I am quite happy to pay for the full price - so that I have flexibility with times and dates. Thoroughly believe in it's worth.

On holidays, I am also happy to fork out an extra few dollars for the premium seats or if the Star Alliance upgrades are unavailable.

I question whether the cheap seats are where profits are generated or whether they are seat fillers that is icing to the cake.

On a side note.

http://www.stuff.co.nz/travel/news/69223284/air-new-zealand-signs-codeshare-with-air-india

[sharp]

With comments this being a cyclic stock, I agree with those sentiments. I suffered significant losses arising from the the downturn in 2008/2009 - rising crude oil prices at the time.

Now with falling oil prices and comments from OPEC and Iran that they intend to increase supply - will the great run by Air NZ be further extended?

Add to that fuel efficient airplanes and codeshares - don't forget the direct GPS routing system that they have been touting (more fuel savings).

Look forward to hearing members views on tis.

[samdaman]

Good post Hoop, I understand the essence of your post however in your prior post that you've linked to (and correct me if I'm mistaken) but wasn't the problem back then the company under performing broker expectations greatly? Now I also understand that history can repeat itself and that we could see a result greatly below broker's forecasts and investor expectations. Well I like to think I'm not too attached to this stock as to not get out when I see results that aren't to my liking. Until that time AIR doesn't seem to be putting out information detrimental to what I would call an undervalued price. So to address what I should keep in the back of my mind, I'm with AIR for a good time, not a long time :)

Sam

[Hoop]

Hi Guys
good debate stuff
Yeah there's been some big fundamental positives lately.
Sharp..yes falling oil prices should have a positive effect but I've charted AIR price with Oil price several times over the years and there's little to no medium term coallation..so there is a theoretical anomally here... The only explainations I can think of why there's lack of correlation to the shareprice is:-1... the hedging strategy AIR prevents the airline from benefiting immediately from the drop...It seems some airlines which have either no hedging e.g China airways or a lesser ratio hedging policy in place may gain a competitor advantage during this period 2.....Sometimes a falling oil price is a result of a global recession..A terrible time for most businesses with lack of demand . 3.....the oil price, accounts for a third of AIR running costs,so the benefits could be masked by other unrelated negative factors effecting AIR shareprice

The other positive is the lower NZ$...I continually read the chairman reports bitching about the high dollar..yet NZ$ fluculations produces another theoretically anomally as there is again little to no correlation over the medium term when charted with AIR shareprice price..The only explanations I can think of is...1 when the NZ$ drops it often coincides with a downturn in the NZ economy (and/or developed nations). 2...the NZ$ fall benefits are masked by other negative factors effecting AIR shareprice.

However both positives do have very short term market positive effects such as same day media announcement but Mr Market then seems to forget.

Yep Roger being shareholders it always nice to see full planes and lots of them..eh:) ..hope this continues...

[tzbang]

It would be good to hear Roger and Modandm weigh in their opinions on some of this. I'm somewhat surprised about the sustained downward pressure since seeing $3, esp with the oil price recovery falling over. What looked like finicky holders scrambling to realise some profits at a high point seems to have continued longer and lower than I was expecting.

[neyney2010]

Relax everybody. Chris is relaxed.
7402

[sb9]

http://www.3news.co.nz/business/air-nz-pairs-with-air-india-2015060915#axzz3cX1G3NFb

[Zaphod]

A couple of years ago there was some rumour regarding AKL-BOM, but Luxon stated that the sacrifice of passengers/cargo would be too great to enable this route. The code-sharing arrangement (thankfully with another *A carrier) makes good sense. I can't see AIR entering that market directly.

[sharp]

http://www.afr.com/business/transport/aviation/global-airlines-to-join-qantas-in-producing-higher-returns-iata-20150608-ghjf3c

Guys and girls. See above.

[Biscuit]

http://www.afr.com/business/transport/aviation/global-airlines-to-join-qantas-in-producing-higher-returns-iata-20150608-ghjf3c

Guys and girls. See above.

Yes, airlines are all making more money, great: more profit, which will lead to increased capital which will lead to more capacity which will lead to...

[Beagle]

Yes, airlines are all making more money, great: more profit, which will lead to increased capital which will lead to more capacity which will lead to...
Just as well there's an eight year lead time on many new aircraft models then isn't it :)

Not much to add at this stage other than the market has been generally soft since AIR hit $3. Surely nobody expects smooth flying conditions all the time ?

Suggest people keep a close eye on the monthly operating statistics. I was very impressed with the last set. What other business tells you its load factors, RPK's and yield on a monthly basis.
Surely this is all the evidence people need to know that this bird is flying very sweetly indeed.

[Biscuit]

Just as well there's an eight year lead time on many new aircraft models then isn't it :)



Yes, buy extra aircraft at top of the cycle and take possession at the bottom! But yes, agree the outlook is still positive

[Jaa]

Just as well there's an eight year lead time on many new aircraft models then isn't it :)

Roger, you have said this before but this is only one side of supply/demand balance.

Airlines only need to hang on to their older gas guzzling planes for longer to add extra capacity, something low oil prices makes desirable.

Even Air NZ have said they are looking to do this with their 767s, witness the extra 767 flights to Perth just announced.

[Marilyn Munroe]

Just as well there's an eight year lead time on many new aircraft models then isn't it :)

I hope those A380's Malaysian Airlines has for sale don't end up dogfighting with Cullen Airlines on their near monopoly routes.

Boop boop de do
Marilyn

[Jaa]

Hi Guys
good debate stuff
Yeah there's been some big fundamental positives lately.
Sharp..yes falling oil prices should have a positive effect but I've charted AIR price with Oil price several times over the years and there's little to no medium term coallation..so there is a theoretical anomally here... The only explainations I can think of why there's lack of correlation to the shareprice is:-1... the hedging strategy AIR prevents the airline from benefiting immediately from the drop...It seems some airlines which have either no hedging e.g China airways or a lesser ratio hedging policy in place may gain a competitor advantage during this period 2.....Sometimes a falling oil price is a result of a global recession..A terrible time for most businesses with lack of demand . 3.....the oil price, accounts for a third of AIR running costs,so the benefits could be masked by other unrelated negative factors effecting AIR shareprice

The other positive is the lower NZ$...I continually read the chairman reports bitching about the high dollar..yet NZ$ fluculations produces another theoretically anomally as there is again little to no correlation over the medium term when charted with AIR shareprice price..The only explanations I can think of is...1 when the NZ$ drops it often coincides with a downturn in the NZ economy (and/or developed nations). 2...the NZ$ fall benefits are masked by other negative factors effecting AIR shareprice.

However both positives do have very short term market positive effects such as same day media announcement but Mr Market then seems to forget.

I agree Hoop, in the medium term there is little correlation between oil prices, exchange rates and airline share prices. Capacity and price changes are to elastic for that.

To me, the drivers of Air NZ's share price growth have been:


Excellent management over more than a 10 year period across most areas of the business. e.g. Staff morale, new planes, route optimisation and now well chosen and executed route expansion.
Increase in NZ's attractiveness as a tourist destination driven by LOTR and The Hobbit. Especially in the US.
Free trade agreement with China and relaxing of Chinese travel restrictions.
Commerce Commission's willingness to accept the argument that for NZ the benefits outweigh the costs of Airline alliances. Air NZ's alliances with Virgin Australia, Cathay Pacific and now Singapore Airlines are very profitable.
Rational competitor behaviour, especially from a weak Qantas/JetStar group.
High migration to and from NZ
Economic growth in NZ


No doubt there are more, but these are the areas I am looking at for Air NZ's future fortunes. So far so good.

[Hoop]

I agree Hoop, in the medium term there is little correlation between oil prices, exchange rates and airline share prices. Capacity and price changes are to elastic for that.

To me, the drivers of Air NZ's share price growth have been:


Excellent management over more than a 10 year period across most areas of the business. e.g. Staff morale, new planes, route optimisation and now well chosen and executed route expansion.
Increase in NZ's attractiveness as a tourist destination driven by LOTR and The Hobbit. Especially in the US.
Free trade agreement with China and relaxing of Chinese travel restrictions.
Commerce Commission's willingness to accept the argument that for NZ the benefits outweigh the costs of Airline alliances. Air NZ's alliances with Virgin Australia, Cathay Pacific and now Singapore Airlines are very profitable.
Rational competitor behaviour, especially from a weak Qantas/JetStar group.
High migration to and from NZ
Economic growth in NZ


No doubt there are more, but these are the areas I am looking at for Air NZ's future fortunes. So far so good.

Thanks for the Good post Jaa

[winner69]

Yes, airlines are all making more money, great: more profit, which will lead to increased capital which will lead to more capacity which will lead to...

Current low fuel prices and interest rates are certainly boosting airline profits at the moment.

Over the years though even though airlines has always been a growth industry it generally shows a chronic lack of profitability. The problem has always been that capacity has always grown at rates that are unrelated to the underlying growth in demand.

These days there does seem to be more discipline in that respect, hence the current increase in load factors ......an additional boost to profits

When cyclical factors such as fuel prices and interest rates turn against airlines that discipline needs to remain.

[percy]

On another thread Blackcap posted about our changing attitude to flying.Today we think nothing of flying here there and everywhere.
I know 5 to 10 years ago it was a huge deal for me to think of going to Auckland to buy books, or do business.$500 to $700 and perhaps $120 for a motel for the night.Today I can get return fights for under $100.Rental car for $80 for a day.[In fact I have a $48 return flight booked]On Monday Noodles and Roger flew from Auckland to ChCh for the Scales ASM.My friend was given tickets to the "field days" so has decided to fly up for them.Grandparents are flying to visit the grand children.With the prices coming down more people are flying.
So make it affordable and people will use it.Growing market makes it easier for a well run airline to get it right.AIR have the right management,the right aircraft and are investing to provide better facilities and service.

[winner69]

Percy - so right but many in the provinces would say they are missing out on the fun

[Biscuit]

On another thread Blackcap posted about our changing attitude to flying.Today we think nothing of flying here there and everywhere.
I know 5 to 10 years ago it was a huge deal for me to think of going to Auckland to buy books, or do business.$500 to $700 and perhaps $120 for a motel for the night.Today I can get return fights for under $100.Rental car for $80 for a day.[In fact I have a $48 return flight booked]On Monday Noodles and Roger flew from Auckland to ChCh for the Scales ASM.My friend was given tickets to the "field days" so has decided to fly up for them.Grandparents are flying to visit the grand children.With the prices coming down more people are flying.
So make it affordable and people will use it.Growing market makes it easier for a well run airline to get it right.AIR have the right management,the right aircraft and are investing to provide better facilities and service.

That sounds like a virtuous cycle: increased profits leads to increased capacity leads to lower airfares leads to more people flying leads to increased profits... There may be some truth to that but it has to break down somewhere. Also, I just wonder how vulnerable AIR are now to competitors: budget airlines whose main costs are fuel and airlines that do not have fuel hedges in place? I'm holding so just playing "devil's advocate"

[iceman]

Percy - so right but many in the provinces would say they are missing out on the fun

Too right winner. I don't know how many times my wife has tried to book grab a seat from Nelson but never gets them at a time that remotely suits us. The costs to fly to and from Nelson are a rip off.

[blockhead]

Coming back from Brisbane yesterday I saw something I haven't seen for a while.....an empty seat !...just one though and it was on the codeshare Virgin plane so might not be an indication of bail out time yet !

[winner69]

Too right winner. I don't know how many times my wife has tried to book grab a seat from Nelson but never gets them at a time that remotely suits us. The costs to fly to and from Nelson are a rip off.

Can't even fly wellington to taupo anymore and wellington Rotorua is hopeless and a ripoff

Sad state of affairs

Nelson and surrounding lovely place. Always enjoy the odd break down that way but generally take the car across on the ferry if more than 1 of us.

[KiwiGekko]

Interesting article this morning: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11462743 - what are peoples thoughts here for AIR?

[Biscuit]

Interesting article this morning: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11462743 - what are peoples thoughts here for AIR?

Well, I thought we were going to have to wait 8 years for more capacity? But I guess more capacity will lead to lower fares which will expand the market which is all good... right?

[Regi]

Down to $2.75... I just want to top up more and more but it is already so overweight in my portfolio and these lower prices keep coming. Market really doesn't want to touch that $3 mark it seems.

[Biscuit]

Interesting:

"American Airlines, which merged with US Airways, last year adopted that carrier's policy of not hedging, which allowed American to take full advantage of the steep plunge in fuel prices. The result was more than $600 million in fuel savings for American Airlines for 2014, with even bigger savings expected this year if fuel costs stay low. "We believe 2015 will be yet another record year, exceeding the earnings from 2014," Parker said."

Damn those Yanks eh?

[Beagle]

AIR have very little fuel hedging in place for FY16.

Spoke to the GM of one of the major Australian owned real estate franchises yesterday who's flying all around N.Z. all the time visiting their various braches...everywhere you go planes are full or very close to full he said.

8 years lead time for many new aircraft doesn't stop existing operators deploying existing aircraft on new routes.

Plenty of people were calling some of the regional routes served by the Beechcraft 19 seat aircraft as a rip off have now been proved to be wrong as AIR has withdrawn unprofitable services and those same people in many cases now face flying with single engine single pilot op's which clearly have a different safety level...so be careful what you wish for you people who live in remote area's. Nelson not remote but there's obviously more efficiencies flying 170+ seat A320's than smaller planes.

AIR on a prospective PE of 7 times FY16 earnings v market average of 18 times for the NZX50. People will believe its either cyclical or that we are entering a golden era where baby boomers will think nothing of travelling here there and everywhere. All depends upon which way you're looking at things.

Bargain time ?...you be the judge.

[Biscuit]

AIR have very little fuel hedging in place for FY16.......
AIR on a prospective PE of 7 times FY16 earnings v market average of 18 times for the NZX50. People will believe its either cyclical or that we are entering a golden era where baby boomers will think nothing of travelling here there and everywhere. All depends upon which way you're looking at things.

Bargain time ?...you be the judge.

I think they are 62% hedged 2nd half 2015 and 18% 1st half 2016 so not going to be material effect going forwards. I don't believe in golden eras myself. Am 130% up on this one so probably ready to take a little profit which maybe clouds ones view.

[Biscuit]

er, make that 128%

[Beagle]

I think they are 62% hedged 2nd half 2015 and 18% 1st half 2016 so not going to be material effect going forwards. I don't believe in golden eras myself. Am 130% up on this one so probably ready to take a little profit which maybe clouds ones view.

What presents as better value ? is the question I keep coming back too no matter how much altitude one has gained on this bird.
In exactly three weeks time they start enjoying what are ostensibly unhedged and much lower average effective oil prices than previously paid. They also have excellent forward cover on currency.
I'm loving this SP air pocket they've hit, just waiting for a few more nervous nellies to want to jump ship and then...

[biker]

http://www.nzherald.co.nz/business/n...ectid=11462743

In a statement the airlines said ''the enhanced relationship also provides opportunities for future growth into trans-Pacific markets not currently served by either airline, such as New Zealand.''


Competition on the Auckland to West Coast USA routes has always been one of AIR's major risks. The competition is now knocking at the door. It seems inevitable that a QF-AA operation through Auckland will follow on from this new revenue sharing arrangement and this will hurt AIR's profits.
It would seem the market agrees.
The AIR shareprice may find it up hill from here longer term.

[tzbang]

I'm loving this SP air pocket they've hit, just waiting for a few more nervous nellies to want to jump ship and then...

Stuck between wanting to load up .. and my rules regarding overweight stocks in my portfolio.. but.. it looks too good to ignore!

[Jantar]

er, make that 128%
Well done. I'm 3.6% down and I've only been a holder for less than 3 hours. :(

[Beagle]

Stuck between wanting to load up .. and my rules regarding overweight stocks in my portfolio.. but.. it looks too good to ignore!

I know exactly how you feel mate. I am very, very tempted to break my maximum 10% portfolio allocation to any one stock rule.

[Biscuit]

I know exactly how you feel mate. I am very, very tempted to break my maximum 10% portfolio allocation to any one stock rule.

Jeeze, looks like its just me buying then

[Regi]

$2.68 now... When will it stop, seems like a few of us are on the fence about buying... what will be your trigger point?

[KiwiGekko]

Well done. I'm 3.6% down and I've only been a holder for less than 3 hours. :(

This was my first experience buying AIR too. Timing your entry is really difficult to get right. Hang in there mate I am confident it'll come back (and I have added to my holding today).

[Exodia]

$2.68 now... When will it stop, seems like a few of us are on the fence about buying... what will be your trigger point?
Bought in at $2.69, seems like a bargain at present. Happy to join the party.

[sb9]

Yeah, tempting to add more at these levels.

[brend]

Lol I added more yesterday at $2.83.

It's all short term movements today and remain optimistic the end of year result will be very positive.

Qantas can continue to fly its gas guzzling b747 for all they want. It's not the future of flying and they in my mind carry bigger risks than air.

With air adding 10% capacity, plenty of growth in the bottom line to come and cost savings driven by newer planes (787 and a320s) and supply chain improvements.

[Fox]

It's all short term movements today and remain optimistic the end of year result will be very positive.

This is what is going on IMO, just little squiggly lines on an uptrend scenario. Provides great buying opportunities! (Topped up @ 2.69)

[Robomo]

With air adding 10% capacity, plenty of growth in the bottom line to come and cost savings driven by newer planes (787 and a320s) and supply chain improvements.

Had a chat with one of the 787-9 pilots recently, he affirmed the spectacular savings the planes are making. Very confident that AirNZ will be taking up the outstanding 8 787-9 options they have in place with Boeing. Sooner rather than later. Perth flights going very well and the 767's keep soldiering on as demand increases.

[Jaa]

Had a chat with one of the 787-9 pilots recently, he affirmed the spectacular savings the planes are making. Very confident that AirNZ will be taking up the outstanding 8 787-9 options they have in place with Boeing. Sooner rather than later. Perth flights going very well and the 767's keep soldiering on as demand increases.

An example of the excellent management Air NZ has had was the addition of winglets to their 767s. The cost/benefit was pretty marginal at the time for a plane due to be retired in a few years. But with the planes being kept for longer than planned will have been well worth it.

So even in the older planes, Air NZ has an efficiency advantage.

[Jaa]

Love this comment on Plane Talking (http://blogs.crikey.com.au/planetalking/2015/06/10/qantas-to-returns-to-sfo-and-american-to-fly-lax-non-stops/):


Jeez! This is 4th time AA has ‘entered’ [re-entered] the AUS market! [Rob't Crandall, aka
'Fang' last exited in the early '90's].

Ben, is re entering SFO for qantas expensive? Haven’t they given away their gate access when IT exited the city five years back?

Last, how long can these 747-400′s last?

Air NZ with their current product, service and cost model should be able to kill off either AA or Qantas on any NZ-US direct route in a year or two. The "kill" will hurt profits for a couple of years though.

Even without competition on NZ-US routes a stronger Qantas/AA trans pacific network will still hurt Air NZ. Their SFO route is popular with Australians and Americans, who transit Auckland.

This is a really a poor man's strategy from Qantas though as they lack long haul aircraft. Instead of handing AA some of their capacity to LA and reducing capacity from Melbourne to squeeze in a less than daily service to SFO they should be adding a daily flight to SFO with their own new aircraft.

[Beagle]

Watch AIR deploy a brand spanking new Dreamliner on SFO route and take them on regarding price. Better all new technology aircraft, better flight experience and I understand they're getting more than the design spec 20% fuel efficiency advantage.

If I remember correctly AIR have 3 more 787-9's coming this year...what odds they'll deploy one on the SFO route ?

[brend]

Wouldn't say so Roger. They need them for Shanghai and Tokyo so the 787 is a daily service.

This should then free up some 777s for Houston and South America

[biker]

Watch AIR deploy a brand spanking new Dreamliner on SFO route and take them on regarding price. Better all new technology aircraft, better flight experience and I understand they're getting more than the design spec 20% fuel efficiency advantage.

If I remember correctly AIR have 3 more 787-9's coming this year...what odds they'll deploy one on the SFO route ?

Very much doubt that. They would have to reconfigure the 787 cabin to compete on that route and then it wouldn't carry the load.

Better to find some more 777's somewhere and increase the frequency.

[Hoop]

Hmmm.... came out of self exile last week written 4 posts..... 3 on AIR thread... as a warning as how dangerous cyclicals can be......My post timing was no accident!!...Hint..think squiggly not wiggly

Edit: Good chance tommorrow for a bounce off the 267 close ...

[Joshuatree]

http://www.nzherald.co.nz/business/n...ectid=11462743

In a statement the airlines said ''the enhanced relationship also provides opportunities for future growth into trans-Pacific markets not currently served by either airline, such as New Zealand.''


Competition on the Auckland to West Coast USA routes has always been one of AIR's major risks. The competition is now knocking at the door. It seems inevitable that a QF-AA operation through Auckland will follow on from this new revenue sharing arrangement and this will hurt AIR's profits.
It would seem the market agrees.
The AIR shareprice may find it up hill from here longer term.


Possibility of new US flights (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11462743) i couldn't open your link biker.Hope this works. There is quite abit of EUPHORIA in these threads ; which always sends warning bells to me. And bikers thread has been ignored amongst the backslapping. I don't know if his thread is a pertinent warning or not ,Be great to have an unbiased comment from those who know AIR inside out.
Thanks to biker and Hoop for your contrary posts.

[theace]

http://australianaviation.com.au/2015/06/air-nz-looking-to-extend-the-life-of-767-fleet/

[Baa_Baa]

It's that pesky bearish bat that I mentioned months ago :cool: ($3.00 area would provide a lot of resistance)

Shouldn't worry long-termers though, it's just the wiggly lines telling fibs:ohmy:

I bookmarked this beguiling post from Xerof, wondering whether it went over the heads of the loyal. How about explaining the Bat formation and it's basis in fibonacci, and more importantly if it is in play what happens next and over what timeframe? It's an intriguing and high probability study. Wouldn't be surprised if it correlates to Hoops views on cyclicals as well.

[Beagle]

http://australianaviation.com.au/2015/06/air-nz-looking-to-extend-the-life-of-767-fleet/

Thanks. Love this bit.

Luxon said Air NZ’s three 787-9s currently in service had performed better than the airline’s own lofty expectations.

I hear its a whopping 23% fuel savings, 3% more than manufacturers design spec. Looking forward to a full fleet of 18 of these all new generation aircraft in due course.
C.L. has also said that customer feedback on this new type has been really good.

Another article in the Herald today regarding AA and Qantas...hopefully a lot more sellers get their knickers in a twist.... and then its hammer time !!

[winner69]

So tempting to buy despite bats and cyclical things

But the winner tempt fate conscience effect would only complement things and the price would crash to $1.50 along with the hundreds of deaths.

For your sakes I will stay out .....for now

[Xerof]

I bookmarked this beguiling post from Xerof, wondering whether it went over the heads of the loyal. How about explaining the Bat formation and it's basis in fibonacci, and more importantly if it is in play what happens next and over what timeframe? It's an intriguing and high probability study. Wouldn't be surprised if it correlates to Hoops views on cyclicals as well.

I think anyone who has an understanding of basic TA would 'get' my "beguiling" comments. I'm not about to commence an educational program on these threads, as whilst I think there is a place for TA, plenty on here don't, and I'm the last person to push it down peoples throats.

The internet has limitless information on TA available for any students of the craft. Use key words like fibonacci, harmonics, elliot wave theory, dow theory as starters for those with the time to study it. Candlestick charting is another fascinating study of market behaviour well worth spending a few years on too.

I'm happy to offer my observations as the occasion arises. Less is better....but understand that my very occasional comments are usually just spontaneous observations based on casting a glance at a naked candle chart. (looking too hard is often fruitless, I have found, and I stay well away from the myriad of 'indicators')

[Joshuatree]

http://www.nzherald.co.nz/business/n...ectid=11462743

In a statement the airlines said ''the enhanced relationship also provides opportunities for future growth into trans-Pacific markets not currently served by either airline, such as New Zealand.''


Competition on the Auckland to West Coast USA routes has always been one of AIR's major risks. The competition is now knocking at the door. It seems inevitable that a QF-AA operation through Auckland will follow on from this new revenue sharing arrangement and this will hurt AIR's profits.
It would seem the market agrees.
The AIR shareprice may find it up hill from here longer term.

Spot on Biker

Threat of competition hits Air NZ stock (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11463112)

[Beagle]

Spot on Biker

Threat of competition hits Air NZ stock (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11463112)

Nice picture of a lovely shiny new A380...but they're using a crappy old 747 on that route. Not happening until December 2015 at earliest and I am certain AIR will put a brand spanking new Dreamliner on that route to blow them out of the water with product quality. You mark my words, AIR's senior management will already be planning their counter measures. Current price is a brialliant place for anyone looking to top up IMHO. I will stick to my maximum 10% portfolio allocation for now but if it falls much further the rule book might get thrown out the window.
Consensus broker EPS for 2016 is 40 cps. Forward PE 6.55.

[neyney2010]

Nice picture of a lovely shiny new A380...but they're using a crappy old 747 on that route. Not happening until December 2015 at earliest and I am certain AIR will put a brand spanking new Dreamliner on that route to blow them out of the water with product quality. You mark my words, AIR's senior management will already be planning their counter measures. Current price is a brialliant place for anyone looking to top up IMHO. I will stick to my maximum 10% portfolio allocation for now but if it falls much further the rule book might get thrown out the window.
Consensus broker EPS for 2016 is 40 cps. Forward PE 6.55.

Rog, wtf's going on? I was expecting a bounce back to 3 bucks today.

I'm also 10% portfolio allocation as well. Let me know when you go in. I'll back my truck up.

[Beagle]

Sentiment mate...that's all it is. I'll let you know. We're only three months away from a juicy final divvy and maybe a special divvy too with this being the 75th year and all.

[Regi]

Nice picture of a lovely shiny new A380...but they're using a crappy old 747 on that route. Not happening until December 2015 at earliest and I am certain AIR will put a brand spanking new Dreamliner on that route to blow them out of the water with product quality. You mark my words, AIR's senior management will already be planning their counter measures.

Although AIR can top quality, a lot of people will go for the cheaper option. I know very few people who will restructure plans, convenience and cost in order to spend ~12 hours of their life in a slightly newer bit of metal. The reality is that the large majority of people don't care what plane it is (to some degree) so long as it gets them safely and comfortably from A to B at a time and cost that suits them. Of course, there are exceptions.
But yes, counter-measures will certainly be deployed and not to forget AIR has new avenues opening up such as Buenos Aires (also in December this year, funny that).

[Regi]

Rog, wtf's going on? I was expecting a bounce back to 3 bucks today.

I'm also 10% portfolio allocation as well. Let me know when you go in. I'll back my truck up.

I'm also rearing to go, decided I can break my proportion rules on this one too.

[Beagle]

Although AIR can top quality, a lot of people will go for the cheaper option. I know very few people who will restructure plans, convenience and cost in order to spend ~12 hours of their life in a slightly newer bit of metal. The reality is that the large majority of people don't care what plane it is (to some degree) so long as it gets them safely and comfortably from A to B at a time and cost that suits them. Of course, there are exceptions.
But yes, counter-measures will certainly be deployed and not to forget AIR has new avenues opening up such as Buenos Aires (also in December this year, funny that).

They can match them on price mate...they'll be using state of the art 787-9's that run on the smell of an oily rag v clapped out old four engine 747's that burn fuel like Qantas is owned by the Saudi's.
Less than 3 weeks and AIR are free of previously fairly expensive oil futures. Yep, also Houston and more flights to / from Perth, new Singapore route that's going great guns too.

[neyney2010]

I'll probably can still sleep well at ~12-15%
At one point I had GNE and HNZ on similar figures.

[Beagle]

I'll probably can still sleep well at ~12-15%
At one point I had GNE and HNZ on similar figures.

Yep I was up close to 20% on AIR GNE and HNZ but found that didn't suit my personality type, (natural worry-worm) but what you've suggested would probably work okay.

[neyney2010]

Sentiment mate...that's all it is. I'll let you know. We're only three months away from a juicy final divvy and maybe a special divvy too with this being the 75th year and all.

Will find out shortly the extent of staff bonuses for this FY. May give us a good indicator if there'll be a juicy special divvy. Big fat final divvy is a given.

[brend]

They can match them on price mate...they'll be using state of the art 787-9's that run on the smell of an oily rag v clapped out old four engine 747's that burn fuel like Qantas is owned by the Saudi's.


No sure if you saw our posts above but it would be an irrational decision doing so

1. They currently fly a 777-300 to sfo which carries a lot more passengers than 787. Flying a 787 to sfo would therefore cut capacity and would lead to customers flying qantas instead.

2. The 772/773 has more business and prem economy seats which get filled easier on the USA routes. While the 787 does also provide the same seats they have higher % of economy seats. (773 has 44 business seats vs 18 seats on 787)
D
That being said the 773 is a newer aircraft (twin engine) and is more fuel efficient when compared to the 747.

I think they have options upto 20 787s so watch this space they would modify a few with different layouts.

[winner69]

Awesome video

Is it trick photography

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11464010

[Beagle]

No sure if you saw our posts above but it would be an irrational decision doing so

1. They currently fly a 777-300 to sfo which carries a lot more passengers than 787. Flying a 787 to sfo would therefore cut capacity and would lead to customers flying qantas instead.

2. The 772/773 has more business and prem economy seats which get filled easier on the USA routes. While the 787 does also provide the same seats they have higher % of economy seats. (773 has 44 business seats vs 18 seats on 787)
D
That being said the 773 is a newer aircraft (twin engine) and is more fuel efficient when compared to the 747.

I think they have options upto 20 787s so watch this space they would modify a few with different layouts.

Hi Brend,

Yeah I did see your earlier post mate and all your points are well made but as least in my mind if there's new competition coming it becomes more a question of really making a point of difference.
While refurbished 777-200 might be enough compared to Qantas' tired old 747 too "stick it" to them, and notwithstanding the lower seat numbers and different configuration of the new Dreamliner, AIR might decide the best way to really put the heat on the opposition is to offer an all new aircraft. Time will tell but at this stage they have twelve confirmed orders for the 787-9 and six more remaining options. It would appear that fancy new military technology they've applied to the tail fin that's exclusive to the 787-9 is really reaping big fuel efficiency advantages. 23% fuel savings a lot better than manufacturers specified 20% :) Maybe we could have a chat with C.L. after the forthcoming ASM and see what he thinks is best.

[tzbang]

Well I couldn't resist getting more at this price.

[Beagle]

Well I couldn't resist getting more at this price.

I had the "hammer by the keyboard" so too speak, all day long hoping some stupid sellers would really get their knickers in a big twist.

[winner69]

Roger, you being a professional guy with a desirable pst code and driving a posh european car looks like you be paying more to fly

http://www.smh.com.au/business/aviation/higher-airfares-on-cards-for-those-who-live-in-wealthier-postcodes-as-airlines-get-personal-20150611-ghl5pm

[IAK]

Malaysia Airlines jet makes emergency landing at Melbourne airportCheapest option may not always be the best option http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11464378

[Zaphod]

Malaysia Airlines jet makes emergency landing at Melbourne airportCheapest option may not always be the best option http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11464378

IMO, Malaysia airlines will be the focus of the media attention for quite some time, some would say rather unduly. There's no evidence that cost cutting caused this incident nor MH370 or especially MH17. AirNZ has also had its fair share of emergency landings.

[Zaphod]

Roger, you being a professional guy with a desirable pst code and driving a posh european car looks like you be paying more to fly

http://www.smh.com.au/business/aviation/higher-airfares-on-cards-for-those-who-live-in-wealthier-postcodes-as-airlines-get-personal-20150611-ghl5pm

Given how freely we give away our personal data to the likes of Google, Facebook, Amazon etc. it was inevitable that this pool of data would be leveraged to determine what price customers can be charged for a product or service, however there are downside risks to the business if customers discover that other customers are changed less for the same product or service. Some high profile businesses such as Amazon already use this technique rather successfully. Even Google’s search engine is tailored to return personalised search results, which makes conducting objective research much more difficult.

What Qantas have discussed in the article about using the data to personalise their service with pricing appropriately adjusted, to me, is far more palatable.

[Hoop]

Google please note
Hoop's New Address

Mr Hoop
B.P. 7983
KINSHASA 1
CONGO (DEM. REP.)

damm..Congo don't have postcodes:(

[Beagle]

Roger, you being a professional guy with a desirable pst code and driving a posh european car looks like you be paying more to fly

http://www.smh.com.au/business/aviation/higher-airfares-on-cards-for-those-who-live-in-wealthier-postcodes-as-airlines-get-personal-20150611-ghl5pm

Crikey that's a bit scary isn't it. Maybe they have my postcode wrong ? because I logged into grabaseat today and they have $29 tickets to Wellington, cheap as chips !! At this rate I won't be shifting to Remuera, Epsom or Herne bay anytime soon :)
Parking at Auckland airport for the day costs more than that !!

[Regi]

Wow, someone just traded 426k @$2.65...

[KiwiGekko]

Wow, someone just traded 426k @$2.65...

Looks like Roger finally found his hammer... :D

[vin]

What's the chances of heading to $3 again anytime soon?

Have been chuffed with my regular trips down to Welly & Chch with AIR. Fantastic service.

[tzbang]

The sustained downward pressure at these prices from sellers since $3 has me perplexed.

[winner69]

Job losses usually gives share price a boost

With the final 60 finally to go in engineering that's good

[vin]

The sustained downward pressure at these prices from sellers since $3 has me perplexed.

Definitely didn't see it coming :mellow:

[Beagle]

The sustained downward pressure at these prices from sellers since $3 has me perplexed.

Hi mate, Following up on our brief discussion by PM on this subject I just did some quick research on the comparative SP performance of a few of the regular airlines I follow.

Virgin 1 month ago $0.50, now $0.43, decline 14%
Qantas 1 month ago $3.60, now $3.25, decline 9.7%
American Airlines 1 month ago $49.00, now $40.07, decline 18.3%
Delta Airlines 1 month ago $47.37, now $40.70, decline 14.1%
AIR 1 month ago $3.00, now $2.66, decline 11.4%

Given that oil hasn't really changed all that much in the last month the bigger question is what is happening to worldwide investor perceptions regarding this sector going forward ?

Is there something fundamental here in terms of a shift in outlook for airline demand or is this a natural correction for the sector after some tremendous gains in the last couple of years ?

I suspect its nothing more than a healthy correction.

[sb9]

The sustained downward pressure at these prices from sellers since $3 has me perplexed.

May be the big players want to buy at lower level, so that their return is bigger when price back up again.

[Exodia]

Good win for Air NZ: http://www.stuff.co.nz/travel/news/69458365/air-new-zealands-premium-economy-wins-big-at-2015-world-airline-awards
Should offset the recent decline in SP

[IAK]

Good pay rise for Chris Luxton - $650k in 2013 to $2.5m in 2014. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11466255

[winner69]

Good pay rise for Chris Luxton - $650k in 2013 to $2.5m in 2014. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11466255

Christopher was not CEO all of the previous (2013) so not true in his case.

But articles do highlight the outrageous situation that has developed. Even if tied to global rates tons large extent they will all get their comeuppance one day.

[vin]

Good win for Air NZ: http://www.stuff.co.nz/travel/news/69458365/air-new-zealands-premium-economy-wins-big-at-2015-world-airline-awards
Should offset the recent decline in SP

Thought this would be announced

[winner69]

Good win for Air NZ: http://www.stuff.co.nz/travel/news/69458365/air-new-zealands-premium-economy-wins-big-at-2015-world-airline-awards
Should offset the recent decline in SP

Just shows you some execs really do have their heads in the clouds.

Suppose Mr Tod was serious when he said this "These accolades are something that all Air New Zealander's can be very proud of as we continue to innovate and find new ways to enhance the customer journey," Tod said.



Yes mate, the rich and famous those with bosses with big pockets are so proud .....the man in the street probably not proud what you charge for the priveledge

[percy]

No not another moral rave.!!!
AIR are only doing what any business does; look after their profitable customers..As they should.
Go down to your local Fish and Chip shop every night for a week, and I bet they start putting sea salt rather than ordinary salt,on your chips, for no extra charge.!!

[winner69]

No not another moral rave.!!!
AIR are only doing what any business does; look after their profitable customers..As they should.
Go down to your local Fish and Chip shop every night for a week, and I bet they start putting sea salt rather than ordinary salt,on your chips, for no extra charge.!!

And he a real bastard as well .....he charges heaps more for oysters and chips than he does for fish and chips.

[Beagle]

Don't want to get in between this gentleman's disagreement between you two other than to perhaps highlight the fact that the Govt on behalf of all taxpayers owns just over 50% of AIR shares. Perhaps that's what the AIR exec was referring too in terms of all New Zealanders can be proud ?

[Arbroath]

Chaps - I think you'll find the reference "all Air New Zealanders" is to their staff. But as mentioned above we all own it indirectly via the Crown and Kiwisaver etc.



Don't want to get in between this gentleman's disagreement between you two other than to perhaps highlight the fact that the Govt on behalf of all taxpayers owns just over 50% of AIR shares. Perhaps that's what the AIR exec was referring too in terms of all New Zealanders can be proud ?

[Jaa]

No not another moral rave.!!!
AIR are only doing what any business does; look after their profitable customers..As they should.
Go down to your local Fish and Chip shop every night for a week, and I bet they start putting sea salt rather than ordinary salt,on your chips, for no extra charge.!!

Ordinary salt is sea salt as it's cheap as chips....

Just like Air NZ!

[biker]

Jetstar is about to make a significant announcement on the expansion of its domestic operations in New Zealand and this could include services to cities off the main trunk.

I don't think this is going to help the AIR share price.

[Zaphod]

This was expected. The rumours about Jetstar entering the domestic market have been swirling around for quite some time.

AA may revive a service to AKL, but I am not sure how committed the carrier is to the NZ market, and AirNZ will compete very fiercely.

In the short term (IMO) these events are not good for the AirNZ SP, however the longer term still looks postivie.

[couta1]

Had a small top up order in at $2.64 but looks like I might get some under $2.60 by the end of today:cool: PS-Hopefully Jetstar reinstate their WLG to QTN flights as getting to the southern skifields was much cheaper when there was competition on the route.

[Biscuit]

Had a small top up order in at $2.64 but looks like I might get some under $2.60 by the end of today:cool: PS-Hopefully Jetstar reinstate their WLG to QTN flights as getting to the southern skifields was much cheaper when there was competition on the route.

They are going to open well below $2.60

[vin]

yeah maybe try $2.40 :/

[couta1]

They are going to open well below $2.60
Got some on open at $2.45, should have reduced price further but all good, what a great buying opportunity for those not already committed, be greedy when others are fearful.

[Xerof]

$2.25 should provide good support.

[neyney2010]

Got some on open at $2.45, should have reduced price further but all good, what a great buying opportunity for those not already committed, be greedy when others are fearful.

very greedy :t_up:

[Bjauck]

very greedy :t_up:
But be prepared for turbulence, scalding coffee in your lap, rapid descent and deployment of oxygen masks!

Just how many excess Aussie turbo props do Jetstar have? How long would they be prepared to undercut Air NZ on regional routes? Will Jetstar develop a grateful loyal customer base? Will Air NZ reinstate (at a loss) some of the routes it gave up? Lots of questions.

[brend]

Ouch...no wonder I woke up at 4am this morning.

Good questions bjauck hopefully we know soon

[Xerof]

It'll be interesting to see where and with what.....they have (had) an in-house policy wrt AIR of 'don't poke the bear' but perhaps that time has arrived?

[sb9]

Interesting to see how the day plays out...is it really going that bad or just few jitters in the short term. Keep in mind though the FY results won't be impacted that much as we're almost at the end June month. I see good bargain at the current low price levels....

[biker]

Interesting to see how the day plays out...is it really going that bad or just few jitters in the short term. Keep in mind though the FY results won't be impacted that much as we're almost at the end June month. I see good bargain at the current low price levels....

Keep in mind also that the market always looks ahead, but I agree re price levels. Starting to get a bit more realistic.

[Regi]

Interesting to see how the day plays out...is it really going that bad or just few jitters in the short term. Keep in mind though the FY results won't be impacted that much as we're almost at the end June month. I see good bargain at the current low price levels....

A lot thought the $2.60's offered a bargain. I've unfortunately topped up a little too much in that range and in the short term it hasn't paid off, I'm just going to sit on what I have and wait now.

P.S stfu Jetstar :t_down:

[tzbang]

Unfortunate timing on a weakened SP, could be seen in hindsight as a bargain come August results though.

Wonder if Roger has his hammer going

[sb9]

Unfortunate timing on a weakened SP, could be seen in hindsight as a bargain come August results though.

Wonder if Roger has his hammer going

Yeah, wonder Roger is this morning...surprised not to see a post from him....Paging Roger, come in....

[neyney2010]

Yeah, wonder Roger is this morning...surprised not to see a post from him....Paging Roger, come in....

Rog's backed his truck up this morning and now over his 15% threshold. He's gone to get some sleeping pills now.

[couta1]

A lot thought the $2.60's offered a bargain. I've unfortunately topped up a little too much in that range and in the short term it hasn't paid off, I'm just going to sit on what I have and wait now.

P.S stfu Jetstar :t_down:
My average on my latest holding is $2.68 and thats fine, unknown news can affect any share any time thats the nature of the beast we court but patience will win the day on this one IMHO.

[percy]

A good example of Yin and Yan.!!
The share price goes down ,the yield goes up.!!
9.32% at present.

[Marilyn Munroe]

To make an educated guess where Queer and Nasty Airlines(cheap sheep shaggers division) will run thier dashers, ask yourselfwhere do they currently fly to and where are the gaps in this matrix?

CHC --> DUD
CHC --> ZQN
WLG --> DUD
WLG --> ZQN

They are a viable replacement for A320's on the WLG --> CHC sector freeing up this metal for other main trunk routes.

Boop boop de do
Marilyn

[Joshuatree]

Jetstar is about to make a significant announcement on the expansion of its domestic operations in New Zealand and this could include services to cities off the main trunk.

I don't think this is going to help the AIR share price.

Thanks biker ; have you got a link. It would be so fab if cities off the main trunk got big reduced fares.

Cancel that.Bill English just been interviewed on CNBC now and the Qantas/Jetstar competition was discussed.

[Regi]

Thanks biker ; have you got a link. It would be so fab if cities off the main trunk got big reduced fares.

Cancel that.Bill English just been interviewed on CNBC now and the Qantas/Jetstar competition was discussed.

http://www.stuff.co.nz/business/industries/69491698/jetstar-set-to-announce-nz-domestic-expansion

I see John Key is making the announcement... Still a little upset he didn't get invited to AIR's club? :p

[Beagle]

Rog's backed his truck up this morning and now over his 15% threshold. He's gone to get some sleeping pills now.

No...very close though. I went to the doctor's this morning in blissful ignorance of this pending announcement to get a new 3 month supply of blood pressure pills....looks like I should have asked for a higher dose subscription...

That said, I hate Jetstar, (I euphemistically refer to them as Jethole) their existing planes are old and crappy, their seat pitch is the smallest in the entire aviation industry at only 29 inches, their staff are grumpy...just a horrible tin can in the sky. Some people will choose to fly on their new regional routes because of the cheaper prices and it'll probably grow the market overall. Virgin are flying on Qan's routes...lets settle a little here folks.

I guess in the absence of any knowledge about exactly what's planned we have hit a pretty sizeable air pocket. Fortune favours the brave !!

[Biscuit]

A good example of Yin and Yan.!!
The share price goes down ,the yield goes up.!!
9.32% at present.

Well, the yield only goes up IF you buy at that price and IF the profit holds up under increased competition. On the other hand, you never lose taking a profit. Extra competition from a cut price airline expanding its capacity - I don't see that as a road to a golden era for shareholders (of which I am still one, though less so).

[Joshuatree]

Unfort timing for Craigs latest research on AIR , out this morn. Buy @$2.65 target $3.30 Forecast net yield 2015 5.7 %...2016 6%

[Biscuit]

That said, I hate Jetstar, (I euphemistically refer to them as Jethole) their existing planes are old and crappy, their seat pitch is the smallest in the entire aviation industry at only 29 inches, their staff are grumpy...just a horrible tin can in the sky. Some people will choose to fly on their new regional routes because of the cheaper prices and it'll probably grow the market overall.

I also hate Jetstar and will not ever fly with them again regardless of price after an unpleasant flight to Melbourne a few years ago. I don't forgive and forget even if it may be a little irrational. Will be interesting to see the announcement at 2pm, what exactly they are proposing.

[belted galloway]

To the battle stations everyone, a pricing war is to begin.

Expect Air NZ to defend their position fiercely.

Will be interesting to see which routes are announced.

Was only a matter of time, especially with the poaching of Grant Kerr.

Eagerly awaiting 2pm.

[Nasi Goreng]

I've been looking at Airline stocks recently, both Qantas and Air NZ looked to me like a pull back and I was tempted to buy put didn't.

Qantas couldn't seem to break out of the low $3.20's though and has today fallen to $3.14. The AIR chart now looks like a no flying zone.

It may very well just be that both Qantas and Air NZ have had their run and with both economies under pressure, I would imagine corporates are throttling back on non critical travel which is not going to help any airlines. Is this part of the natural cycle of an airline? and are we about to enter a new phase?

[Marilyn Munroe]

Another possibility is the transfer of A320's from Jetstars struggling Asian ventures to Aoteroa.

I reckon the Queer and Nasty family not having any flights btween CHC and BNE was an oppourtunity going begging.

Boop boop de do
Marilyn

[sb9]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11467277

Here it is....

[ddrone]

http://www.newstalkzb.co.nz/news/national/jetstar-eyes-up-more-regional-routes/

5x Q300's. AirNZ has 23 plus the rest of the domestic turbo prop fleet (54 in total). Doesn't look like a shake up to me.

[biker]

http://www.newstalkzb.co.nz/news/national/jetstar-eyes-up-more-regional-routes/

5x Q300's. AirNZ has 23 plus the rest of the domestic turbo prop fleet (54 in total). Doesn't look like a shake up to me.

Yes, Possibly a bit of a market over reaction. Happy to pick some up this morning South of $2.40 but not expecting much of a move up in the short term and further downside possible as the media beat it to death.

[Beagle]

A few really Old Q300's with sardine like 29 inch pitch seats and no service...not even a smile...yep, I'm shaking in my boots. Reality is this will simply grow the market as cheap arse punters who would not have travelled or taken their car choose to fly instead.

[Joshuatree]

I bought my first AIR shares today. A bit of a base formed re $2.40. Since the announcement @ 2pm buy vol has increased and s.p now $2.43 and rising

[tzbang]

Damn I wish I had spare capital and hasn't topped up at 2.60 now

[Regi]

I bought my first AIR shares today. A bit of a base formed re $2.40. Since the announcement @ 2pm buy vol has increased and s.p now $2.43 and rising

Increased substantially. Volume has been almost $4mil in half an hour with some big 150k and 240k trades taking place. Welcome to AIR JT :)

[Beagle]

I bought my first AIR shares today. A bit of a base formed re $2.40. Since the announcement @ 2pm buy vol has increased and s.p now $2.43 and rising

Yep, I got a fill for my increased holding at $2.41 immediately after the press release. At $2.60 these were already an incredible bargain trading on only 6.5 times consensus FY16 earnings of 40 cps.
Stock trades cum its final divvy in just over a couple of months. AIR are now really compelling value and this announcement by Jethole will simply get more people flying and grow the market overall.
Welcome on board, please fasten your seatbelt firmly and ensure you precious belongings are stored under the seat in front of you or in the overhead locker :)

[couta1]

A few really Old Q300's with sardine like 29 inch pitch seats and no service...not even a smile...yep, I'm shaking in my boots. Reality is this will simply grow the market as cheap arse punters who would not have travelled or taken their car choose to fly instead.
Looks like the market agrees with you mate.

[Beagle]

Looks like the market agrees with you mate.

Yep, one of my mates by e.mail tried talking me out of topping up but the hungry beagle in me that lurks just below the surface couldn't resist a feed from such a screaming bargain.
Fortune favours the brave !!

[sb9]

Bit late on the buy button, never mind got mine filled at $2.45....

[Regi]

Yep, I got a fill for my increased holding at $2.41 immediately after the press release.

Roger is in! Expect an announcement followed by a rise in the SP back to $3 by the end of the week as a result.

[couta1]

Bit late on the buy button, never mind got mine filled at $2.45....
Ironic I was too early on the buy button first up this morning and you were too late but we both paid $2.45:cool:

[vin]

Roger is in! Expect an announcement followed by a rise in the SP back to $3 by the end of the week as a result.

If this happens I will be rejoicing like an afro american church choir.

[Beagle]

If this happens I will be rejoicing like an afro american church choir.

:lol: :lol: :lol: :t_up::t_up::t_up:

[Poet]

:lol: :lol: :lol: :up:

I just had to top up as well - even though that leaves me way past a sensible proportion of investments.

Seems that Jetstar has been attempting to disrupt AIR since 2009 - hasn't hurt AIR shareprice so far, quite the opposite in fact. Why would this be any different? As others say, it should just increase the overall number of travellers

[neyney2010]

Yep, one of my mates by e.mail tried talking me out of topping up but the hungry beagle in me that lurks just below the surface couldn't resist a feed from such a screaming bargain.
Fortune favours the brave !!

I'm was in at $2.39 this morning.
Not brave but love reckless buying. up to 13% now....

[couta1]

This blip will be forgotten getting closer to Air NZ next big profit announcement and Jetstar will commence flying 5 sardine cans to yet to be confirmed final destinations, Big Deal, meantime the NZ Herald anti Air NZ dept will be cranking into overdrive by dragging up any article they can(Mainly historic like one they published today on a wayward seabird) coupled with a good dose of typical sensationalism so they have more time to buy up cheap shares:t_down:

[Xerof]

There's some very irrational hatred on this thread (how unusual, some would say, about most threads)

Jetstar has gained a material foothold in the domestic market, whether you like them or not. I don't use them that often, but when I have, I have enjoyed arriving at my destination on time, usually early. I know they got off to a terrible start, but they are MUCH better now, than then. AIR, in my infrequent flying experience lately, has usually been late. I have also flown Trans-Tasman recently on each airline, and found AIR very cramped, with all the fancy equipment jammed in my face, and absolutely no chance of getting out of the seat. On JQ, I could walk past the passenger in the way, no problem. Perhaps I had a slightly better seat than most? I don't know, but I did not pay more for it.

Discl: I have a pilot in the family, yes, JQ captain

Anywoo - I am basically elastic when it comes to airline choice - you should try that, you might like it.

Jetstar has helped transform our market, to the benefit of the flying public, and also to the benefit of AIR. They have been forced to get their act together, ramp up capacity, and lower prices. Airlines are about getting bums on seats, and having planes in the air more often than sitting at the gate. (nice theory, hard to do in NZ)


AIR needs a huge kick in the guts on these regional routes, and is about to get it. GOOD, we the public will benefit massively from cheaper regional fares, AIR will eventually benefit from more arses on seats, and it's a great fillip for regional tourism. I just hope AIR don't get silly with price wars, for shareholders' sakes, as JQ is now a worthy opponent, and have shown there is room for more capacity. We don't need to get silly and petulant here do we.........

So, what to do.....the AIR price will need to close above the 200EMA today, and close this mornings price gap at some point soon, otherwise she's off to the downside. The reef-fish are swimming right now, can see nothing wrong, and are underestimating a now established and proven competitor

I personally like $2.25 as a buy in level, (old resistance, now support) but then I'm just completely batty

[macduffy]

Jetstar will commence flying 5 sardine cans

That's strange. I thought I read that Jetstar will use Bombardier Q300's - the same aircraft type as AIR uses on most regional routes?

[couta1]

That's strange. I thought I read that Jetstar will use Bombardier Q300's - the same aircraft type as AIR uses on most regional routes?
Was a bit of sarcasm, whoops.

[Beagle]

Xerof, Last time I flew Jethole I couldn't walk afterwards because of the pain in my knee joints after having my knees rammed against the seats in front so hard...that's the real world for you mate for anyone 6ft flying in their old crappy A320's with coffin like 29 inch seat pitch. That and their Chinese pilot had to do a go around because he couldn't land at first attempt at Chch 's long international airstrip on a fine perfectly still day. You pay peanuts and you get monkeys. He blamed ATC but I reckon he simply ****ed it up.

You couldn't pay me to fly on one of their planes and land at Queenstown on a cloudy day :eek2:

Did you really expect to see love for Jetcrap on this thread ?

[Beagle]

Got to love the airline industry. Nothing ever changes. Just when they are all making money from low fuel prices they go and throw it all away on a capacity war. At least they are predictable. Buckle your seat belts people, its going to be a bumpy ride :p

You can't be a pussy all your life, I reckon you should man up :D and bag a real bargain.

[Jaa]

Plane Talking
‘Propstar’ confirmed: Five Jetstar Q300s for NZ regional flights (http://blogs.crikey.com.au/planetalking/2015/06/18/propstar-confirmed-five-jetstar-q300s-for-nz-regional-flights/)

Australian Aviation
Jetstar plans shakeup of regional NZ aviation (http://australianaviation.com.au/2015/06/jetstar-plans-shakeup-of-nz-regional-aviation/)

[shonen knife]

Xerof, Last time I flew Jethole I couldn't walk afterwards because of the pain in my knee joints after having my knees rammed against the seats in front so hard...that's the real world for you mate for anyone 6ft flying in their old crappy A320's with coffin like 29 inch seat pitch. That and their Chinese pilot had to do a go around because he couldn't land at first attempt at Chch 's long international airstrip on a fine perfectly still day. You pay peanuts and you get monkeys. He blamed ATC but I reckon he simply ****ed it up.

You couldn't pay me to fly on one of their planes and land at Queenstown on a cloudy day :eek2:

Did you really expect to see love for Jetcrap on this thread ?

I recently flew CHC->AKL on Jetstar and then back on Air NZ. I'm 6' 1" and there was no difference in comfort. Flown with Jetstar quite a lot, and probably prefer them on shorter flights as they leave on time and usually arrive early.

Also never had a problem with Chinese pilots.

Have always found Jetstar's staff to be perfectly friendly as well.

[Beagle]

Plane Talking
‘Propstar’ confirmed: Five Jetstar Q300s for NZ regional flights (http://blogs.crikey.com.au/planetalking/2015/06/18/propstar-confirmed-five-jetstar-q300s-for-nz-regional-flights/)

Australian Aviation
Jetstar plans shakeup of regional NZ aviation (http://australianaviation.com.au/2015/06/jetstar-plans-shakeup-of-nz-regional-aviation/)

Translation is clear. They couldn't sell these crappy old run down planes so seeing as they have no residual value lets hire some cheap Chinese pilots and cabin crew desperate to start in the industry on really low wages and run them on AIR's domestic route with zero service and miniscule seats...those Kiwi's are so dumb they'll never notice the difference in standard....or will they ?

[Beagle]

I recently flew CHC->AKL on Jetstar and then back on Air NZ. I'm 6' 1" and there was no difference in comfort. Flown with Jetstar quite a lot, and probably prefer them on shorter flights as they leave on time and usually arrive early.

Also never had a problem with Chinese pilots.

Have always found Jetstar's staff to be perfectly friendly as well.

I found the exact opposite. Maybe you had a better seat on Jetstar, mine was close to the back.

[sb9]

I think in a months time all this will take backseat when results are due to be out and real valuations come out. In the meantime, it'll be bit bumpy just like the unpredictable weather, so buckle up and stay tight....

[winner69]

Jeez, price down 21% from a recent high. That's a crash, and I didn't even buy.

Good news though, getting back to 302 gives a 26% gain .....plus a divie? .....good eh

[Hoop]

I guess the textbook will come out again..flick to Market Defence Strategies against new Competitors and up pops the successfully used strategy...Create a low cost airline company(s) using the existing equipment (synergy advantage) to aggressively compete head on and underprice with the intention to drive out the invaders .....Once the invaders are gone the usually lost making airline is mothballed or ceases to exist and the business reverts to its high margin parent operations

The big threat last time was Kiwi Airlines and in 1995 Air NZ created the low cost airline company called Freedom Air and eventually bankrupted the opposition.. FreedomAir creased to exist in 2008 and custom returned to the high margin Air NZ parent

If this defense strategy is rolled out again, then investors should expect the AirNZ parent to lose some of its domestic & transtasman market share to its created low margin company(s) group

[couta1]

I found the exact opposite. Maybe you had a better seat on Jetstar, mine was close to the back.
I've always found Jetstar seats to be very cramped for leg room and I'm only average height, a couple of years ago my wife's flight was seriously delayed because the pilot didn't turn up so they sat there looking at an empty plane for 3 hours until another pilot turned up, the one credit I've give them is they fly their planes pedal to the metal with a sizzling 40 mins from Wlg to Ak albeit with a tail wind.

[Beagle]

Fact 1: Jethole's domestic A320's are 29 inch pitch seats which is internationally recognised as the tightest in the world
http://www.seatguru.com/airlines/Jetstar/Jetstar_Airbus_A320.php

Fact 2 Air New Zealand's A320's are 30 -33 inch pitch seats
http://www.seatguru.com/airlines/Air_New_Zealand/Air_New_Zealand_Airbus_A320D.php

Even in their tightest configuration at the back of an AIR A320 I could still walk off the flight as my knees had not been in excruciating pain like on the flight down on Jethole.
A minimum of 1 inch difference in pitch makes all the difference in the world if your pelvis to knee measurement is 30 inches, ie. its not all about how tall you are its about your pelvis to kneecap measurement that really counts.

Jethole can keep their crappy old rattling sardine cans for the poor unfortunates who feel they are compelled to buy the cheapest seat regardless of service level's or comfort. Even my Mum who is 5ft 6 inches reckons Jethole seats are very small. In my experience the thrill of a bargain is forgotten the moment you step on board and the bitter taste of poor quality lingers long after the flight as you struggle to walk from the pain in your knees.

[winner69]

Current low fuel prices and interest rates are certainly boosting airline profits at the moment.

Over the years though even though airlines has always been a growth industry it generally shows a chronic lack of profitability. The problem has always been that capacity has always grown at rates that are unrelated to the underlying growth in demand.

These days there does seem to be more discipline in that respect, hence the current increase in load factors ......an additional boost to profits

When cyclical factors such as fuel prices and interest rates turn against airlines that discipline needs to remain.

Only posted this last week. Wrong again

[winner69]

Xerof: So, what to do.....the AIR price will need to close above the 200EMA today, and close this mornings price gap at some point soon, otherwise she's off to the downside. The reef-fish are swimming right now, can see nothing wrong, and are underestimating a now established and proven competitor

I personally like $2.25 as a buy in level, (old resistance, now support) but then I'm just completely batty

Hey Zerof. Love these gaps .....up and down.

The HNZ No More Gaps s taking a heck of a time to work out. What the theory/experience with filling gaps like the AIR one. Things 'gaping down' always seems worse than gaping up.

And it did close below the 200MA line as well. Suppose tomorrow a defining day as to where price is going over the medium term.

Intriguing and a bit spooky

PS just noticed that 22 you mentioned is about a FIB retracement level. I love Fibs

[Xerof]

Tomorrow needs to be a "whoop whoop pull up" day

haven't got any charts with fibs on it, but $2.25 looks 61.8%. After a BAT reversal (which came in very nicely at my $3.00 prediction, right on cue), the initial target is 61.8%. After that, you won't want to know

[winner69]

Tomorrow needs to be a "whoop whoop pull up" day

haven't got any charts with fibs on it, but $2.25 looks 61.8%. After a BAT reversal (which came in very nicely at my $3.00 prediction, right on cue), the initial target is 61.8%. After that, you won't want to know

That's right ....many fib support levels below 225

The 50% retracement is about 194

That bat of yours, was it one of these enormous walking bats
http://www.radionz.co.nz/news/national/276618/fossil-find-reveals-new-'walking'-bat

[couta1]

That's right ....many fib support levels below 225

The 50% retracement is about 194
Time to take up knitting winner your dreams are leading you toward the dark side.

[winner69]

Time to take up knitting winner your dreams are leading you toward the dark side.

Next diagnosis will be I am going batty

[Hoop]

You can't be a pussy all your life, I reckon you should man up :D and bag a real bargain.

http://i458.photobucket.com/albums/qq306/Hoop_1/Catwoman_2.png (http://s458.photobucket.com/user/Hoop_1/media/Catwoman_2.png.html)

[Xerof]

Next diagnosis will be I am going battyyou are...I use that $1.75 major swing low to the top as my 100% fib, so we hit 50% today at $2.37. Next is $2.23, being 61.8%

using my trusty HP12C......

droll hoop, very droll :t_up:

[winner69]

you are...I use that $1.75 major swing low to the top as my 100% fib, so we hit 50% today at $2.37. Next is $2.23, being 61.8%

using my trusty HP12C......

droll hoop, very droll :t_up:

I went back to the 85 cent mark as the start

Using my Commodore 64

[babymonster]

Bought early this morning at 2.36. Still feeling a bit downward pressure. It may test the support tomorrow. Hopefully US and EU might have some good news/data

[Sideshow Bob]

From my take, about 10% was wiped off the market capitalisation, on a announcement that Jetstar going to fly more routes domestically with limited real details (plus the background of higher oil and the lower dollar).

The equivalent of about $290m.

Seems silly. :confused:

[sb9]

http://www.scoop.co.nz/stories/BU1506/S00700/air-nz-ready-for-a-fight-with-jetstar-on-regional-routes.htm

Here we go, looks like Air Nz ready to take on the challenge, game on!!!

[Robomo]

http://www.scoop.co.nz/stories/BU1506/S00700/air-nz-ready-for-a-fight-with-jetstar-on-regional-routes.htm

Here we go, looks like Air Nz ready to take on the challenge, game on!!!

Jetstar say they will take on 4 regional destinations. My guess is Hamilton, Palmerston North, Nelson and Napier; these are the four busiest regional airports. As well, there may possibly be more flights Queenstown to Christchurch and Wellington depending on capacity. Jetstar will be using Q300's, which are not as efficient as the ATR's that AirNZ uses for many of the flights from these 4 centres. Frequency will be far less than AirNZ and there will not be the continuity onto many of the International destinations from Auckland that AirNZ fly to. So on that basis it is hard to see Jetstar making any profit if they try to match AirNZ on price.

My guess is that these four regional routes (will they only be to and from Auckland?) contribute less than half of AirNZ's profit on all regional routes, which in turn is far less than the domestic main trunk routes. Overall it's only going to make a small dent in numbers changing from AirNZ to Jetstar.

The profitable passengers in all these centres come from the business community, frequent flyers and those continuing on to overseas on AirNZ. It's hard to see many of them giving up their FF cards and lounge access and frequency for Jetstar, which won't offer these perks and indeed might only be flying for a year or two.

Qantas have only just emerged from a bruising price war with Virgin in Australia, which did not benefit either airline. Virgin survived in part from the huge support provided by AirNZ, Etihad and Singapore Airlines. A big market for all those four airlines so worth fighting for. What is Qantas got to gain from flying a handful of 'bargain basement' passengers from a few tiny towns in NZ?

Some years ago Qantas pulled the pin on their codeshare with Origin Pacific, which promptly went out of business. Qantas also abandoned it's Christchurch - Rotorua flights years ago as they were unprofitable. How could they succeed now, given past failures?

Setup costs for Jetstar will be substantial and given the price war that is bound to occur it's going to take years for Jetstar to recover setup costs, let alone make any profit.

Check the hyperbole in 2004 when Pacific Blue and Jetstar announced their respective plans for New Zealand http://www.theage.com.au/articles/2004/01/22/1074732539983.html

So, am I worried about Jetstar introducing a few clapped out Q300's into four regional airports to carry a handful of budget passengers at $49 a seat? Not on your life. AirNZ might lose $10 million of profit in 2015/16 with price matching but that will only shave about 5% off Net Profit. My bet is that Jetstar Regional will be gone within 3 years, having cost Australian Shareholders a heap of money.

Yes, I did increase my AirNZ stake by 10% with this latest fall!

[Beagle]

No airline stocks for me I'm afraid. I'm with Warren Buffet on this one - investors in the aviation industry would have been better off if someone shot the Wright brothers :-)

Lucky for you though Roger, AIR is not one of the stocks I can short :t_down:

LOL really ? According to Craigs AIR investors have enjoyed compound annual returns of 12% per annum for the last decade. Very few other stocks can match that with notable exceptions of other quality companies like FPH and RYM.

Pretty simple really, the airline business is volatile and has arguably more business risk that some other sectors. AIR trades on a forward PE of 6 that's one third of the market average !! of circa 18 times FY16 earnings.
Its up to investors to decide if a well managed business like AIR should be trading at such an incredibly deep discount to the market average and its international peers.
Some see risk, other see a brilliant opportunity to capitalise on negative sentiment and such negative sentiment may have an almost immaterial effect on real earnings going forward.

Chris Luxon and his team will give Jethole hell and burn Jetstar's profit and loss statement deep into the red in the process. AIR is in a VASTLY stronger financial position than Qantas.

[sb9]

Good post Robomo...exactly what my thoughts were too, don't think its going to hurt their earnings that badly as the market reacted y'day.

[Beagle]

Jetstar say they will take on 4 regional destinations. My guess is Hamilton, Palmerston North, Nelson and Napier; these are the four busiest regional airports. As well, there may possibly be more flights Queenstown to Christchurch and Wellington depending on capacity. Jetstar will be using Q300's, which are not as efficient as the ATR's that AirNZ uses for many of the flights from these 4 centres. Frequency will be far less than AirNZ and there will not be the continuity onto many of the International destinations from Auckland that AirNZ fly to. So on that basis it is hard to see Jetstar making any profit if they try to match AirNZ on price.

My guess is that these four regional routes (will they only be to and from Auckland?) contribute less than half of AirNZ's profit on all regional routes, which in turn is far less than the domestic main trunk routes. Overall it's only going to make a small dent in numbers changing from AirNZ to Jetstar.

The profitable passengers in all these centres come from the business community, frequent flyers and those continuing on to overseas on AirNZ. It's hard to see many of them giving up their FF cards and lounge access and frequency for Jetstar, which won't offer these perks and indeed might only be flying for a year or two.

Qantas have only just emerged from a bruising price war with Virgin in Australia, which did not benefit either airline. Virgin survived in part from the huge support provided by AirNZ, Etihad and Singapore Airlines. A big market for all those four airlines so worth fighting for. What is Qantas got to gain from flying a handful of 'bargain basement' passengers from a few tiny towns in NZ?

Some years ago Qantas pulled the pin on their codeshare with Origin Pacific, which promptly went out of business. Qantas also abandoned it's Christchurch - Rotorua flights years ago as they were unprofitable. How could they succeed now, given past failures?

Setup costs for Jetstar will be substantial and given the price war that is bound to occur it's going to take years for Jetstar to recover setup costs, let alone make any profit.

Check the hyperbole in 2004 when Pacific Blue and Jetstar announced their respective plans for New Zealand http://www.theage.com.au/articles/2004/01/22/1074732539983.html

So, am I worried about Jetstar introducing a few clapped out Q300's into four regional airports to carry a handful of budget passengers at $49 a seat? Not on your life. AirNZ might lose $10 million of profit in 2015/16 with price matching but that will only shave about 5% off Net Profit. My bet is that Jetstar Regional will be gone within 3 years, having cost Australian Shareholders a heap of money.

Yes, I did increase my AirNZ stake by 10% with this latest fall!

Superb post mate. I take my hat off to you. What you've said sums the situation up perfectly and I also took the opportunity to go shopping for a top quality blue chip stock at an amazing bargain price yesterday.

[winner69]

Probably Qantas strategy is to use some old surplus planes as a disruptive weapon to hurt one of AIRs uncontested profit engines.

Low cost operation but they know it won't be a gold mine (may not even be profitable) but might distract AIR elsewhere where they could benefit

Just a disruptive tactic in a bigger game, the games big boys play to stroke their egos.

Be all over in a few years time.

[trader_jackson]

You forgot to mention one thing, Jetstar planes probably won't be on time (that is if they turn up at all!), making it even better for air nz...

[Robomo]

You forgot to mention one thing, Jetstar planes probably won't be on time (that is if they turn up at all!), making it even better for air nz...

Pertinent post. The Q300 planes are about 15 years old and have been in storage in Tamworth for some time.

How are they going to be serviced? AirNZ have established facilities for their Q300's all over New Zealand so I'm sure they could provide engineering services for a hefty fee!

[Robomo]

You forgot to mention one thing, Jetstar planes probably won't be on time (that is if they turn up at all!), making it even better for air nz...

Pertinent post. The Q300 planes are about 15 years old and have been in storage in Tamworth for some time.

How are they going to be serviced? AirNZ have established facilities for their Q300's all over New Zealand so I'm sure they could provide engineering services for a hefty fee!

[couta1]

Pertinent post. The Q300 planes are about 15 years old and have been in storage in Tamworth for some time.

How are they going to be serviced? AirNZ have established facilities for their Q300's all over New Zealand so I'm sure they could provide engineering services for a hefty fee!
Apparently they are 10yrs old (Half their life span) and they are going to be serviced via an Aussie arrangement.

[Robomo]

Apparently they are 10yrs old (Half their life span) and they are going to be serviced via an Aussie arrangement.

I'm sure they are older - AirNZ bought the last Q300's to be made in 2005 and Qantas already had theirs. Q have bought more Q400s since 2005 but these won't be used in New Zealand. Anyway, they are still good for a few years yet.

Serviced by an Aussie arrangement? Sounds expensive and if they have to fly them back to Aussie for servicing the fleet size will be reduced by 20% for at least a couple of days at a time.

[couta1]

I'm sure they are older - AirNZ bought the last Q300's to be made in 2005 and Qantas already had theirs. Q have bought more Q400s since 2005 but these won't be used in New Zealand. Anyway, they are still good for a few years yet.

Serviced by an Aussie arrangement? Sounds expensive and if they have to fly them back to Aussie for servicing the fleet size will be reduced by 20% for at least a couple of days at a time.
It was an article in the daily sharetrader update but I deleted it, someone else may still be able to access it?

[tzbang]

Air NZ now sustainably valued, say analysts.

First NZ Capital believes the market’s pricing of Air NZ now more adequately reflects a sustainable mid-cycle return profile, and so has upgraded its rating from underperform to neutral.


The analysts revised their forecasts for 2017 earnings before interest and tax by -16%


Forsyth Barr says yesterday’s share price reaction was over-done, and so it is keeping its outperform rating on the stock.


Forsyth Barr calculates Jetstar will look to increase its current 1.7 million domestic passenger load by about 30%, targeting revenue of about $60 million. This level of revenue represents around 4% of Air NZ’s existing domestic revenue base, or 1% of global revenue.

http://www.nbr.co.nz/article/air-nz-now-sustainably-valued-say-analysts-cs-p-174408

[ddrone]

Forsyth Barr calculates Jetstar will look to increase its current 1.7 million domestic passenger load by about 30%, targeting revenue of about $60 million. This level of revenue represents around 4% of Air NZ’s existing domestic revenue base, or 1% of global revenue.

http://www.nbr.co.nz/article/air-nz-now-sustainably-valued-say-analysts-cs-p-174408

So a 1-2% drop would've been appropriate. That would put the price pre Jetstar at around $2.60.

[sb9]

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11467804

If this is anything to go by.....imagine when they start the domestic services...:scared:

[couta1]

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11467804

If this is anything to go by.....imagine when they start the domestic services...:scared: A wake up call for the general public not to get too enthusiastic about the Jetstar expansion,the last time i took a Jetstar flight it was rescheduled 3 times in the weeks leading up to departure.

[mikeybycrikey]

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11467804

If this is anything to go by.....imagine when they start the domestic services...:scared:

Well, remember this Air NZ fiasco from only May last year: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11248179
Or this Air NZ one from July last year: http://www.stuff.co.nz/travel/travel-troubles/10322766/1000-apology-from-Air-NZ-for-Hawaii-stranding

It seems like there is way too much love for Air NZ going on here at the moment and not nearly enough pragmatic analysis.

There are lots of people who have sworn never to fly Jetstar again, but probably just as many who will never fly Air NZ again because of issues they have encountered. When you've only got a few travel options you fly with whoever offers the best combination of price and product.

Recently I queued an hour for check-in with Air NZ and then flew and a clapped out old plane. I've had many good Air NZ experiences so you take the good with the bad.... but what if that was someone's first Air NZ experience?

This "propstar" announcement will be an interesting shake-up and it'll be interesting to see where the pieces will fall.

Personally, I was hoping to significantly reduce my holding of AIR after their upcoming profit announcement but maybe I left it too long.

It was perhaps a little naive watching Air NZ expanding into other markets without expecting others to expand their own offerings quite this soon. Air NZ has had a pretty golden run, helped out by a lack of any real competition for a long time, except on the Tasman routes.