AIR - Air NZ.

[skid]

A little more respect for, and tolerance of, your fellow posters would be appreciated.

STMOD

Im begining to wonder if it isnt just human nature that there has to be a PEB somewhere--Im sure though that those involved will find it far easier to settle into a gentlemanly discussion with a share going in this direction(I have'nt got a clue what Im worth--I also dont have a clue what AIR WILL be worth--its fun though hearing all the guesses (even if they are all in the same direction):)

[Beagle]

https://www.nzx.com/companies/AIR/announcements/272282

Some more fantastic numbers

Fantastic, absolutely brilliant. Average fleet wide aircraft loadings over 85% is the best for years and seeing as they carry an average of about 2.5 months forward bookings at any one time on average these latest numbers should have showed up any cyclical downturn from the soft patch the economy went through in early-mid winter...but what soft patch for the economy as far as air travel is concerned especially on AIR N.Z. ?

QAN also posted good Sep op stat's today but their fleet wide aircraft load was 81%. When you consider it takes approx. 65-70% loads to break even the extra 4% loading AIR are getting really means in tandem with very low oil and only a modest yield decline AIR are really flying high. No wonder management reiterated their confidence in profit doubling !!

[silverblizzard888]

Using prior results to predict future results from best to worse in the last three years.

Annual report data [annual, interim]
Revenue
2015
4,925,000,000 2,403,000,000 48.8%
2014
4,663,000,000 2,324,000,000 49.8%
2013
4,615,000,000 2,368,000,000 51.3%
*numbers vary from report to report but overall similar
Overall Interim revenue is about similar to next 6 months for FY.

Earnings before tax [annual, interim]
2015
474,000,000 197,000,000 41.5%
2014
358,000,000 198,000,000 55%
2013
181,000,000 141,000,000 77%
Companies manage to do better lately in the second half.
Gone from 1st half doing better to second half doing better.

Forecast earnings before tax
1h 400,000,000
2h + 1h :
Using 2015 as Max : 963,855,422 (after tax 693m)
Using 2014 as Mid : 727,272,727 (after tax 523m)
Using 2013 as Min : 519,480,519 (after tax 374m)
Dividend Policy 45-55%

2016 Dividend Range
Max 55% payout : 34cents = 17cents average payment [15,19]
Mid 50% payout : 23 cents = 12.5cents average payment [10, 13]
Min 45% payout : 15cents = 7.5cents average payment [6, 9]
[ , ] = likely dividend mix
*maybe different and adjusted by special dividend

2016 Valuation per share
Max :$ 5.20
Mid : $3.65
Min : $2.46

Overall I consider current valuation to be quite cheap if they can achieve 400m forecast earnings before profit in 1h 2016 :eek2:

[Biscuit]

Im begining to wonder if it isnt just human nature that there has to be a PEB somewhere--Im sure though that those involved will find it far easier to settle into a gentlemanly discussion with a share going in this direction(I have'nt got a clue what Im worth--I also dont have a clue what AIR WILL be worth--its fun though hearing all the guesses (even if they are all in the same direction):)

Maybe there is truth to that - we need to argue about something. I've always enjoyed Roger's posts and respect his opinions. I shall skulk away to count my millions...

[winner69]

Fantastic, absolutely brilliant. Average fleet wide aircraft loadings over 85% is the best for years and seeing as they carry an average of about 2.5 months forward bookings at any one time on average these latest numbers should have showed up any cyclical downturn from the soft patch the economy went through in early-mid winter...but what soft patch for the economy as far as air travel ........

Mate, more like staggering

New shareholder so look at this stuff now. I'm told the RPK number is the best indicator of where demand and revenues are heading.

In July RPK was up 9.2% and in August up 10.7% and then September up a staggering 15.2%

Jeez there is real momentum building in these numbers - growth getting stronger as each month goes by. And what can you say when compared to FY15 growth of 6% odd, wow comes to mind.

So demand on the rise = huge increase in revenues

And with cost of oil and efficiencies to be built in looks like your $1 billion earnings is a certainty

[Biscuit]

Maybe there is truth to that - we need to argue about something. I've always enjoyed Roger's posts and respect his opinions. I shall skulk away to count my millions...

Also, I have changed my user name, so no offence I hope.

[freddagg]

Mate, more like staggering

New shareholder so look at this stuff now. I'm told the RPK number is the best indicator of where demand and revenues are heading.

In July RPK was up 9.2% and in August up 10.7% and then September up a staggering 15.2%

Jeez there is real momentum building in these numbers - growth getting stronger as each month goes by. And what can you say when compared to FY15 growth of 6% odd, wow comes to mind.

So demand on the rise = huge increase in revenues

And with cost of oil and efficiencies to be built in looks like your $1 billion earnings is a certainty

It is good but not that good.
Over the 3 months ASKs have increased by almost as much as the RPKs. However, considering the increase in ASKs is from new routes
their ability to fill the planes on the new routes is impressive

[winner69]

It is good but not that good.
Over the 3 months ASKs have increased by almost as much as the RPKs. However, considering the increase in ASKs is from new routes
their ability to fill the planes on the new routes is impressive

Exactly fred - it is impressive

Interesting international flights load factor is 87% compared to domestic at 78%

As you say new routes ....and the planes are pretty full ......impressive

[couta1]

Also, I have changed my user name, so no offence I hope.
Excellent you seem far too nice a guy to have a name like your previous one:cool:

[Biscuit]

Excellent you seem far too nice a guy to have a name like your previous one:cool:

Thanks, actually my old dog was called satan and my cat is called biscuit, no other inference meant

[Beagle]

Mate, more like staggering

New shareholder so look at this stuff now. I'm told the RPK number is the best indicator of where demand and revenues are heading.

In July RPK was up 9.2% and in August up 10.7% and then September up a staggering 15.2%

Jeez there is real momentum building in these numbers - growth getting stronger as each month goes by. And what can you say when compared to FY15 growth of 6% odd, wow comes to mind.

So demand on the rise = huge increase in revenues

And with cost of oil and efficiencies to be built in looks like your $1 billion earnings is a certainty

Nicely observed mate and as you know winter is their slowest time of year. With those sort of revenue passenger kilometres to date and two brand new routes starting in mid December which clearly are not reflected in the above sales growth figures, I think consensus analyst sales growth for the year of 6.9% is too light and we will see earnings and sales revisions as the year unfolds. http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/financials/

I see they're putting one of the new Dreamliner's on the Singapore route from mid November. Perfect route for that aircraft. As last year's annual meeting Chris Luxon told us they'd been working really hard on getting their turnaround time down and had achieved a 1 hour turnaround down from initial 2 hour turnarounds with that type. Means it can fly continuously back and forward spending approx 21 of every 24 hours in the air. I'd imagine they're doing the same to other Asian airports with other 787-9's. Its pretty amazing really that they can disembark over 300 passengers, remove their suitcases, remove the freight from the hold, clean the plane, re-provision with fuel for a circa 11 hour flight, food and beverages and load on 300 new passengers, new freight, suitcases and a new crew all in an hour. Makes me exhausted just thinking how they do it.

I think people are going to get quite a surprise by what on track to "exceed" $400m for this half means. Won't surprise me if the first number is a "5" and remember that last year's first half profit was only 43% of full year profit and that with only one new route in the second half, (this year two).

I read the annual meeting commentary of Qantas, thanks for the heads-up. While they were confident of increased profit they're not nearly as bullish as AIR and I am not surprised with comments about mining downturn affecting domestic demand and reducing capacity to match. Other than that sales growth and load factor only modest really. Most of their gains in profitability seem to be coming from their big cost reduction project and cheaper oil.

I think N.Z. analysts are sceptical AIR can fill all the extra international capacity they're putting on but monthly operating stat's to date show they can and probably will. Sales growth at AIR quite markedly superior to Qantas as are their load factors.

[pierre]

I think N.Z. analysts are sceptical AIR can fill all the extra international capacity they're putting on but monthly operating stat's to date show they can and probably will. Sales growth at AIR quite markedly superior to Qantas as are their load factors.

My wife and I have booked AIR to LAX in April next year and return ex IAH mid-May. Not too many seats sold on either flight when we booked but we did get in early on a USA special deal. Will be interesting to see how full the Houston flight is when we actually fly.

I'm Gold Elite so a very regular supporter of our airline and very seldom am I disappointed with the service. I must say though the food they serve on trans-Tasman flights leaves a lot to be desired - haven't flown the Kangaroo line for a while so don't have anything to compare with.

I'm with you though Roger - it's looking very good for AIR this year and for the future - so I topped up my holding again last week.

[winner69]

Fantastic, absolutely brilliant. Average fleet wide aircraft loadings over 85% is the best for years and seeing as they carry an average of about 2.5 months forward bookings at any one time on average these latest numbers should have showed up any cyclical downturn from the soft patch the economy went through in early-mid winter...but what soft patch for the economy as far as air travel is concerned especially on AIR N.Z. ?

QAN also posted good Sep op stat's today but their fleet wide aircraft load was 81%. When you consider it takes approx. 65-70% loads to break even the extra 4% loading AIR are getting really means in tandem with very low oil and only a modest yield decline AIR are really flying high. No wonder management reiterated their confidence in profit doubling !!

I reckon that for every 1% point increase in that load factor revenues increase by $50m

As the planes are flying anyway I reckon most of that $50m falls through to the bottom line.

Good eh - a result of that interactively formulating pandemic growth strategies they undertook

[Joshuatree]

[QUOTE=pierre;

I'm with you though Roger - it's looking very good for AIR this year and for the future - so I topped up my holding again last week.[/QUOTE]

I hope it does for your sake pierre. The last two times folks bought in the $2.80's-90's they lost dough;(check the chart).
The s/p being above the 200DMA this time looks more promising so heres hoping that momentum kicks the s/p upwards and we are all winners of varying %'s .

[Beagle]

Just a "small" difference this time...profit is set to be double last year's record and the company is extremely confident about their future outlook. (Last time it tried to crack $3.00 was late in the FY15 year and people were speculating about circa $500m before tax annual result and Virgin was unprofitable). Now were speculating about $500m for the slightly slower six months of the year inclusive of Virgin's profitable contribution... Hmmmm...don't know about you guys but I reckon that's a pretty "material" change in circumstances :) (recall that last time they said profit would double (2012 to 2013) it nearly tripled, up 173%). To call it this early in the half as on track to exceed $400m excl Virgin's contribution they must be super confident of doing exactly that. You'd almost think the Director's got a bit disappointed with the SP correction down from $3.00 to $2.40 so decided to really tell the market how good things really are for them....I might have read too much into it but by inference I kind of gathered as much from discussing their call with Tony Cater after the annual meeting.

BUT if you believe the brokers this year's gargantuan profit is just a one-off flash in the pan and normal service will resume in FY17. Do you believe your broker or the company, (note the company's confidence in the long term outlook as per annual meeting presentation and latest monthly operating stat's statement),..you be the judge and DYOR.

You're quite right Winner, when they get into the mid 80's % load factor ALL the extra goes on the bottom line except what the extra customers can eat and drink :)

[ace5715]

My wife and I have booked AIR to LAX in April next year and return ex IAH mid-May. Not too many seats sold on either flight when we booked but we did get in early on a USA special deal. Will be interesting to see how full the Houston flight is when we actually fly.
On the 4 trips I have done to Shanghai this year I've seen the same thing with plane occupancy even until the day before I've flown it's looked empty but come the day I've flown it's been full or near as full. I suspect that they aren't allocating seating for people that don't select their own seats or where travel agents don't select seats for their clients. Makes sense as why give seats to people that don't choose them when they could be selected by people wanting to choose their seats.

[Beagle]

Did a little homework today looking at interesting facts in the annual result in terms of annual vs first half last year. Cash flow was extraordinary at $1,100 million for the year but first half was only $378m and second half $722m so with the lower fuel prices in the second half, (lower still now) and higher revenue this gives one something of an insight into likely cash flow this year. Interestingly capex is quite a lot lower in FY17 and FY18 than FY16 so when it comes time to set the final dividend next year they will be looking at a situation of materially less capex going forward.

The other thing is that while $2.6b capex over the next four years looks huge, it needs to be viewed in the context of net capex, (deduct depreciation of approx. $450m a year, total $1.8b, (average of last two years was $419m a year but more going forward with expanding fleet), and retiring aircraft disposal proceeds and the real new fleet capex over and above just standard fleet replacement to defray depreciation through natural ageing of aircraft is probably close to only $6-700m. $2.6b is a great P.C. line to sell to the public though isn't it to keep the greenies happy, (more fuel efficient aircraft) and the public who don't own shares happy, (newer more comfortable aircraft and customer lounges).

Why did I do this homework ? The company is incredibly well positioned to make large fully imputed dividend payments in the years ahead while growing the airline at the same time.
Last year's dividend pay-out ratio was a modest 55%. I think there's scope for this to be raised and I am sure the Govt is keen to help keeps its books in the best possible shape. Maybe a special of 10 cents is old hat now and we might even see something more meaningful next year ?

[russbus]

Quick question, does any anyone see the start up of the jetstar domestic flights, originair and kiwi regional doing anything to damage AIRNZ profits? Has Airnz factored in the potential loss of customers to these operators or is it such a small drop in the bucket its not worth mentioning??

[Kelvin]

Quick question, does any anyone see the start up of the jetstar domestic flights, originair and kiwi regional doing anything to damage AIRNZ profits? Has Airnz factored in the potential loss of customers to these operators or is it such a small drop in the bucket its not worth mentioning??

Originair too small, Kiwi will probably go bust. Jetstar could start having a bigger impact in a year's time - they are adding up to 950 seats per day into the market so far and have capacity to add more by increasing aircraft utilisation. If their first 4 regional destinations go well, I guarantee theyll expand the regional operations

[Regi]

I hope it does for your sake pierre. The last two times folks bought in the $2.80's-90's they lost dough;(check the chart).
The s/p being above the 200DMA this time looks more promising so heres hoping that momentum kicks the s/p upwards and we are all winners of varying %'s .

ehem, thanks for the reminder JT :P Least I'm happier now haha :D

[Beagle]

Originair too small, Kiwi will probably go bust. Jetstar could start having a bigger impact in a year's time - they are adding up to 950 seats per day into the market so far and have capacity to add more by increasing aircraft utilisation. If their first 4 regional destinations go well, I guarantee theyll expand the regional operations

Yes and no. Its quite a different flight experience and appeals to different people in different ways. Don't know anything about the really old Q300's they're bringing across the Tasman but they're competing against a whole bunch of brand new ATR600's AIR are bringing online. In regard to the A320's its quite a different experience. Jetstar crams 180 seats into those old airframes using the airline industry's very tightest 29 inch pitch, (distance between rows of seats). I'm just a normal 6ft and my knees are rammed hard against the seat in front. AIR has newer planes 163 seat configuration generally 32 inch pitch, (3 inches is a lot of extra room) and the snack, beverage and water during a Koru hour flight aren't too bad for a short domestic flight.

[brend]

I see they're putting one of the new Dreamliner's on the Singapore route from mid November. Perfect route for that aircraft. As last year's annual meeting Chris Luxon told us they'd been working really hard on getting their turnaround time down and had achieved a 1 hour turnaround down from initial 2 hour turnarounds with that type. Means it can fly continuously back and forward spending approx 21 of every 24 hours in the air. I'd imagine they're doing the same to other Asian airports with other 787-9's. Its pretty amazing really that they can disembark over 300 passengers, remove their suitcases, remove the freight from the hold, clean the plane, re-provision with fuel for a circa 11 hour flight, food and beverages and load on 300 new passengers, new freight, suitcases and a new crew all in an hour. Makes me exhausted just thinking how they do it.


**** that's amazing - doesn't give much allowance if something goes wrong.

Other Asian airports

Hong Kong - 777 sits parked up for 12 hours
Shanghai - 789 - 8 hours except wed & sun where its parked for 14 hours.
Japan - quick turn around by the looks (1-2) hours

[Joshuatree]

ehem, thanks for the reminder JT :P Least I'm happier now haha :D

Just means your average entry is way higher than it could have been so your risk/reward will be higher and returns will be lower than others. Important not to get carried away on "euphoria" on the threads and be wary of ramping ; you may find yourself buying shares spruikers are selling. All about managing your margin of safety. Don't trust me or anyone else.Things are looking good atm , heres hoping trend continues until the bend at the end:).

[Biscuit]

Just means your average entry is way higher than it could have been so your risk/reward and returns will be lower than others. Important not to get carried away on "euphoria" on the threads and be wary of ramping ; you may find yourself buying shares sparkers are selling. All about managing your margin of safety. Don't trust me or anyone else.Things are looking good atm , heres hoping trend continues until the bend at the end:).

I guess the things to watch out for are signs that the competition is hotting up, increased fuel prices, general economic down turn or any kind of spectacular failure ...

[winner69]

Kiwi Air cutting back flights already

Nobody wants to fly Dunedin / Queenstown

[Snow Leopard]

I guess the things to watch out for are signs that the competition is hotting up, increased fuel prices, general economic down turn or any kind of spectacular failure ...

Increased competition and a higher fuel prices are locked into analyst evaluations which is why the consensus is around the $3 mark for AIR. Also there is a little "expect the unexpected" involved as well.

The current price of oil is widely regarded as unsustainable, but of course like share prices themselves whether it will be $50, $100 or $150 a barrel in the near, medium and long term is a little uncertain.

BTW: Have you noticed that AIR seem to have reduced their fuel hedging over the last year?

Best Wishes
Paper Tiger

[skid]

Yes and no. Its quite a different flight experience and appeals to different people in different ways. Don't know anything about the really old Q300's they're bringing across the Tasman but they're competing against a whole bunch of brand new ATR600's AIR are bringing online. In regard to the A320's its quite a different experience. Jetstar crams 180 seats into those old airframes using the airline industry's very tightest 29 inch pitch, (distance between rows of seats). I'm just a normal 6ft and my knees are rammed hard against the seat in front. AIR has newer planes 163 seat configuration generally 32 inch pitch, (3 inches is a lot of extra room) and the snack, beverage and water during a Koru hour flight aren't too bad for a short domestic flight.

You mean someone crams more seats than AIR?:) Maybe I was just on some unlucky flights with AIR--but the bottom line is --lets be realistic -who really gives a stuff on a short 1 hour flight--Most ,I dare say will go for a good price---Long haul is a different story --Im happy to fly Jetstar anywhere around NZ but the one time I flew them longer distance (Singapore)It was no fun--Geez I think the meal was $25 Aus If memory serves---Thats where a better airline comes in--So my last long haul to north America was air NZ (crampt)--last to Asia MAL (comfortable) before that Thai(the best out of the lot)----but times change along with planes etc.--If AIR flew to Asia with a Dreamliner for $1100-1200 Id give it a go--Otherwise Im happy as Larry on either of the others. AIR still has the AK-Vancouver pretty well sewn up and I hate flying through the states---I hope the cheap oil and competition both sick around as I like to travel.

[winner69]

Today the day 3 bucks reached ....and broken?

Love these cyclical stocks ....especially when the cycle is up

Most things have same cyclical attributes in them anyway, even the so called non-cyclical things

[couta1]

Today the day 3 bucks reached ....and broken?

Love these cyclical stocks ....especially when the cycle is up

Most things have same cyclical attributes in them anyway, even the so called non-cyclical things Yep as much as some like to divide stocks up they all have a cyclical element to them. I see tourism is edging even closer to overtaking dairy as an earner with a large increase in inbound flights expected this summer with a concern that the current infrastructure may not cope with the influx.More positive news for holders.

[Hoop]

Today the day 3 bucks reached ....and broken?

Love these cyclical stocks ....especially when the cycle is up

Most things have same cyclical attributes in them anyway, even the so called non-cyclical things

Hmmm..I wonder where Xerof's Bat is.....not the cricket bat type..:mellow:

[winner69]

Hmmm..I wonder where Xerof's Bat is.....not the cricket bat type..:mellow:

I looking for a flag pole to form from here

[winner69]

Looks like Roger been banned

Won't be joining us with the celebratory drinks when $3 reached

[sb9]

Today the day 3 bucks reached ....and broken?


Hmmm...might have to wait for that bit longer by the looks...

Hopefully Roger is back on deck sooner....

[Fox]

Great to see a healthy acquisition of 423K shares to the CFO's holding, bringing him up to 713K ordinary shares :)

[Snow Leopard]

Great to see a healthy acquisition of 423K shares to the CFO's holding, bringing him up to 713K ordinary shares :)

He had 1,142,857 CFO options currently available to exercise and so can acquire another 700K shares, all at an average of $1.34.

Many more option coming on stream for him down the track.

I am sure he thought it all added up for him :p

Best Wishes
Paper Tiger

[brend]

Looks like Roger been banned

Won't be joining us with the celebratory drinks when $3 reached

again - what for this time?

[Xerof]

Hmmm..I wonder where Xerof's Bat is.....not the cricket bat type..:mellow:
"My" Bat appeared right on cue at $3.00 some months ago. It duly flew the coop, to the disbelief of several vocal supporters. I then said AIR would find good support around $2.25. It did find support a little above that level.

Those were my only two posts on AIR, as some people like an occasional injection of TA harmonic 'claptrap' to counter the rampjets

I haven't looked at a chart for ages, but might have a peek later.

Later....

[Joshuatree]

Looking forward to your harmonic TA Injection like a zephyr laden with the scent of freshly mown grass to cover that of what doggies have been doing.:t_up:

[Hoop]

Looking forward to your harmonic TA Injection like a zephyr laden with the scent of freshly mown grass to cover that of what doggies have been doing.:t_up:

One thing I have learn't in these past 43 years of holding cyclical shares...... one sniff of doggie doodoo mixed with lawn clippings and I'm gone..

Holding cyclicals well away from their cycle bottoms scares the hell out of me me..cyclicals are dangerous share investments and when their PE Ratios fall to very low levels they can become scary.....
As fundamental analysis is often useless for cyclicals around their tops of cycles there is a FA lure that sucks in new investors like moths to a flame...When it comes to Cyclical stocks observing tea leaves can be just as reliable as FA....so Fibonacci using number simulations and % patterns to gauge animal instinctive behaviour (harmonic trading discipline) can't be any worse..

As crazy as it seems ...Evidence has shown when using FA, often the best buying opportunity for cyclicals is when the PE Ratio is ridiculously high and the most dangerous time is when the PE Ratio is ridiculously low

Disc: Hoop has AIR shares

[Beagle]

One thing I have learn't in these past 43 years of holding cyclical shares...... one sniff of doggie doodoo mixed with lawn clippings and I'm gone..

Holding cyclicals well away from their cycle bottoms scares the hell out of me me..cyclicals are dangerous share investments and when their PE Ratios fall to very low levels they can become scary.....
As fundamental analysis is often useless for cyclicals around their tops of cycles there is a FA lure that sucks in new investors like moths to a flame...When it comes to Cyclical stocks observing tea leaves can be just as reliable as FA....so Fibonacci using number simulations and % patterns to gauge animal instinctive behaviour (harmonic trading discipline) can't be any worse..

As crazy as it seems ...Evidence has shown when using FA, often the best buying opportunity for cyclicals is when the PE Ratio is ridiculously high and the most dangerous time is when the PE Ratio is ridiculously low

Disc: Hoop has AIR shares

Luckily for you since the annual meeting the TA and FA is lining up very nicely. It crossed over the 100 day MA at $2.61 within 24 hours of the annual meeting so anyone who was quick enough to buy has some very nice unrealised gains in the last three weeks $2.96 / $2.61 = 13.4%. OTOH those that simply took the view on a fundamental basis a couple of months ago that Jetstar's entry of a few small aircraft they couldn't sell wouldn't really make much of a fundamental difference to AIR's earnings and outlook and bought going directly against the TA signals at the time and straight after that announcement at $2.40, have made $2.96 +9.5 cent fully imputed divvy = $3.055 / $2.40 = 27.2%.

I certainly prefer it when TA and FA line up and all signals say buy, but credit to those that simply took a fundamental view and had the courage of their convictions to buy against the trend and make twice as much.

[couta1]

Welcome back from the cooler Roger, Air thread dropped off the first page while you were away. Hey winner last trading day of the month to break $3:cool:

[sb9]

Good to see you back on the forum Roger, hopefully we see the magic $3 mark today and more importantly it stays beyond that.

[Hoop]

Welcome back from ST Purgatory Roger :D...as you noticed I took advantage of the empty spaces on the AIR thread while you were away :D:D I helped to keep the price below $3 until you got back ;);)

[Beagle]

Thanks guys. I think we'll need to be very patient for our entry to the $3+ range. We've got to clear out all the people that believe AIR is a cyclical stock and $3 in the proven top before that happens and that'll take quite some doing. I'm very patient though :)

[sb9]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11537455

Another feather in their cap :t_up:

[Hoop]

Thanks guys. I think we'll need to be very patient for our entry to the $3+ range. We've got to clear out all the people that believe AIR is a cyclical stock and $3 in the proven top before that happens and that'll take quite some doing. I'm very patient though :)

Roger..I hate to pop your bubble..... but in reality AIR is a cyclical stock it always has been and it always will be...that's because the airline business is a cyclical industry that is very vulnerable to economic conditions...they are also very reactive to interest rate changes.....Cyclicals are volatile and can turn on a dime...Investing in cyclicals can make you a quick fortune, unfortunately they can also wipe out your portfolio just as quick

As I said so many times on ST (many of my posts and charts on ST have been deleted!!! Hacker???) FA doesn't help you much with cyclical stocks

Ok...AIR is reaching $3 ...it's nearing the top its very steep historic price oscillation wave..it doesn't mean it will stop and reverse at $3 it could go $4 or $5 as it depends on the whereabouts of the stages of the global economic cycle and the effects of each stage e.g mature stage = economic good times = more demand = increased costs to satisfy demand + more competition = decreased market share + lower margins.....so beware and don't fall in love, because the very nature of these cyclical beasts is to exhibit growth during good times and shrink back during bad times taking back all your gains....This behaviour causes a surprising reliable share price oscillation pattern to occur (hence the term cyclical),,, it shows up very clearly on very long term charts...In the past $3 was the oscillation top end for AIR.

.................................................. .................................................. .................................................. .................................................. ..................................................

I posted a historic chart with Company results on the 8th May 2015 but it has been deleted by someone (the whole week on AIR thread is missing)... so I will repost it here to prove my point.

Note how the shareprice falls but the earning are breaking records and the brokers forward earnings are stella...why is the shareprice falling and the PE Ratio is looking ridiculously low???? Mr Market stupid?..no, it is the cyclical behaviour of a cyclic stock ignoring its past stella fundamentals and reacting to recent negative changes of it's outside environment.. My example below shows forward looking (projection analysis) part of the FA discipline can be very unreliable when dealing with cyclical stocks..


http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%20199-2001%20broker%20forecasts_1.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%20199-2001%20broker%20forecasts_1.png.html)

[Beagle]

The example you've posted Hoop conveniently coincides with the Sept 11 2001 attack and the subsequent dramatic drop off in air travel. It was unfortunate that AIR had invested heavily in Ansett just before that and the financial pressure of those two things coincided with the burst of the dotcom bubble and tech wreck of 2001. This one off event happened fourteen years ago. I think you'd make a stronger case if you looked more closely at yields and load factors during the GFC and the effects on the company then rather than picking on the one isolated case when AIR needed support, support that the Govt has been richly rewarded for showing I might add. Even then there's lots of companies that got hammered during the GFC... what is arguably the biggest financial crisis since the great depression of 1929 so the fact that the airline came through that without artificial support for example like the U.S. Govt provided for many of the financials and vehicle manufacturers augers well for the robustness of the current business structure. Yes their SP got a beating during the GFC and so did a heck of a lot of other companies.

The fact is whether people's political leanings and moral compass like it or not, the Government does implicitly stand behind this company and is being richly rewarded for doing so. Unlike the mixed ownership model of the gentailiers who are currently trading on PE's somewhere generally in the low 20's with low growth prospects and specific risk by virtue of the aluminium smelter's potential shut-down, AIR's PE looks especially cheap and its growth prospects especially good and the specific possible risks of higher oil and more competition already appear to be factored in and yet we still have an incredibly low PE.

Yes $3 has been the top in recent years but they've never made anything like $496m before tax before (Fy15) have they and now incredibly we're looking at something like doubling that !! The jury is out on where oil is going, there is no way that can be predicted reliably and what their cost structure in that regard looks like going forward but what I see is an airline that's smashing the ball out of the park in "indifferent" and certainly not booming economic conditions. What if the indifferent, low growth, low oil price, low interest rate conditions continue, (which looks likely at this stage), and they keep smashing the ball out of the park at circa 60 cps earnings for years :cool: My guess, investors will be clambering to climb on board and enjoy regular special dividends.

[freddagg]

Air may be cyclical but for the last 10 yrs the cycles have varied between good and fantastic compared to the top 50

7697

[winner69]

I love cyclicals - especially when they are 'cyclicing' upwards

But as Hoop says they can quickly turn so watch those charts

As Mr P also said - the market giveth but the market also taketh away (quickly in some cases)

AIR wil keep 'cyckicing' upwards for a while yet

[Bjauck]

Air may be cyclical but for the last 10 yrs the cycles have varied between good and fantastic compared to the top 50

7697

Previous ten year cycle for AIR was not so flash! Also over the last 20 years QAN comes out as the better investment for a shareholder...

[Absolute144]

Has nobody mentioned the great rates on grabaseat today?

[winner69]

Well that was a bummer of a day ... and a bummer of week really

Maybe these ceilings are real ..... not unheard of for stocks to trade on PEs of 3 or 4

Hope next week is better than this

Bought a bag of plane lollies today - $1,20 at Countdown - just to remind me

[Beagle]

Well that was a bummer of a day ... and a bummer of week really

Maybe these ceilings are real ..... not unheard of for stocks to trade on PEs of 3 or 4

Hope next week is better than this

Bought a bag of plane lollies today - $1,20 at Countdown - just to remind me

After such a strong gain over the last few weeks since the annual meeting when it started that day at $2.50 some consolidation around these level's is not unexpected and I did warn you that you'll have to be patient.
Senior managers have been helping themselves to a payday by cashing in shares recently exercised as part of their long term incentive plan so that hasn't helped.

The market generally has been surprisingly strong this month and its become quite difficult to find pockets of value remaining therein, ...with a few obvious exceptions :D

Be careful how many of those plane lollies you eat at once...don't want your health to crash and burn of your own making :)

[Zaphod]

While there is always plenty of somewhat contradictory advice on these forms, as always the golden rule stands; DYOR. If anyone is buying and selling based purely on comments from this forum, then they are being reckless.

[Beagle]

Air may be cyclical but for the last 10 yrs the cycles have varied between good and fantastic compared to the top 50

7697

Very interesting chart and shows that notwithstanding the worst global financial crisis since the great depression in 1929 that over the last decade despite wild swings in oil prices and economic cycles that AIR has outperformed the NZX50 2:1. This makes something of a mockery of the old adage that you shouldn't "marry" an airline stock.

Further, Chris Luxon claimed at the annual meeting that the company has never been better positioned so the outlook would appear to be very bright. In my view with the current extremely low PE the SP is well primed for a repeat of the last decade's performance. I fully intend to be a long term holder but each to their own and YES, definitely do your own research.

[Snow Leopard]

Air may be cyclical but for the last 10 yrs the cycles have varied between good and fantastic compared to the top 50

7697

So what's wrong?

1/ It is a graph of about 13 years;
2/ (and the big jump in share price in 2004 is the dead giveaway for this one) the AIR data fails to account for the share consolidation;
3/ You are comparing a gross value with a capital value.

See this post (http://www.sharetrader.co.nz/showthread.php?1088-AIR-NZ&p=593966&viewfull=1#post593966) for a better view of the data

The correct conclusion remains:
Air is cyclical and your returns have, historically, over any medium to long time frame varied between terrible and fantastic.

Best Wishes
Paper Tiger

PS. Past performance is not a guarantee of future returns.

[skid]

Very interesting chart and shows that notwithstanding the worst global financial crisis since the great depression in 1929 that over the last decade despite wild swings in oil prices and economic cycles that AIR has outperformed the NZX50 2:1. This makes something of a mockery of the old adage that you shouldn't "marry" an airline stock.

Further, Chris Luxon claimed at the annual meeting that the company has never been better positioned so the outlook would appear to be very bright. In my view with the current extremely low PE the SP is well primed for a repeat of the last decade's performance. I fully intend to be a long term holder but each to their own and YES, definitely do your own research.

I now pronounce you ...Man and Airline:t_up:

[Beagle]

LOL Dating cyclical stocks v marrying them ? Who would have thought an airline stock would give you an average 13% compound return over the last decade. Not many stocks have done this with obvious notable exceptions like RYM, FPH and other market darlings. Who's best positioned for the next ten years ? Stocks priced for absolute perfection trading on a PE of circa 30 or those trading on a PE of 5 ?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11538360&ref=NZH_Tw

[winner69]

The euphoria over winning the RWC will be the trigger that takes the AIR share price over $3 and beyond this week

Bring it on

[Beagle]

The euphoria over winning the RWC will be the trigger that takes the AIR share price over $3 and beyond this week

Bring it on

And their planes are painted the right colour...this new Dreamliner has never looked so good http://www.airnewzealand.com/dreamlinerflyhappy/en#!/experience :t_up:

[skid]

And their planes are painted the right colour...this new Dreamliner has never looked so good http://www.airnewzealand.com/dreamlinerflyhappy/en#!/experience :t_up:

Designed with happiness in mind ...blissfully comfortable...WOW...I think they may be adding something to their oxygen mix:)

[Jay]

Hasn't started well w69, lets hope it is people still slow to get moving for a Monday after the Sunday!
Thought looking at the RSI it is overbought, needs a bit of a breather before the next launch or should I say take off :-)

[Hoop]

http://www.airnewzealand.com/dreamli...n#!/experience (http://www.airnewzealand.com/dreamlinerflyhappy/en#%21/experience) Nice advert Roger, but all company advertising are designed to make that company look good ..eh

There are 3 variants of Dreamliners operating (wiki) 787-8 787-9 787-10..AIRNZ has the 787-9 variant
Air NZ (as of 30/9/2015 Wiki) has 5 and there are 19 Airlines Companies who have more than Air NZ..Of the nearest competition Qantas has 11 ...
List of 787 orders and deliveries (as of 30/9/2015 Wiki) (https://en.wikipedia.org/wiki/List_of_Boeing_787_orders_and_deliveries)
There are noticeable absences on that list (e.g Emirates)
They have Airbus 380's variants

[winner69]

Hasn't started well w69, lets hope it is people still slow to get moving for a Monday after the Sunday!
Thought looking at the RSI it is overbought, needs a bit of a breather before the next launch or should I say take off :-)

Pretty awful eh

Must check where the trailing stop is at the moment ......maybe better if I don't in case it tells me to sell .....I see nothing

[couta1]

Pretty awful eh

Must check where the trailing stop is at the moment ......maybe better if I don't in case it tells me to sell .....I see nothing
Back to the kitchen winner for a dose of baking to take your mind off short term oscillations between overbought and oversold, just keep thinking about the next set of results and the ones following that and relax.

[brend]

http://www.airnewzealand.com/dreamli...n#!/experience (http://www.airnewzealand.com/dreamlinerflyhappy/en#%21/experience) Nice advert Roger, but all company advertising are designed to make that company look good ..eh

There are 3 variants of Dreamliners operating (wiki) 787-8 787-9 787-10..AIRNZ has the 787-9 variant
Air NZ (as of 30/9/2015 Wiki) has 5 and there are 19 Airlines Companies who have more than Air NZ..Of the nearest competition Qantas has 11 ...
List of 787 orders and deliveries (as of 30/9/2015 Wiki) (https://en.wikipedia.org/wiki/List_of_Boeing_787_orders_and_deliveries)
There are noticeable absences on that list (e.g Emirates)
They have Airbus 380's variants

wiki says Qantas Group. I don't believe Qantas per se has any dreamliners (yet) only the Jetstar fleet. They did recently place an order for 15 787-9's.

Emirates are going to stick with the A380's the CEO is a big fan.

http://www.dw.com/en/emirates-ceo-fights-for-future-of-giant-airbus-a380/a-18410649

[Hoop]

wiki says Qantas Group. I don't believe Qantas per se has any dreamliners (yet) only the Jetstar fleet. They did recently place an order for 15 787-9's.

Emirates are going to stick with the A380's the CEO is a big fan.

http://www.dw.com/en/emirates-ceo-fights-for-future-of-giant-airbus-a380/a-18410649

Yeah ..thanks for the Correction Brend....It is Qantas Group....not Qantas (quote...Of the nearest competition Qantas has 11 ...) It was lazy typing by me

[Beagle]

http://www.airnewzealand.com/dreamli...n#!/experience (http://www.airnewzealand.com/dreamlinerflyhappy/en#%21/experience) Nice advert Roger, but all company advertising are designed to make that company look good ..ehThere are 3 variants of Dreamliners operating (wiki) 787-8 787-9 787-10..AIRNZ has the 787-9 variant
Air NZ (as of 30/9/2015 Wiki) has 5 and there are 19 Airlines Companies who have more than Air NZ..Of the nearest competition Qantas has 11 ...
List of 787 orders and deliveries (as of 30/9/2015 Wiki) (https://en.wikipedia.org/wiki/List_of_Boeing_787_orders_and_deliveries)
There are noticeable absences on that list (e.g Emirates)
They have Airbus 380's variants

Have you ever seen an ugly fat person in an advertisement LOL. Yeap all Qantas group Dreamliners are online with the Jetstar brand and they have crammed over 330 seats inside the airframe. This suggests the name of the aircraft becomes something of an oxymoron. Edit, Yeap Jetstar are all "class", a whopping 335 seats in the smaller 787-8 model, ouch http://www.seatguru.com/airlines/Jetstar/Jetstar_Boeing_787-8.php
787-10's are designed as a shorter range version mate.


Pretty awful eh

Must check where the trailing stop is at the moment ......maybe better if I don't in case it tells me to sell .....I see nothing

http://www.airnewzealand.com/dreamlinerflyhappy/en#!/experience/premiumeconomy/premiumseat
Put your feet up mate and think about next year's trip to the U.K. which will be free from your profits. Premium economy looks pretty good to me. Fly the Dreamliner to Singapore and then catch Singer's A380 from there.

[winner69]

Back to the kitchen winner for a dose of baking to take your mind off short term oscillations between overbought and oversold, just keep thinking about the next set of results and the ones following that and relax.

Looking really bad for AIR share price though Roger/couts ...... wasn't going to look but a little peek said $2.87

Can't be right

Hope Russian A320 crashing not sending jitters into air line stocks

[winner69]

And after losing the rugby QAN goes up (and the markets taking a bashing as well)

ABs euphoria at winning sends AIR price crashing

Go figure

QAN will get to 4 bucks before AIR gets to 3 bucks ......bad

[skid]

ill bet if you took a survey of the total passengers for both QAN and AIR a surprising number of passengers wouldnt even know the name of NZ and OZ rugby teams---Theres just so much that goes on out there its hard to put a reason for everything--might just be that the euphoria jinxed it for the moment--Sentiment is an elusive beast--It just looks gloomy when compared to world cup win and it supposedly racing past the big $3 mark (which it may still do)

And who would guess that all those flash Dreamliners would belong in the Jetstar fleet instead of the Mother ship QAN.

IMO the dreamliners just basically up the ante--If you fill them your sweet--If not,its a pretty big price tag to make payments on. Guess it depends on your routes and demand.

Im not looking forward to arriving somewhere when 2-3 dream liners arrive at the same time (but it would be interesting to try one)

Aside from the Russian crash,there was a plane in the States that caught fire on the runway (engine) (Im not sure what kind it was or if AIR has many of those types but sometimes those things have an effect,even though in most cases ,they logically shouldnt.

[winner69]

OMG - 285 and sinking fast

Might have to believe the man on the radio tonight when he probably will say '...a bit of profit taking in AIR after a strong run over the last few weeks'

Those gurus know everything eh!

[777]

Im not looking forward to arriving somewhere when 2-3 dream liners arrive at the same time (but it would be interesting to try one)

.

Why? They are only 300 seaters or thereabouts.

Comparisons on this thread with A380's is a laugh. The correct comparison is the A350 which only one operator has at the moment.

[skid]

Why? They are only 300 seaters or thereabouts.

Comparisons on this thread with A380's is a laugh. The correct comparison is the A350 which only one operator has at the moment.

Your absolutely right there 777--Ill have to brush up on my planes (have'nt flown in either)--(multiple A380s landing would certainly clog things more-I stand corrected)

[skid]

Why? They are only 300 seaters or thereabouts.

Comparisons on this thread with A380's is a laugh. The correct comparison is the A350 which only one operator has at the moment.

Your absolutely right there 777--Ill have to brush up on my planes (have'nt flown in either)--(multiple A380s landing would certainly clog things more-I stand corrected)

[Snow Leopard]

OMG - 285 and sinking fast

Might have to believe the man on the radio tonight when he probably will say '...a bit of profit taking in AIR after a strong run over the last few weeks'

Those gurus know everything eh!

Not so much marrying an airline as just having a brief affair.

Best Wishes
Paper Tiger

[couta1]

OMG - 285 and sinking fast

Might have to believe the man on the radio tonight when he probably will say '...a bit of profit taking in AIR after a strong run over the last few weeks'

Those gurus know everything eh! Yep profit taking the reason for most price drops according to those gurus, wouldn't sound right if they said a bunch of people had urgent bills to pay or lots of home renovations or that there still a whole bunch of non believers selling out, gurus too lazy to think outside the square aye.

[winner69]

I sussed it and no need to sell because it closed at 284 (stop was 284)

Obviously stop set too tight eh - just loosened the stop and by using 3 X ATR the stop has dropped to 282

Whew that was close

Tomorrow will be a much better day - and its Melbourne Cup day

[winner69]

Omen bet in Melbourne Cup

TRIP TO PARIS (via Heathrow with Air NZ)

Or though the mood Roger is in QUEST FOR MORE might be appropriate

[Beagle]

All relationships have their up's and down's.

Actually speaking of up's and down's...ever thought the mountains looked really close on ascent and especially decent at Queenstown and the runway a bit short and narrow ?... well it turns out you're not alone. If they're worried I'd say passengers have every right to be especially in adverse visibility conditions or high winds :eek2:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11538718

QUEST FOR MORE sounds good to me Winner. If the jockey is wearing all-black that's your signal to bet the house on it :)

[Snow Leopard]

Well if you QUEST FOR MORE then:

sell your Air New Zealand shares trading at a mere 6.3% discount to broker consensus;

and

buy Qantas with their 14% discount to broker consensus and where you get the added bonus of

true All Blacks support (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11538874):

http://media.nzherald.co.nz/webcontent/image/jpg/201545/qantas_2_620x311.jpg

Best Wishes
Paper Tiger

[sb9]

Qantas crew dressed up in all blacks colours, priceless!!!at least we got one up here.

[brend]

Qantas crew dressed up in all blacks colours, priceless!!!at least we got one up here.

Ironic though that all the crew apart from the co pilot were kiwi...maybe qantas got the last laugh haha

[Marilyn Munroe]

Ironic though that all the crew apart from the co pilot were kiwi...maybe qantas got the last laugh haha

They were probably kiwi staff from Queer and Nasty Airlines NZ subsidiary Jetconnect.

Jetconnect operates 737's in Queer and Nasty livery. Stabling trans-tasman aircraft in NZ allows higher aircraft utilisation.

Employing cheaper Kiwi aircrew also gives the union bashers in senior management and the boardroom at Queer and Nasty Airlines a bit of a happy buzz as well.

Boop boop de do
Marilyn

[tony64peter]

If the Russian A320 disaster was not sabotage then I imagine AIR price could keep going south. They have around thirty A320's and a world wide grounding won't be pretty.

[couta1]

If the Russian A320 disaster was not sabotage then I imagine AIR price could keep going south. They have thirty plus A320's and a world wide grounding won't be pretty. Evidence points toward bomb, besides that plane had been in service for near on 20 years.

[tony64peter]

Evidence points toward bomb, besides that plane had been in service for near on 20 years.

Same software and systems. Hope the evidence is right.

[couta1]

Same software and systems. Hope the evidence is right. The plane suffered a sudden calamity and broke up in the air sounds way too extreme for a mechanical or technical fault with the pilot having no time to send out a distress call, this one has sabotage written all over it.

[skid]

From what I can see AIR has only 5 767s but this would have been a very different news item if the plane had been in the air

http://www.cnbc.com/2015/10/29/dynamic-airways-plane-caught-fire-on-runway-faa.html

This was a 767 -200 and AIR have 767-300s so it may not be an issue at all if they are different beasts

It does seem more likely the Russian disaster was sabotage and if so things should settle in terms of the type of plane etc.,even if its not the case politically.

[couta1]

From what I can see AIR has only 5 767s but this would have been a very different news item if the plane had been in the air

http://www.cnbc.com/2015/10/29/dynamic-airways-plane-caught-fire-on-runway-faa.html What would you expect from a 30 year old plane that has been owned by several airlines?

[skid]

What would you expect from a 30 year old plane that has been owned by several airlines?

i would expect that the ticket better be alot cheaper:)

[biker]

S
From what I can see AIR has only 5 767s but this would have been a very different news item if the plane had been in the air

[url]http://www.cnbc.com/2015/10/29/dynamic-airways-plane-caught-fire-on-runway-faa.html[/url

This was a 767 -200 and AIR have 767-300s so it may not be an issue at all if they are different beasts
........

And Air NZ's 767's don't have Pratt & Whitney engines

[skid]

S

And Air NZ's 767's don't have Pratt & Whitney engines

That must be the difference to the 767-200 to 767-300...problem solved

[Beagle]

S

And Air NZ's 767's don't have Pratt & Whitney engines


And further, they're starting to retire the 767-300's from March 2016. Unlike some airlines, AIR don't run planes that are of an age where they belong in MOTAT.

Average age of AIR's fleet is only 7.5 years, one of the most modern fuel efficient fleet's in the world.

[slimwin]

It doesn't matter the age of the aircraft if it's maintained correctly.

[Hoop]

Opened up 1 to 285...I would've thought yesterdays sell off was an over done considering the views by some on ST that AIR is fundamentally well under-priced....Mr Market had last night to think about yesterdays action and so far today considers AIR should still be correcting after its steep rally of +20% within the last month.

No major technical shifts... short term has fired sell signals and very close to medium term signaling....My discipline (medium term --default) says hold so I'm still holding...

[iceman]

The plane suffered a sudden calamity and broke up in the air sounds way too extreme for a mechanical or technical fault with the pilot having no time to send out a distress call, this one has sabotage written all over it.

These comments from the planes owner certainly point to an attack. Sadly it will be difficult to have any faith in any reports that will come out of Putin's Russia, the guy tried all he could to stop the investigation into the Malaysian Airlines flight shot down over Ukraine last year. https://www.rt.com/news/320469-sinai-plane-owner-statement/

[Beagle]

It doesn't matter the age of the aircraft if it's maintained correctly.

Airframes, systems, wiring, engines..all sorts of things gradually deteriorate over time...its the same with boats and trust me I know how bad maintenance on older boats can get. AIR's depreciation policy is to write down the value of aircraft on a straight line basis over 18 years. Generally after that time frame they consider the planes either uneconomic to reliably and efficiently work, (advances in technology and efficiency of newer planes) with or simply unfeasible, (to difficult to keep them operationally reliable and airworthy).

Would you buy your child a 30 year old car with no modern safety systems like air bags, crumple zones, ABS brakes, dynamic stability control e.t.c ? and yet some people are putting their kids in an old 30 year relic Saab 340 and flying them around New Zealand. Civil aviation has given its approval and says its okay so it must be right, really ?


These comments from the planes owner certainly point to an attack. Sadly it will be difficult to have any faith in any reports that will come out of Putin's Russia, the guy tried all he could to stop the investigation into the Malaysian Airlines flight shot down over Ukraine last year. https://www.rt.com/news/320469-sinai-plane-owner-statement/

I hesitate to point this out but I think its somewhat ironic that a Russian owned airline has apparently taken a terrorist hit. The principle's of natural justice playing themselves out perhaps...

Winner69 I reckon "Trip to Paris" is the omen bet for AIR shareholders in the Melbourne cup and its the second favourite. Even if you lose then go and book one on AIR for $999 each way for shoulder season in 2016 and you're still a Winner :) A brave man would bet $2K on the place at about $2.30 and try and get a Trip to Paris for free :D

[sb9]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11539218

Ouch, not a good look :eek2:

[couta1]

Remember Roger winner69 will be flying the coop if the share price goes below $2.82( He will be keeping one eye on the market while studying his Melbourne cup prospects)

[Beagle]

Remember Roger winner69 will be flying the coop if the share price goes below $2.82( He will be keeping one eye on the market while studying his Melbourne cup prospects)

He's quiet today...maybe no good at multi-tasking and can't work out which trip to Paris he really wants :)

[sb9]

Remember Roger winner69 will be flying the coop if the share price goes below $2.82( He will be keeping one eye on the market while studying his Melbourne cup prospects)

280 now, calling winner69.....

[couta1]

280 now, calling winner69.....
Winner be gone on today's low volume decline methinks.

[Joshuatree]

ehem, thanks for the reminder JT :P Least I'm happier now haha :D

Still happy.? The s/p is looking downward guys.what are you going to do; do you have margin of safety; a stopploss or do you hope to ride it out? Jeepez you and pierre need to change your strategies and not buy on tops. Don't follow or be influenced by anyone!!

[couta1]

Still happy.? The s/p is looking downward guys.what are you going to do; do you have margin of safety; a stopploss or do you hope to ride it out? Jeepez you and pierre need to change your strategies and not buy on tops. Don't follow or be influenced by anyone!!
Why wouldn't they be? any clown could see late last week the stock was becoming overbought by observing basic TA indicators and that it would take a break and head downward, doesn't take away from the huge upside potential plus increasing divvies for the patient.

[Beagle]

Why wouldn't they be? any clown could see late last week the stock was becoming overbought by observing basic TA indicators and that it would take a break and head downward, doesn't take away from the huge upside potential plus increasing divvies for the patient.

Agreed. Some people tried talking it up over $3.00 and I suggested a number of times some consolidation was far more likely. Fundamentals remain brilliant and patient investors will find ownership a rewarding experience.

[Longhaul]

Last week I was a little annoyed that my stop was triggered at 2.92 and sold at 2.91. But I think it was a good lesson now to set stops and stick with them, after all we set them for a reason. Hope for all holders it stabilises and resumes liftoff.

[sb9]

Relatively light volume, nothing to panic just profit takers. Should be back up soon, and it'll propel much higher when that happens.

[Joshuatree]

Why wouldn't they be? any clown could see late last week the stock was becoming overbought by observing basic TA indicators and that it would take a break and head downward, doesn't take away from the huge upside potential plus increasing divvies for the patient.

Suggest you google clowns; real clowns don't need just a red nose and big shoes to be funny guys its a serious vocation and very physical. I hope the s.p picks up but if not, I'm out having set a good margin of safety with my purchase price re $2.41-43 so i think a strategy to deal with downside is sensible and important if you are an investor.

[skid]

Opened up 1 to 285...I would've thought yesterdays sell off was an over done considering the views by some on ST that AIR is fundamentally well under-priced....Mr Market had last night to think about yesterdays action and so far today considers AIR should still be correcting after its steep rally of +20% within the last month.

No major technical shifts... short term has fired sell signals and very close to medium term signaling....My discipline (medium term --default) says hold so I'm still holding...

Are you still in Hoop or have you decided to profit take?--..always an education getting your views..

[couta1]

Relatively light volume, nothing to panic just profit takers. Should be back up soon, and it'll propel much higher when that happens.
Less than a third of the normal average daily volume in fact, so that gives you a clue to who's selling ie No one with a decent sized holding;)

[Beagle]

Are you still in Hoop or have you decided to profit take?--..always an education getting your views..

See post #3871.

Fait bit of profit taking in SKL today on light volume too.

[Crackity]

Winner69 I reckon "Trip to Paris" is the omen bet for AIR shareholders in the Melbourne cup and its the second favourite. Even if you lose then go and book one on AIR for $999 each way for shoulder season in 2016 and you're still a Winner :) A brave man would bet $2K on the place at about $2.30 and try and get a Trip to Paris for free :D

Trip to Cornwall was actually the correct answer :)

[skid]

See post #3871.

Fait bit of profit taking in SKL today on light volume too.

SP is 4c lower than post#3871

[winner69]

Trip to Cornwall was actually the correct answer :)

And I had a pub lunch there a month ago .....that should have been the omen eh

[Baa_Baa]

And I had a pub lunch there a month ago .....that should have been the omen eh

But have you sold winner? You dropped your exit price, and even that was hit today.

[stoploss]

Profit up , share price down ...

http://www.dailymail.co.uk/money/markets/article-3300021/Ryanair-raises-annual-profit-forecast-says-zero-visibility-fourth-quarter-bookings-expects-fare-war.html

[Hoop]

Are you still in Hoop or have you decided to profit take?--..always an education getting your views..

Hi Skid..Yes still in
Short term signals have fired sell signals but I don't use these as I'm not a short term trader...Relying on short term signals when one is a medium/long term investor puts you at a high risk of being whipsawed..
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2003102015.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2003102015.png.html)

[skid]

Hi Skid..Yes still in
Short term signals have fired sell signals but I don't use these as I'm not a short term trader...Relying on short term signals when one is a medium/long term investor puts you at a high risk of being whipsawed..
http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2003102015.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2003102015.png.html)

So(for educational purposes)when would the medium term signal a sell--- breaking 2.70? (support)--?

[Hoop]

So(for educational purposes)when would the medium term signal a sell--- breaking 2.70? (support)--?
Some medium term TA indicator signals are triggering off now at 2.80ish..I can't see many indicators as Big charts only has limited amount and Incredible charts does not present todays data (Yahoo) until much later tonight or tomorrow...Unfortunately the Charting signals which I use are late due to the sudden sharp rally and my assumption is that most TA indicators would've fired off sell signals before the EMA signals are triggered..The EMA50, 100, 200 are at 2.70 2.65 2.60 and I really don't want to be still in waiting for these to fire but there is a Chartist quandary at these levels as there are line support areas around these 2.75 to 2.65 levels which combined with the EMA's makes a strong floor and the investing wisdom is to not sell around support areas ....so it seems if AIR price keeps falling there is going to be a TA indicators v TA charting conflict scenario..so life could get complicated...
In Hindsight there's a good argument to sell out when the shareprice faltered at the 2.95 resistance area......If the share price had happened to break through after selling it's easy enough to just buy in again...

I might think about it tomorrow as it is dangerous ignoring sell signals with cyclical stocks...even more so when they exhibit this topping pattern behaviour.

After all said and done..selling out at 2.80 realising +8% profit in 3/4 weeks is not all bad..

[skid]

Cheers for that--I get the impression that alot of regular posters are also sitting on profits,which of course is a different psychological situation than sitting on huge losses like some of the more spec shares.
Its interesting to look at all angles.
Aside from charts(which is more about market sentiment) There is always the fundamental side and I can understand why some,especially those who have put in alot of hard work to arrive at their conclusions,are in for the long haul and it will take a far more dramatic change to shift that strategy--And then there are plenty in the middle that although they like the company and fundamentals,are also a bit wary of market sentiment at the moment,so have set some boundaries.
Its an interesting mix. Its for the most part pointless to debate who is wrong or right,but is educational to look at all options as the outcome unfolds-whatever that is.
As with all things in life though,Ive found the greater the attachment ,the harder it is to let go.

[Hoop]

Cheers for that--I get the impression that alot of regular posters are also sitting on profits,which of course is a different psychological situation than sitting on huge losses like some of the more spec shares.
Its interesting to look at all angles.
Aside from charts(which is more about market sentiment) There is always the fundamental side and I can understand why some,especially those who have put in alot of hard work to arrive at their conclusions,are in for the long haul and it will take a far more dramatic change to shift that strategy--And then there are plenty in the middle that although they like the company and fundamentals,are also a bit wary of market sentiment at the moment,so have set some boundaries.
Its an interesting mix. Its for the most part pointless to debate who is wrong or right,but is educational to look at all options as the outcome unfolds-whatever that is.
As with all things in life though,Ive found the greater the attachment ,the harder it is to let go.

Yeah Skid A good summary

[percy]

Cheers for that--I get the impression that alot of regular posters are also sitting on profits,which of course is a different psychological situation than sitting on huge losses like some of the more spec shares.
Its interesting to look at all angles.
Aside from charts(which is more about market sentiment) There is always the fundamental side and I can understand why some,especially those who have put in alot of hard work to arrive at their conclusions,are in for the long haul and it will take a far more dramatic change to shift that strategy--And then there are plenty in the middle that although they like the company and fundamentals,are also a bit wary of market sentiment at the moment,so have set some boundaries.
Its an interesting mix. Its for the most part pointless to debate who is wrong or right,but is educational to look at all options as the outcome unfolds-whatever that is.
As with all things in life though,Ive found the greater the attachment ,the harder it is to let go.

Shares are like anything you buy,a house a car or whatever,the real money is made on purchasing.
Making sure your purchase is correct, means you have to work hard on your research.Good research results in good investments.Poor research results in poor results.
Attachment is where you have to back test your research.If you are confident in your research you can ride the ups and downs.Sentimental attachment is something all of us investors should try to avoid,as it was not part of our research. .

[skid]

I reckon research without attachment is the best out of the lot (but easier said than done)

I remember years ago when oilers were the rage-there was a coal seam oil share that posters loved so much they were going to get
t shirts made--when it sold out at not a great price ,it was a pretty hard landing for them.

No offense intended to AIR or any posters,but its just one more thing to put into the ole over shoulder computer:)

[sb9]

Such a shame that market is having such good rally and AIR isn't part of that, wonder why?

[Beagle]

Such a shame that market is having such good rally and AIR isn't part of that, wonder why?

I think some people have seen a few days of SP declines and have decided to lock in a small profit.

[sb9]

I think some people have seen a few days of SP declines and have decided to lock in a small profit.

Could only be traders locking in profit or else sp would've been north of $3 with this rally. Anyways happy to play waiting game, not concerned about short term drops.

[couta1]

Could only be traders locking in profit or else sp would've been north of $3 with this rally. Anyways happy to play waiting game, not concerned about short term drops.
Low volume downtrend probably driven by traders as you say plus your normal nervous small fish, no bigger fish are selling.

[couta1]

But have you sold winner? You dropped your exit price, and even that was hit today.
Okay winner time you answered Mr Baa_Baa's question or does your silence give us the answer?

[winner69]

Okay winner time you answered Mr Baa_Baa's question or does your silence give us the answer?

Low volume has been a real problem

[vin]

small fish selling out, I remember telling myself (back at $2.40) that I would sell at $2.80/90 if it ever reached that point again. However I've topped up, believe in the company and going to ride it out.

Peaks and troughs

[Jantar]

There is also a bit of nervousness worldwide about the A320 aircraft. Lets hope this latest one is found to be an onboard bomb, and not structural failure.

[tony64peter]

There is also a bit of nervousness worldwide about the A320 aircraft. Lets hope this latest one is found to be an onboard bomb, and not structural failure.
This aircraft incurred a significant tail strike some years ago and with the tail section landing some distance from the wings and front fuselage, plus no burn marks inside the tail section I'm picking structural.

Looks a nice candle today with volume increasing to the close, maybe a bottom.

[stoploss]

There is also a bit of nervousness worldwide about the A320 aircraft. Lets hope this latest one is found to be an onboard bomb, and not structural failure.

The A320 is a sound aircraft . This one reportedly had damage to the rear at some stage . So potentially it wasn't fixed correctly or checked up on properly. If it was structural failure it will be due to earlier incident and the maintenance .
imo current share price weakness has nothing to do with A320 .

[couta1]

Low volume has been a real problem
Notice how the share price went up as soon as the volume started flowing after 3pm, must be time for that whipsaw to spring forth aye Hoop?

[Joshuatree]

Thanks for getting it up couta means I'm still holding;)

[h2so4]

I think that Haka on the Tarmac helped a lot.

[Hoop]

Notice how the share price went up as soon as the volume started flowing after 3pm, must be time for that whipsaw to spring forth aye Hoop?

Yeah I think so Couta.I'm putting some faith into AIR that its correction is just a throw back action (A psychological behaviour after a sharp breakout rally)..

AIR was definitely looking like a bear for a few months and recently, after the AGM it broke out of it's bearish mode with the good forecasts from the AIR Management..Investors don't like bears and the AGM comments did not justify a bear scenario just yet so the investors bought in and everyone who wanted in had by the end of October got in and are now satisfied...Now comes the throwback..the lack of volume (momentum) lowers the demand and the price falls back...Its not really traders taking profits that causing the price to drop because the low volume says not many are selling (or buying for that matter)..its that psychological thing.. the investors being satisfied at the moment is the problem...As the price falls due to lack of momentum these satisfied investors may be tempted to start accumulating..it will also tempt others and the price/demand increases again..Seeing this action visually on a chart, the bull/bear line breakout ($2.70/$2.75) is where that support (temptation) should start ..

S&R areas isn't an exact science...maybe the rise off $2.77 could be where the support is..maybe the bottom of the throwback is around this level...maybe a bit lower around $2.70

Now that's my thinking and with it a possible scenario with good chances of happening.. now watch Mr Market make an idiot out of me..(I sell AIR then and break even)

Disc: still holding

[iceman]

AIR continues to add capacity. Next year increasing Auckland-Vancouver from 3 to 4 weekly, Auckland-Tokyo (Narita) from 7 to 9 with the Dreamliners and putting the Dreamliner to Cook Islands once per week.

[sb9]

Hope its better day for AIR sp today.

[Beagle]

Yeah I think so Couta.I'm putting some faith into AIR that its correction is just a throw back action (A psychological behaviour after a sharp breakout rally)..

AIR was definitely looking like a bear for a few months and recently, after the AGM it broke out of it's bearish mode with the good forecasts from the AIR Management..Investors don't like bears and the AGM comments did not justify a bear scenario just yet so the investors bought in and everyone who wanted in had by the end of October got in and are now satisfied...Now comes the throwback..the lack of volume (momentum) lowers the demand and the price falls back...Its not really traders taking profits that causing the price to drop because the low volume says not many are selling (or buying for that matter)..its that psychological thing.. the investors being satisfied at the moment is the problem...As the price falls due to lack of momentum these satisfied investors may be tempted to start accumulating..it will also tempt others and the price/demand increases again..Seeing this action visually on a chart, the bull/bear line breakout ($2.70/$2.75) is where that support (temptation) should start ..

S&R areas isn't an exact science...maybe the rise off $2.77 could be where the support is..maybe the bottom of the throwback is around this level...maybe a bit lower around $2.70

Now that's my thinking and with it a possible scenario with good chances of happening.. now watch Mr Market make an idiot out of me..(I sell AIR then and break even)

Disc: still holding

Top post and bang on the money I reckon...especially the temptation to buy more at around $2.75. I got seriously tempted yesterday when it hit $2.78 but thought like a fine wine I'd just let the SP and stock breathe a bit before having another drink :)

[stoploss]

05/11/2015 14:15


GENERAL


PRICE SENSITIVE


REL: 1415 HRS Air New Zealand Limited (NS)





GENERAL: AIR: Air NZ further invests in regional growth with ATR purchase





Air New Zealand Chief Executive Officer Christopher Luxon, joined by Prime


Minister John Key, has today announced the airline will purchase 15 new


ATR72-600 aircraft to operate its regional services.


Four of the new aircraft will allow for further growth on regional Air New


Zealand routes while 11 will replace the airline's ATR72-500 fleet.


At list prices the 15 new aircraft are collectively valued at $US375 million.





In 2012 the airline announced it would add to its ATR fleet with an


investment in 14 ATR72-600 aircraft - seven of these aircraft have since been


delivered with the remaining seven due to join the fleet by mid-2016.


The additional 15 new aircraft will begin arriving from late 2016.


Christopher Luxon says the airline is proud of its commitment to operating


both a world-leading turboprop fleet and a comprehensive regional network.


"The extra four 68 seat ATR72-600 that we are adding to our fleet will enable


us to operate up to an additional 600,000 seats into the New Zealand regional


market annually. This latest investment will further allow us to maintain


our low fare price and high frequency leadership," says Mr Luxon.





"Once these new aircraft arrive we will operate a fleet of 29 ATR aircraft,


the third largest ATR fleet in the world which is testament to the breadth


and depth of our regional network."


In addition to ATR aircraft Air New Zealand also currently operates ten


19-seat Beech 1900D and 23 50-seat Bombardier Q300 aircraft types.

[Poet]

Virgin Australia Claws Its Way to 1Q Profit -- Market Talk Posted on 5 November 2015 13:38 | Dow Jones Institutional News
0038 GMT [Dow Jones] Virgin Australia (VAH.AU) scraped its way to a small A$1.7 million ($1.2 million) profit in it first quarter, as it boosted yields by acquiring more higher-paying corporate customers. The bottom line was also boosted by continued cost cuts and an improved performance from Tigerair after Virgin Australia took full control of the low-cost carrier a little over a year ago. Chief Executive Officer John Borghetti says the airline has achieved a "significant turnaround" in the quarter, and is on track for an annual profit after three years in the red. The result is supporting the company's stock steady in a weaker overall market. Virgin Australia shares were last down 0.5% at A$47.75, outperforming the benchmark S&P/ASX 200, which was down 1.3% and larger peer Qantas Airways (QAN.AU), down 1.6%. (rebecca.thurlow@wsj.com; @beckthurlow)

[Onion]

buy more at around $2.75

When the price dipped to $2.75 exactly 1 share traded hands -- and I got it. It is by far the most expensive AIR share I've got at $32.65 (including 29.90 brokerage)! :(

[stoploss]

When the price dipped to $2.75 exactly 1 share traded hands -- and I got it. It is by far the most expensive AIR share I've got at $32.65 (including 29.90 brokerage)! :(

Move the rest of the order up to market and you can average your brokerage cost down ....

[IAK]

When the price dipped to $2.75 exactly 1 share traded hands -- and I got it. It is by far the most expensive AIR share I've got at $32.65 (including 29.90 brokerage)! :(
Now we're talking! Lol

[couta1]

When the price dipped to $2.75 exactly 1 share traded hands -- and I got it. It is by far the most expensive AIR share I've got at $32.65 (including 29.90 brokerage)! :(
I saw that 1 share on the depth chart the other day and wondered who the lucky person was:cool:

[Jantar]

I saw that 1 share on the depth chart the other day and wondered who the lucky person was:cool:And think about the lucky person who sold that 1 share. How much did they profit by? :D

[Joshuatree]

When the price dipped to $2.75 exactly 1 share traded hands -- and I got it. It is by far the most expensive AIR share I've got at $32.65 (including 29.90 brokerage)! :(

So it was you that saved us:ohmy: ,Onion and looks like you bet Roger to it(hesitation:). I hope you win the share tipping comp and the $35 bottle I've donated.

[Snow Leopard]

So more new planes:

A quick look says an ATR72-600 is an ATR72-500 with a slight improvement in some aspects, but is otherwise the same, seating capacity included.

Using the spare cash while things are going great to continue to modernise the fleet and also expand it seems like a good strategy.

Wonder what will happen to those 11 500's?

Best Wishes
Paper Tiger

[Beagle]

I see the ATR500's are 14.5 years old as at 30 June 2015. Another fine example of AIR proactivity replacing its fleet and offering customers a modern efficient product. (Note the comment in the link below about good resale value of ATR's.)
Judging by the sort of whopping discount they got on the Dreamliner price compared to list price I'd imagine on an order of 15 ATR600's AIR would have paid nothing like the retail figure suggested.
I know the ATR600's are significantly more efficient on a seat mile basis than the Q300's assuming you can fill them (68 v 50 seats).

Edit: N.Z. Herald is reporting the new planes will begin arriving from late 2016 through to 2020 so it looks like a carefully planned gradual fleet expansion. Makes sense if they got a ripper price for the bulk order and I have every confidence in management that they did.

If you're REALLY BORED like I was early this evening then this is worth a read if you're an aviation geek and want to know more about the ATR-600 and how it compares to the Bombardier Q400
http://theflyingengineer.com/aircraft/proud-to-fly-a-turboprop-q400-vs-atr72/

[sb9]

Very pleasing announcement and further solidifies their earnings outlook given at ASM, onwards and updwards from here.

[Robomo]

Emirates have just announced their half-year profit - NZ$1.3 billion. This is 65% more than the same period last year.

This was achieved despite regional unrest, unfavourable $US exchange rate and increased competition and slightly reduced load factors (down to 78%). Total passesnger numbers and cargo both increased 10% from a year ago.

This result is similar to most of the worlds big airlines - all reporting record and increasing profits and more passengers flying.

So despite turmoil in some regions, more planes and more competition; more and more people are flying. My belief is that the cost of airfares is now just a minor part of people's total holiday or business expenses. Despite video conferencing, head to head meetings are still the preference.

[Biscuit]

This result is similar to most of the worlds big airlines - all reporting record and increasing profits and more passengers flying.


Call me an old cynic but all that good news has my fingers twitching towards the ripcord.

[Beagle]

Emirates have just announced their half-year profit - NZ$1.3 billion. This is 65% more than the same period last year.

This was achieved despite regional unrest, unfavourable $US exchange rate and increased competition and slightly reduced load factors (down to 78%). Total passesnger numbers and cargo both increased 10% from a year ago.

This result is similar to most of the worlds big airlines - all reporting record and increasing profits and more passengers flying.

So despite turmoil in some regions, more planes and more competition; more and more people are flying. My belief is that the cost of airfares is now just a minor part of people's total holiday or business expenses. Despite video conferencing, head to head meetings are still the preference.

Sums it up very nicely mate.


Call me an old cynic but all that good news has my fingers twitching towards the ripcord.

Plenty of short term traders have already availed themselves of a tidy profit so if you're don't believe in the long term tourism growth story, the quality of the airline or its management then maybe you should ?
I'm with Robomo. Travel is so cheap now...all the baby boomers have so much more time and money on their hands now the kids have left home and are getting out there and enjoying their freedom...so many young people have given up on owning a house and are doing the same.

[theace]

Two new international routes ....

http://www.stuff.co.nz/business/73789861/air-new-zealand-preparing-to-announce-two-new-international-routes

[Marilyn Munroe]

Two new international routes ....



Off the wall speculation; Cullen Airlines will fly to TPY and if the route proves extend to LHR.

Pluses; Gateway to Central America, avoids having to fly through LAX with the TSA touching your "junk", and hooks into Star Alliance mates United Airlines network.

Minuses; Rainy area with airport only ILS cat 1 equipt, and few business cultural and social ties with Panama.

Will you look forward to travelling on the cocaine express all the way to LHR on Cullen Airlines tin(or plastic) without encountering US Customs immigration or airport security?

Boop boop de do
Marilyn

[pierre]

[QUOTE=Marilyn Munroe;596569]Off the wall speculation; Cullen Airlines will fly to TPY and if the route proves extend to LHR.

Pluses; Gateway to Central America, avoids having to fly through LAX with the TSA touching your "junk", and hooks into Star Alliance mates United Airlines network.

Minuses; Rainy area with airport only ILS cat 1 equipt, and few business cultural and social ties with Panama.

Will you look forward to travelling on the cocaine express all the way to LHR on Cullen Airlines tin(or plastic) without encountering US Customs immigration or airport security?

Boop boop de do
Marilyn[/QUOTE

Presume you mean PTY - not TPY.

NZ Herald speculates that the first announcement could be Vietnam - presume that would be SGN or HAN.

[skid]

[QUOTE=Marilyn Munroe;596569]Off the wall speculation; Cullen Airlines will fly to TPY and if the route proves extend to LHR.

Pluses; Gateway to Central America, avoids having to fly through LAX with the TSA touching your "junk", and hooks into Star Alliance mates United Airlines network.

Minuses; Rainy area with airport only ILS cat 1 equipt, and few business cultural and social ties with Panama.

Will you look forward to travelling on the cocaine express all the way to LHR on Cullen Airlines tin(or plastic) without encountering US Customs immigration or airport security?

Boop boop de do
Marilyn[/QUOTE

Presume you mean PTY - not TPY.

NZ Herald speculates that the first announcement could be Vietnam - presume that would be SGN or HAN.

That would be awesome--more competition to SE Asia the better,I say

[mikeybycrikey]

Interesting article on Air NZ's new route into Buenos Aires

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11541576

[Biscuit]

Plenty of short term traders have already availed themselves of a tidy profit so if you're don't believe in the long term tourism growth story, the quality of the airline or its management then maybe you should ?
.

I guess, like you Roger, I can see plenty of upside here. I'm just perhaps more cautious of the downside. I'm still holding, but like I said, I've already taken enough profit to cover the bet.

[pierre]

Flew back from Raro with AIR a couple of nights ago. Chatted with a friendly and attentive member of the cabin crew.
He was very complimentary about the management of the airline. He thought it was great the company was trading very profitably and very appreciative that all employees received a bonus recently.

Most interesting was his comment that AIR recently introduced a computerised roster system that for the first time gives crew flexibility to change their assignments to suit their personal lives, provided they can find someone else to swap with them. He said that as a result of this initiative the amount of "sick" leave taken has plummeted.

Happy crew usually means happy customers. Happy customers usually means a more profitable business.

Another good move by Mr Luxon and his team.

[winner69]

Another good move by Mr Luxon and his team.

I'm getting blinded by the brightness of Luxon's halo - a halo we have seem to have created here

Hope the halo doesn't start to fade any day soon

[winner69]

Interesting insight into the dynamics of the Air NZ senior management team

Quote: Stephen Jones, Air New Zealand's chief strategy, networks and alliances officer, says it also took some persuasion to get his fellow executives to get the flights over the line.

"The internal business case was interesting," he says. "If you don't know much about Argentina you look at it as a high risk place, a volatile government and currency -- why would we even bother with it?"

There were doubters among the airline's eight-member executive who were worried about the risk.

"We had two holdouts so we just had to understand their concerns in a lot more depth and brought them back more evidence around those. Risk management would be particularly around the financial aspects -- how do you get your money?"

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11541576

[iceman]

Thanks for sharing that article Winner. I am looking forward to this new route starting as I will be a frequent user of it. Sadly I have to go over the week before AIR starts but will return with AIR in the new year. It will be interesting to watch the loads. Argentina is indeed a very difficult place to do business in. They currently have very stringent FX controls which makes it extremely difficult to convert pesos to foreign currencies. I trust AIR has done their homework well on this !
I am pleased to see for the first time from AIR, that they are eyeing traffic between SE Asia and South America. I have been saying since they announced this route that is where they will make or break it. The business I am in flies Chinese workers regularly between Argentina and China and it is cumbersome and expensive through Europe, which currently is the only real option. AIR will open up a new and possibly much better option but I am concerned that I think Chinese still need transit visas (not 100% sure) through NZ which needs to be sorted out for this to work. They don't need that traveling through Europe.

[skid]

Boy,its hard to put a rhyme or reason to why airline stocks rise and fall--Just been looking at the chart and this last fall and small gain you could cut out and put on the last June chart and it would fit perfectly --It then dropped to $2.40 (MA was different though)so I went back and read the posts around that time -(June-July)--There was really no apparent catalyst for the drop--about the only thing I noticed was that most airlines also dropped--everything else seemed pretty identical--management etc.--most were at a loss to say why it was happening.
Its of course bounced back now,but i can only take from this that nothing is certain with airlines and that ,as some have suggested they are cyclical in nature.
It was suggested that it was a healthy correction.
All up from here is not a given any more than get ready for the drop--Or did I miss something more,that was different back then?
One thing for sure is that the $3 resistance is a hard one to crack--If your just looking at the odds.
The only statement Im making is that it was hard to make sense of that June drop(did management expectations drop or the outlook for tourism growth?) or was it just the most fickle mistress of them all --sentiment

[Joshuatree]

There is an Argentine Working Holiday scheme arrangement with NZ which will be good for these flights.

[kizame]

Yes that will be why they are starting the route,the competition from Chile is nothing to right home about thats for sure.

[pierre]

I'm getting blinded by the brightness of Luxon's halo - a halo we have seem to have created here

Hope the halo doesn't start to fade any day soon

Luxon has created his own halo. We're just admiring its glow and contemplating the benefits that will flow to AIR's owners i.e. all New Zealanders whether they hold shares directly or not.

[Beagle]

Interesting insight into the dynamics of the Air NZ senior management team

Quote: Stephen Jones, Air New Zealand's chief strategy, networks and alliances officer, says it also took some persuasion to get his fellow executives to get the flights over the line.

"The internal business case was interesting," he says. "If you don't know much about Argentina you look at it as a high risk place, a volatile government and currency -- why would we even bother with it?"

There were doubters among the airline's eight-member executive who were worried about the risk.

"We had two holdouts so we just had to understand their concerns in a lot more depth and brought them back more evidence around those. Risk management would be particularly around the financial aspects -- how do you get your money?"

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11541576

Fascinating insight into new route expansion. Perhaps they're putting all their management methodology on new route selection out there to calm investors nerves in regard to the pending announcement of two further new routes before Buenos Aires and Houston are even proven to be profitable ! I must admit that even I was thinking I might need a nice calming herbal tea after reading they're looking at even more route expansion next year. That said, they do seem extremly confident that the new routes commencing next month will be profitable from day 1.

Were now seeing quite a stark contrast between the approach of Qantas regarding their major drive for cost reduction with minimal expansion and AIR's approach of containing cost within the bounds of the low inflation rate but expansion, expansion and more expansion. Next couple of years will be very interesting.

While its fair to say the SP race between these two airlines looks well and truly lop sided at present the long term picture could be more interesting. When you start expanding at a great rate of knots, (fastest expansion in AIR's 75 year history according to our enterprising leader) using efficient aircraft you get economies of scale in terms of the overall business coming to the fore pretty quickly. Interesting that AIR's EPS was 29.1 cps last year and Qantas was 25 cps. Further, AIR seemed significantly more bullish in their outlook at their annual meeting than the text of Qan's annual meeting suggested they were.


Most interesting was his comment that AIR recently introduced a computerised roster system that for the first time gives crew flexibility to change their assignments to suit their personal lives, provided they can find someone else to swap with them. He said that as a result of this initiative the amount of "sick" leave taken has plummeted.

Things like that make a huge difference to people's working lives and will serve to enhance AIR's already outstanding reputation as one of N.Z's leading employers.

[biker]

New routes next month, "profitable" from day one? I very much doubt that will be the case in the sense of profit as we shareholders would like it to be.
AIR will account these new routes in such a way that they may appear "profitable" but the enormous cost of setting up, introductory fares, people on the ground etc esp Buneo Aires as indicated in the article, in reality means that true profitability will take some time.
Luxon may be good but a magician he isn't.
The market still isn't convinced by the hype. Airlines cyclical? Luxon's mantra and fervent hope is that they used to be but " this time it's different, I've got this "
Well maestro, I hope your right.

[Beagle]

15 mainly local people on the ground in South America doesn't sound like a lot but I'll grant you that there were material establishment costs with these new routes and like any new venture with any other company some of these capex costs will be amortised and others expensed in accordance with generally accepted accounting principles and international financial reporting standards. I think its unfortunate that you imply that AIR will creatively account for those costs.

I think you will be very surprised how quickly AIR increase their frequency to South America and remember when they announce it you read it from me first...maybe a little birdie involved in the establishment of that route told me something very interesting just before the annual meeting ;) (that was before you arrived Brend)

[winner69]

So we agree Argentina a great initiative - and will make real money

Back to how the executive team works then. There were 2 holdouts the paper says but they eventually came around to the accepting the idea. Hmm - those 2 have cost us a lot. Can't really reprimand them because obviously this executive team works democratically towards unanimous decisions.

One would need to speculate that maybe Luxon himself was one of these 'holdouts', was he not too keen on the idea?

Group think eventually prevailed and go ahead it is, even if not as soon as Jones wanted

[tony64peter]

Most interesting was his comment that AIR recently introduced a computerised roster system that for the first time gives crew flexibility to change their assignments to suit their personal lives, provided they can find someone else to swap with them. He said that as a result of this initiative the amount of "sick" leave taken has plummeted.

Happy crew usually means happy customers. Happy customers usually means a more profitable business.

.
You must have been talking to a very junior crew member I'm told, probably midhaul on the A320 or 767. The rostering swap system has been around for years. The cabin crew only get one bid a year to select a duty and have very little control of their lifestyle, ie short trips as opposed to long trips. Osaka is probably one of the future destinations with Japanese economy improving.

[brend]

I'm tipping Vietnam and Thailand.

Thailand would be under a codeshare arrangement with Thai airways taking it to daily service.

[pierre]

You must have been talking to a very junior crew member I'm told, probably midhaul on the A320 or 767. The rostering swap system has been around for years. The cabin crew only get one bid a year to select a duty and have very little control of their lifestyle, ie short trips as opposed to long trips. Osaka is probably one of the future destinations with Japanese economy improving.

I was talking to a reasonably senior guy in the PE cabin on a 777-200. He indicated that there was now a great deal more flexibility for cabin crew and that it was a relatively recent change. The point being that fewer crew members were calling in "sick" for flights that they didn't want to take, with a consequential saving on labour costs for the airline.

No drama though - just one person's opinion - but one that seemed to indicate, along with his other comments, that positive changes were taking place inside the business.

[skid]

I'm tipping Vietnam and Thailand.

Thailand would be under a codeshare arrangement with Thai airways taking it to daily service.

That would be great for me ,but from having flown with both--If I bought a ticket with Thai and ended up on an Air NZ plane I would not be happy unless they have really upped their game in terms of comfort and service(compared to Thai)

I would think they would leave it at Bangkok,rather than incl Viet Nam which is very accessible with a multitude of other airlines incl. partners.

[Beagle]

Pretty sure skid they'll be using one of their new 787-9's on the new route and it'll have a flying time of less than 11 hours that way they can ratchet the utilisation of the new puppy up close to 22 hours a day and really make it earn its keep. According to feedback on www.seatguru.com they're being well received by the majority of pax.

[skid]

That would make it to BKK ok,although a 1 hr turnaround ,while possible is cutting it close--Im assuming you mentioned the new 787s in terms of better comfort.
Theres lots of competition to SE Asia but lots of people go as well (one of my favorite places)--Its become a good family destination-(not like the old days of only druggies and sex tourism)
Viet Nam now has a 2 week free Visa (as well as Indonesia)if they do end up going there.
I think these countries are starting to see the benefits Thailand gets with its 30 visa waiver (free) in terms of attracting tourism. Hopefully the rest will follow (Cambodia-Laos)

[Joshuatree]

Int Global Airline Stock Price Valuation Matrix at Craigs(On The Move) for those with access.. Re 23 airlines compared
AIR comes 7th re Implied return. Best D/Y by FAR. Craigs target price unchanged @ $3.40.

[brend]

Int Global Airline Stock Price Valuation Matrix at Craigs(On The Move) for those with access.. Re 23 airlines compared
AIR comes 7th re Implied return. Best D/Y by FAR. Craigs target price unchanged @ $3.40.

Who was 1st? Qantas was?

[iceman]

Competition heating up http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11542964

[Zaphod]

Competition heating up http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11542964

That's been certainly well signaled (unofficially) for some time now, so comes as no great surprise.

It will be interesting to see whether this announcement covers direct flights to/from AKL or just increase connections via Australia I suspect it will be the former, with AKL-LAX as the first sector. AKL-SFO is likely to also see competition in the future.

[Snow Leopard]

and so the cycle continues to turn...

Best Wishes
Paper Tiger

PS Happy Deepavali

[sb9]

That's been certainly well signaled (unofficially) for some time now, so comes as no great surprise.

It will be interesting to see whether this announcement covers direct flights to/from AKL or just increase connections via Australia I suspect it will be the former, with AKL-LAX as the first sector. AKL-SFO is likely to also see competition in the future.

Yes, we all knew about this a while ago nothing new.

[winner69]

The Wheels of Commerce ........and so the cycle continues to turn...

Best Wishes
Paper Tiger

PS Happy Deepavali

esp when competitors see another getting an easy ride and making excessive profits

[iceman]

Yes, we all knew about this a while ago nothing new.

Route selection will be of great interest tomorrow.

[Joshuatree]

Who was 1st? Qantas was?

Cebu Air 81%
Air Berlin 52%
China
eastern airlines 41%
Virgin Aust 35%
Quantas 6th 24%
Lowest
Korean Air -11%
Singapore and Air france -3%

[sb9]

Route selection will be of great interest tomorrow.

Agreed, shall wait and see.

[theace]

"Bit" more detail .... http://www.ausbt.com.au/qantas-american-airlines-to-launch-sydney-new-zealand-los-angeles-flights

[winner69]

Execs get paid zillions if AIR share price beats the Bloomberg World Airlines Index


Anybody know where to find this?

[Snow Leopard]

esp when competitors see another getting an easy ride and making excessive profits

That is not fair winner69, the airline is there to make as much money as possible for its senior management, allow them to buy shiny new airplanes and give some of the leftovers to shareholders.

Best Wishes
Paper Tiger

[theace]

That's a hugh drop in SP

[Beagle]

Circa $1.5m base salary doesn't seem unreasonable considering C.L.'s performance and he's leading a team of 11,000 people and the company has sales of over $5b. Compare that to what some CEO's of much smaller companies are paid especially some of the bankers.
The new performance share rights seem less generous than the previously overly generous options arrangements that senior management have been recently cashing in.

AA thing has been known for some time and already been factored into broker models. Consensus valuation is $3.03.
Kiwi's are a parochial bunch and while there will be an initial hiss and roar by AA and QAN and heavily discounted tickets which AIR will match but over time flight prices will return to normal level's.
No biggie really...AIR expanding into other routes and experiencing strong demand on them. AA will bring more customers down under and grow the market overall and boost tourism's growth rate even higher than 9% per annum. I am wondering how AIR will meet the extra domestic demand for more travel throughout N.Z ?...they might be one or two A320's short...travel Auckland to Queenstown is really going to grow very strongly IMO.

Edit, just saw it dropped at one point to $2.65. Quite an overreaction IMO.

[sb9]

That's a hugh drop in SP

Yeah, those nervous nellies are back same as at the time of Jetstar's domestic announcement few months back.

[couta1]

Yeah, those nervous nellies are back same as at the time of Jetstar's domestic announcement few months back.
Just rats and mice sellers, have a look at the VWAP, that tells a better story. Disc-Did top up some more at $2.77 (Should have waited another 10 minutes aye)

[Beagle]

Just rats and mice sellers, have a look at the VWAP, that tells a better story. Disc-Did top up some more at $2.77 (Should have waited another 10 minutes aye)

You're a VERY keen man. Thing is though mate, the big trades of 2m shares and another 600K shares happened at 12.30 and a bit later before the Herald article at 2.00 p.m. was published. Insider trading from someone knowing the article was coming from the Herald ?

Qan down 9 cents last time I looked so best to keep in mind its a soft day for the market overall with a very weak lead from the U.S. overnight.

[Teeps]

I topped up at $2.75... ridiculous day... so many people quick to push the sell button as soon as something appears in the press. Air NZ is a fundamentally great business, very profitable, pays great divvys and has consistently performed the last few years. I am a fan of the business and don't yet understand why the SP hasn't climbed over the $3 barrier.... This isn't a cyclical stock. AA/QF were always going to compete again and was well publicized months ago... knee jerk reaction anyone??

[mikeybycrikey]

Thing is though mate, the big trades of 2m shares and another 600K shares happened at 12.30 and a bit later before the Herald article at 2.00 p.m. was published. Insider trading from someone knowing the article was coming from the Herald ?

You said a few posts ago that this AA/Qantas thing has been known for some time. And here you're accusing someone of insider trading for trades made on the same day as a newspaper article was published.

Surely you can't have it both ways! This news is either public, or it's not.

[Snow Leopard]

I topped up at $2.75... ridiculous day... so many people quick to push the sell button as soon as something appears in the press. Air NZ is a fundamentally great business, very profitable, pays great divvys and has consistently performed the last few years. I am a fan of the business and don't yet understand why the SP hasn't climbed over the $3 barrier.... This isn't a cyclical stock. AA/QF were always going to compete again and was well publicized months ago... knee jerk reaction anyone??

Yes at $2.75 AIR is under-priced and today the price as fallen for whatever combinations of reasons it has fallen.

Yes this and further competition and many other factors are priced into the valuation range for AIR which is centered around $3.03. (A little note here if you look at enough airline valuations you will spot that AIR is regarded as one of the better ones).

But never delude yourself that this is not a cyclical stock - most stocks are to a lesser or greater degree cyclical - and airlines are not at the lesser end.

IF AIR is not cyclical then I am not a Tiger

Best Wishes
Paper Tiger

[skid]

I wouldnt be so quick to claim its under priced.
At one point I went through posts in June,trying to figure how the SP could drop like that--There was really not much clue as to why from posts.
But now the article is alluding to the fact that AA was investigating flying here in June and thats what affected the SP--now United is returning also.
This may not be great news for share holders -but the public will be happy as larry.
Thats why they say ''cyclical''
Of course its not the end of the world--AIR is well run and will survive,no problem--but it will take its toll on filling seats and IMO the drop in SP is justified. There was an overreaction (as always) but where its settled is not catastrophic--just a readjustment to added competition.
It went to 2.40 in June so logically it could revisit that point so I think its logical to be prepared to ride that out if your on board for the long haul--and if it doesnt ,so much the better.
If there are some good reasons why this cant happen again,this would be a good time to discuss them,and perhaps make a plan ,just in case.---Interesting how everyone seems to be interested in our little slice of paradise these days--guess we cant blame them.

[Onion]

When the price dipped to $2.75 exactly 1 share traded hands -- and I got it. It is by far the most expensive AIR share I've got at $32.65 (including 29.90 brokerage)! :(

And today I mopped up the rest of my order. Patience is a virtue sometimes.:t_up:

[couta1]

Skid you really must take another holiday soon(Flying Air of course) You seem to be the thread roaming sad sack of late. The share price dropped in June upon the announcement that 4 Jetstar relics would fly on cherry picked regional routes. Any perceived threat to profits via competition will cause a share price to drop as nervous Nellie's sell out, of course Air is ramping up its routes as well with its modern fleet so this will offset any losses to a certain degree. PS-United is a partner with Air not another competitive threat.

[Hoop]

I topped up at $2.75... ridiculous day... so many people quick to push the sell button as soon as something appears in the press. Air NZ is a fundamentally great business, very profitable, pays great divvys and has consistently performed the last few years. I am a fan of the business and don't yet understand why the SP hasn't climbed over the $3 barrier.... This isn't a cyclical stock. AA/QF were always going to compete again and was well publicized months ago... knee jerk reaction anyone??

Teeps...AIR is a cyclical stock!!!!....why am I repeating this statement.:mad ;:

If you doubt me..do some research...I've copied Investopedia's definition for you below...they don't mention emerging competitor problems which is a sign of a maturing cycle..


Cyclical Stock Cyclical stocks rise and fall with the business cycle (http://www.investopedia.com/video/play/business-cycle/). This seeming predictability in the movement of these stock's prices leads some investors to try to time the market by buying these stocks at the low point in the business cycle (http://www.investopedia.com/terms/b/businesscycle.asp) and selling them at the high point. Examples of companies whose stocks are cyclical include car manufacturers, airlines, furniture retailers, clothing stores, hotels and restaurants. When the economy is doing well, people can afford to buy new cars (http://www.investopedia.com/articles/pf/09/best-price-on-a-new-car.asp), upgrade (http://www.investopedia.com/terms/u/upgrade.asp) their home furnishings, go shopping and travel. When the economy is doing poorly, these discretionary expenses are some of the first things consumers will cut. If a recession (http://www.investopedia.com/terms/r/recession.asp) is bad enough, cyclical stocks can become completely worthless as companies go out of business.


For example, the airline industry is a fairly cyclical industry (http://www.investopedia.com/video/play/cyclical-stock/); in good economic times, people have more disposable income (http://www.investopedia.com/terms/d/disposableincome.asp) and, therefore, they are more willing to take vacations and make use of air travel.
Conversely, during bad economic times, people are much more cautious about spending. As a result, they tend to take more conservative vacations closer to home (if they go at all) and avoid expensive air travel.


Read more: Cyclical Industry Definition | Investopedia (http://www.investopedia.com/terms/c/cyclical_industry.asp#ixzz3r4RrOTXn) http://www.investopedia.com/terms/c/cyclical_industry.asp#ixzz3r4RrOTXn
Follow us: Investopedia on Facebook (http://ec.tynt.com/b/rf?id=arwjQmCEqr4l6Cadbi-bnq&u=Investopedia)


Read more: Cyclical Stock Definition | Investopedia (http://www.investopedia.com/terms/c/cyclicalstock.asp#ixzz3r4JC1c4n) http://www.investopedia.com/terms/c/cyclicalstock.asp#ixzz3r4JC1c4n
Follow us: Investopedia on Facebook
(http://ec.tynt.com/b/rf?id=arwjQmCEqr4l6Cadbi-bnq&u=Investopedia)

DISC:...Oh!!..by the way this "nervous Nellie" sold out today (2.74) after holding the stock for a month ..made a small 4% profit..disappointing result for me...but my discipline said sell and it is a compulsory action when dealing with cyclical stocks....best of luck to the holders I hope the share price goes up






(http://ec.tynt.com/b/rf?id=arwjQmCEqr4l6Cadbi-bnq&u=Investopedia)

[winner69]

There be a BIG bounce pack tomorrow

[Beagle]

Well all this talk of cyclical stocks seems to imply to me that many people think we're at something of a boom situation in the economy which of course it 's quite clear we aren't. We have slowing economic growth, rising unemployment, dairy at its lowest ebb for over a decade e.t.c. so if everyone who's so sure that its cyclical is right, (which of course it is to some extent but ask people to actually define where we are in the economic cycle and you'll either draw a blank from many or get as many different answers from others as there are hours in the day), then that's fine because it appears to me we're nowhere anywhere near any kind of top in the economic cycle, in fact anything but !

Fundamentally the business is doing very well in these indifferent economic times and this announcement that was previously widely rumoured shouldn't really come as a shock to anyone.

[Hoop]

Well all this talk of cyclical stocks seems to imply to me that many people think we're at something of a boom situation in the economy which of course it 's quite clear we aren't. We have slowing economic growth, rising unemployment, dairy at its lowest ebb for over a decade e.t.c. so if everyone who's so sure that its cyclical is right, (which of course it is to some extent but ask people to actually define where we are in the economic cycle and you'll either draw a blank from many or get as many different answers from others as there are hours in the day), then that's fine because it appears to me we're nowhere anywhere near any kind of top in the economic cycle, in fact anything but !

Fundamentally the business is doing very well in these indifferent economic times and this announcement that was previously widely rumoured shouldn't really come as a shock to anyone.

"we're nowhere anywhere near any kind of top in the economic cycle" Really Roger?.. the business cycle in USA looks like its topped out...
Contrary to the media bull**** of the past.. USA (worlds biggest economic player) has had 6 years of business cycle boom...however the last 2 quarters has shown a slight earnings decline and there is recession talk surfacing..I guess that could be aimed at Janet and her wish to raise interest rates but you never know..
China (no2 economic player) was growing at well over 7% per year.. ..slowing but currently still strong at 6.7%

[Beagle]

Just maybe over the top of the business cycle in USA
Contrary to the media bull**** of the past.. USA (worlds biggest economic player) has had 6 years of business cycle boom...China (no2 economic player) was growing at +7% per year..

Yes those two economies are fairly easy to read, granted, but I was more referring to the Kiwi economy as more than 50% of AIR's sales are in N.Z. dollars to Kiwi's. That said general tourism to N.Z. is growing at 9% per annum...big growth from Australia and China despite the economic slump there, go figure ?. Could it be that people are simply travelling more now days and unless there's another major GFC, that will continue ? I respect your decision mate as you're primary belief is in technical analysis but I on the other hand will always at my core be a person who invests based on the fundamentals but am well aware that TA can also be a useful tool too. I hope you find something of value to invest in because having cash on call isn't a very rewarding experience. I don't know about you but as far as I am concerned well managed companies on attractive fundamentals are not easy to find in this market with the NZX50 at circa 6,000.

I am happy to ride this turbulence out with my seat belt firmly fastened :)

[gv1]

I am with hoop on this one...I had a feeling this morning to sell my very small holding with little profit but didn't do it then,@ 4.43, I saw the SP, decided to hit the button sold at 2.74. M watching this though.

[stoploss]

Teeps...AIR is a cyclical stock!!!!....why am I repeating this statement.:mad ;:

If you doubt me..do some research...I've copied Investopedia's definition for you below...they don't mention emerging competitor problems which is a sign of a maturing cycle..


Cyclical Stock

Cyclical stocks rise and fall with the business cycle (http://www.investopedia.com/video/play/business-cycle/). This seeming predictability in the movement of these stock's prices leads some investors to try to time the market by buying these stocks at the low point in the business cycle (http://www.investopedia.com/terms/b/businesscycle.asp) and selling them at the high point. Examples of companies whose stocks are cyclical include car manufacturers, airlines, furniture retailers, clothing stores, hotels and restaurants. When the economy is doing well, people can afford to buy new cars (http://www.investopedia.com/articles/pf/09/best-price-on-a-new-car.asp), upgrade (http://www.investopedia.com/terms/u/upgrade.asp) their home furnishings, go shopping and travel. When the economy is doing poorly, these discretionary expenses are some of the first things consumers will cut. If a recession (http://www.investopedia.com/terms/r/recession.asp) is bad enough, cyclical stocks can become completely worthless as companies go out of business.


For example, the airline industry is a fairly cyclical industry (http://www.investopedia.com/video/play/cyclical-stock/); in good economic times, people have more disposable income (http://www.investopedia.com/terms/d/disposableincome.asp) and, therefore, they are more willing to take vacations and make use of air travel.
Conversely, during bad economic times, people are much more cautious about spending. As a result, they tend to take more conservative vacations closer to home (if they go at all) and avoid expensive air travel.


Read more: Cyclical Industry Definition | Investopedia (http://www.investopedia.com/terms/c/cyclical_industry.asp#ixzz3r4RrOTXn) http://www.investopedia.com/terms/c/cyclical_industry.asp#ixzz3r4RrOTXn
Follow us: Investopedia on Facebook (http://ec.tynt.com/b/rf?id=arwjQmCEqr4l6Cadbi-bnq&u=Investopedia)


Read more: Cyclical Stock Definition | Investopedia (http://www.investopedia.com/terms/c/cyclicalstock.asp#ixzz3r4JC1c4n) http://www.investopedia.com/terms/c/cyclicalstock.asp#ixzz3r4JC1c4n
Follow us: Investopedia on Facebook
(http://ec.tynt.com/b/rf?id=arwjQmCEqr4l6Cadbi-bnq&u=Investopedia)

DISC:...Oh!!..by the way this "nervous Nellie" sold out today (2.74) after holding the stock for a month ..made a small 4% profit..disappointing result for me...but my discipline said sell and it is a compulsory action when dealing with cyclical stocks....best of luck to the holders I hope the share price goes up






(http://ec.tynt.com/b/rf?id=arwjQmCEqr4l6Cadbi-bnq&u=Investopedia)



May well be cyclical , however the TREND is for increasing tourism which AIR NZ will win big on . The local market is bread and butter , inbound tourism the cream on top .
http://www.stuff.co.nz/business/industries/71679775/Tourism-set-to-overtake-dairy-as-our-top-export

[Hoop]

More than 50% of AIR's sales are in N.Z. dollars to Kiwi's...and general tourism to N.Z. is growing at 9% per annum...big growth from Australia despite the economic slump there, go figure ?. Could it be that people are simply travelling more now days and unless there's another major GFC, that will continue ? I respect your decision mate as you're primary belief is in technical analysis but I on the other hand will always at my core be a person who invests based on the fundamentals but am well aware that TA can also be a useful tool too. I hope you find something of value to invest in because having cash on call isn't very rewarding.

Cash is king Roger...
It was a toss up whether to take my opportunity with Pushpay or AIR ..Years of experience has told me to stay out of cyclicals when the bull market becomes ancient...but I back the wrong horse and bought AIR ..I got sucked in with the AIR hype...Should have listened to my own concerns and remembered Peter Lynch philosophy of keeping away from cyclicals when their PE gets too low..

Now Pushpay's price is another +16% higher and I only realised +4% with AIR ..Using TA Discipline a +4% per month is lousy underachievement...

Sour grapes by me Roger...Yes I'm afraid so:p..I'm in this Sharemarket business for a living...Sharemarket investing efficiency is a must for me... when you are cashed up you have huge potential to take very lucrative shorter term opportunities....I've just wasted a month fiddling around making 4% with AIR

[iceman]

"we're nowhere anywhere near any kind of top in the economic cycle" Really Roger?.. the business cycle in USA looks like its topped out...
Contrary to the media bull**** of the past.. USA (worlds biggest economic player) has had 6 years of business cycle boom...however the last 2 quarters has shown a slight earnings decline and there is recession talk surfacing..I guess that could be aimed at Janet and her wish to raise interest rates but you never know..
China (no2 economic player) was growing at well over 7% per year.. ..slowing but currently still strong at 6.7%

Hoop. There are other "cycles" around. I invested heavily in one country 2-4 years ago as my friends on ST know. SO far it has returned 228% on average in 3 years. And we ain't stopping. All I'm saying there are many ways to skin a cat.

[Hoop]

May well be cyclical , however the TREND is for increasing tourism which AIR NZ will win big on . The local market is bread and butter , inbound tourism the cream on top .
http://www.stuff.co.nz/business/industries/71679775/Tourism-set-to-overtake-dairy-as-our-top-export

you forgot the competition trend is rising too...It becomes very expensive defending your local patch against those bigger than you

[Hoop]

Hoop. There are other "cycles" around. I invested heavily in one country 2-4 years ago as my friends on ST know. SO far it has returned 228% on average in 3 years. And we ain't stopping. All I'm saying there are many ways to skin a cat.
Many stocks are cyclicals..and they are all terrific performers during good economic times as we including you Iceman have enjoyed for many years now...Many of my best investments have been cyclicals initially bought during economic bad times...I can't recall ever having a great performing cyclical when bought during the height of boom times..I have been skinned though buying in at the boom time

The tricky part is that they are the worst performers in bad times and can suck away all your gains and more..they rise quick and fall just as quick...their cycles are characterised by large oscillations (volatile)..Unfortunately cyclicals suck the investor in as they still produce good forward fundamentals when they quickly drop and many investors fail to get out thinking that the price drop is unfounded..Hence Peter Lynch's warning to be cautious about cyclicals with very low PE values...

All I'm trying to do on ST at this moment Iceman and Roger is to generate a discussion (which hardly anyone does with this subject of dealing with cyclical behaviour) and to make people aware that Cyclicals are dangerous and so therefore be aware of cyclical behaviour and their warning signs ...This way I hope people can do their own research and learn to see those warning signs,..Most often those warning signs are seen by the lesser experienced investors as fundamental buy signals fueled by supposed "cheap valued" share.

[winner69]

If interested in economic cycles and share markets here are some good chars (US but concepts apply here as well)

http://www.aheadofthecurve-thebook.com/04-01.html


The book Ahead of the Curve is one of my bibles.

[winner69]

There be a BIG bounce pack tomorrow

How BIG will the bounce be I wonder

[Biscuit]

Many stocks are cyclicals..and they are all terrific performers during good economic times as we including you Iceman have enjoyed for many years now...Many of my best investments have been cyclicals initially bought during economic bad times...I can't recall ever having a great performing cyclical when bought during the height of boom times..I have been skinned though buying in at the boom time

The tricky part is that they are the worst performers in bad times and can suck away all your gains and more..they rise quick and fall just as quick...their cycles are characterised by large oscillations (volatile)..Unfortunately cyclicals suck the investor in as they still produce good forward fundamentals when they quickly drop and many investors fail to get out thinking that the price drop is unfounded..Hence Peter Lynch's warning to be cautious about cyclicals with very low PE values...

All I'm trying to do on ST at this moment Iceman and Roger is to generate a discussion (which hardly anyone does with this subject of dealing with cyclical behaviour) and to make people aware that Cyclicals are dangerous and so therefore be aware of cyclical behaviour and their warning signs ...This way I hope people can do their own research and learn to see those warning signs,..Most often those warning signs are seen by the lesser experienced investors as fundamental buy signals fueled by supposed "cheap valued" share.

Good discussion - so no golden age for AIR then? I think that AIR has both cyclical and non-cyclical components in its business - just to complicate things, probably more so than most airlines?

[Onion]

How BIG will the bounce be I wonder

No evidence of BIG BOUNCE bids lining up before opening.

If not you can always use http://www.awesomebounce.co.nz/. (http://www.awesomebounce.co.nz/) - "Bringing affordable Bouncy castle fun to everyone !! "

[skid]

Skid you really must take another holiday soon(Flying Air of course) You seem to be the thread roaming sad sack of late. The share price dropped in June upon the announcement that 4 Jetstar relics would fly on cherry picked regional routes. Any perceived threat to profits via competition will cause a share price to drop as nervous Nellie's sell out, of course Air is ramping up its routes as well with its modern fleet so this will offset any losses to a certain degree. PS-United is a partner with Air not another competitive threat.

They are usually a bit expensive for me,for SE Asia.but that may change(that would be great) We have flown them to Vancouver ,so maybe that will cover your request-(with more competition prices may drop)

Im not saying it will necessarily drop to 2.40 but just be prepared for the possibility.

Heres what they say in the article(did you even read it?)

When American Airlines said in June it would investigate direct flights to New Zealand Air New Zealand's share price took a hammering, although it has recovered since. Air NZ is also facing increased competition on its popular Vancouver route, with Air Canada announcing flights from the Canadian city to Brisbane.

You seem to be allergic to anything that questions anything other than high fiveing,but I commend the fact that you have at least stated some reasons for your statement(point taken on United) but your other statement at the least,doesnt tally with the article.(and IMO the article make more sense)---just healthy debate --dont get all worked up.

[iceman]

Good discussion - so no golden age for AIR then? I think that AIR has both cyclical and non-cyclical components in its business - just to complicate things, probably more so than most airlines?

Totally agree Biscuit. Great discussion and very informative posts from Hoop as always.

[brend]

We've gone completely LA-LA! Hurry, we've got Los Angeles on sale from just $499 one way. (Grabaseat)

game on I guess....

[winner69]

Not bouncing is it?

Ominous

[iceman]

So daily direct services between LA-AKL from June 2016. This will provide tough competition from NZ, particularly as AIR has been benefiting from Australian business people flying via AKL to get direct flights to USA.

[skid]

Maybe just moderate tourism numbers would have been better --so the other competitors would not have decided to jump in.
It may just take a while for the market (sentiment) to get used to the new scenario.
Of course,AIR will keep on keeping on with good planes and management--they aint goin anywhere,but fluctuations in SP are just part of the game (It could offer opportunity for some to buy in--(doesnt seem like a yr ago already when they were 1.80) This is not a debate to advise everyone to go out and sell--but its easy to become frustrated when you are counting on $3 and things go differently(the almost monopoly on some routes is not the case anymore). Its a bit like oil--when it drops and the share market dives we all moan but the average Joe celebrates--same with cheaper air prices--They had a grabaseat special to Thailand so i checked--It was the ole price per each way and totaled $1600 RT (I flew $1100 last winter) so they might have to become a bit leaner on that route for those like me that go for price within reason (MAL) --(gettin a bit old for Jetstar though I must add)
With these new planes Im hopeing they can offer cheaper prices and still make plenty of dosh to keep both SH and average Joe happy!

[Snow Leopard]

Another Bad AIR Day.

I feel people are too easily frightened by Alan Joyce smiling (http://www.theage.com.au/business/aviation/qantas-american-airlines-partnership-poised-to-hurt-air-new-zealand-20151110-gkvtdp.html).

Best Wishes
Paper Tiger

Disc: No AIR

Interesting fact: Air is the Malaysian/Indonesian word for water.

[Tony Two Gloves]

Free fall! Weak hands being shaken out, IMO there was no way this was going to bounce today and still feel there is further downside before sanity prevails.

[winner69]

Free fall! Weak hands being shaken out, IMO there was no way this was going to bounce today and still feel there is further downside before sanity prevails.

Yep the rubber bouncy ball I envisioned was really a lead balloon

Might even get to the 250s today at this rate

[sb9]

I know its about sentiment and nervousness that's causing this drop. However we have to ask ourselves, is this announcement today worth a 20-30c drop in sp? Me thinks not, just another bad day at office.

[brend]

Yep the rubber bouncy ball I envisioned was really a lead balloon

Might even get to the 250s today at this rate

some large volume going through in the last hour.

[Kelvin]

Picked up some at 260, don't worry, we will see some good stuff come out of this airline in the next several months.

I reckon the two new routes they'll announce will be 1 Aussie route (Hobart/Canberra?), 1 Asian (could be a South East Asian one, or maybe Taipei or Seoul)

[winner69]

some large volume going through in the last hour.

Must be instos selling down a few or maybe just a few Craig's clients getting out because hey don't believe the $3.06 valuation

Just speculation

[thestg]

My stop-loss was hit, so I'm out. Will look for a it to hit around $2.40 (as seems to be where it has turned previously this year - June & Sept) before getting back in.

[blockhead]

With more International flights coming into NZ should we not see this as a positive for AIR, they are going to be flying around NZ in AIR planes I imagine, we should be thanking AA for dropping a whole lot of potential customers on our doorstep !

[Kelvin]

With more International flights coming into NZ should we not see this as a positive for AIR, they are going to be flying around NZ in AIR planes I imagine, we should be thanking AA for dropping a whole lot of potential customers on our doorstep !

Positive news for THL haha

[winner69]

Well, that trade done with. Let the first breach of the stop loss go and (fortunately) it recovered but a 2nd breach can't be ignored so out they went with a 10% plus profit in a few weeks.

New strategy as of yesterday morning: That $3 barrier appears to be real, irrespective of the wonderful fundamentals. It is a while since the good news has been known and it hasn't pushed the price beyond it - the market rules. If the fundamentals are so great then no doubt in a month or 2 something will drive the price to $3 - and if that happens a certainty to go way higher. So strategy was wait or the $3 breach and then buy and reap the rewards then.

Revised strategy as of today: Heck 265 is 'cheap' relative to 300 (13% gain possible) so another trade is on the cards. It all depends on the opening action today. Even if 300 is real resistance still a decent margin to be made and believing the hype it can'tgo much lower than current price. And of course I have a bit more to play with after taking profits.

Good stuff eh

[Biscuit]

Well, that trade done with. Let the first breach of the stop loss go and (fortunately) it recovered but a 2nd breach can't be ignored so out they went with a 10% plus profit in a few weeks.

New strategy as of yesterday morning: That $3 barrier appears to be real, irrespective of the wonderful fundamentals. It is a while since the good news has been known and it hasn't pushed the price beyond it - the market rules. If the fundamentals are so great then no doubt in a month or 2 something will drive the price to $3 - and if that happens a certainty to go way higher. So strategy was wait or the $3 breach and then buy and reap the rewards then.

Revised strategy as of today: Heck 265 is 'cheap' relative to 300 (13% gain possible) so another trade is on the cards. It all depends on the opening action today. Even if 300 is real resistance still a decent margin to be made and believing the hype it can'tgo much lower than current price. And of course I have a bit more to play with after taking profits.

Good stuff eh

So a winning strategy of nervous nellie combined with true believing? I am still in, will let this play out for a bit.

[skid]

Well, that trade done with. Let the first breach of the stop loss go and (fortunately) it recovered but a 2nd breach can't be ignored so out they went with a 10% plus profit in a few weeks.

New strategy as of yesterday morning: That $3 barrier appears to be real, irrespective of the wonderful fundamentals. It is a while since the good news has been known and it hasn't pushed the price beyond it - the market rules. If the fundamentals are so great then no doubt in a month or 2 something will drive the price to $3 - and if that happens a certainty to go way higher. So strategy was wait or the $3 breach and then buy and reap the rewards then.

Revised strategy as of today: Heck 265 is 'cheap' relative to 300 (13% gain possible) so another trade is on the cards. It all depends on the opening action today. Even if 300 is real resistance still a decent margin to be made and believing the hype it can'tgo much lower than current price. And of course I have a bit more to play with after taking profits.

Good stuff eh

Just a suggestion but perhaps a bit of reverse logic might be helpful in terms of fundamentals--Go back just a bit over a year ago when it was under $2 and have a close look at what has changed since then (not saying nothing has--just a basis for research)--more medium term -go back to June and research what has changed--how much has management changed--how much has stategy changed--How much has the potential market changed.
The third one needs to be looked at closely as like most businesses sales is the bottom line. How much bigger has the market(people flying)gotten as compared to the loss to other airlines(on long haul) and will the domestic market make up for this (assuming the numbers will increase by alot) Is there more money in long haul or domestic.
What % of customers go for the flying experience and what % for the price (if the latter is the vast majority then how much revenue would be lost matching prices)its gets complicated because it may be minimal if planes are full.
And then the other thing to consider other than fundamentals is market sentiment (thats a hard one as sometimes it bears no resemblance to logic)-but the SP did take a dive in June at the mention of this new competition and now it has come to pass.
It was also on the news last night ,mentioning the drop in SP.(will that spook or make it more attractive as a bargain)
I dont know the answers to many of these questions but I would think it would be helpful to know--Its to easy to say its undervalued or overvalued.
To my simple mind it appears that they had a pretty sweet deal before with their routes but now they will have to work harder for market share.
They can still be a great outfit and get a bit less of that market share so its not only about AIR as a company.Guess thats the free market.(some are probably miffed at the Gov. regulators for letting the others in-especially as the gov. owns a large chunk of AIR)but it was probably unavoidable.

There is one hellava spread (and big numbers)on the debt chart so could be an interesting day.

The above stuff is just an attempt to think outside the box for those who have been involved for a long time as its sometimes possible to be in the AIR bubble (not to be confused with a market bubble) We learn lots of things about the company,new planes,etc,and have seen the bounce,but in doing this it is possible to become just a bit cut off from how the general public engages with the airline.

Or today might be the bounce that continues business as usual......Its hard for me to imagine the SP will go back to where it was with the new situation--the real question is where it will settle as the new fair price.

Disc,-Ive intentionally left out the question marks as Ive found it unsettles which is not my intention.

[Beagle]

American airlines entry was widely speculated on after their announcement that they were looking into the route in June and brokers have already built this into their models with a consensus fair value of $3.03.

Brokers have also built into their models a big ramp up in oil prices for Fy17 and beyond which hasn't happened and isn't looking likely to happen at this stage.

I doubt brokers have built into their sales models the two new routes AIR is widely speculated to announce soon.

AIR is a well managed company with a very modern fuel efficient fleet. They have new routes to Housten and South America starting next month.

Broker models generally have the airline settling down to around 35 cps earnings in a so called normal year FY18. This is without any of the super profits of low oil and lack of competition on the LA route.

The 10 year average PE for AIR is about 10.5. People will have a wide range of theories about how they value AIR now but I will stick with my base case theory that its worth at least 10.5 times 35 cps = $3.67.

I'm not a trader and don't want to be seen as such so I'm in for the long haul on the above basis and note that its widely anticipated there will be a special dividend in FY16 so I expect a gross dividend yield of circa 12% average of the next few years, inclusive of special(s). I am happy to hold. http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/consensus/

It's quite possible that there may have been some mis-reporting / journalistic licence ? re the fare war regarding AIR dropping its fares to LA to $499. A one day special on Grabaseat does not constitute a general cutting of prices like what's being implied in some media reports. I just went on AIR's website to have a look at prices in June-August 2016, (which is around when AA will start flying so you'd think the prices would already be down if AIR had cut them like what's being reported), and the cheapest price I could find was $860 per person each way.

No question there will be a hiss and roar around the time of AA's entry but I predict airfares will quickly settle back to sustainable and highly profitable level's. AA are using 787-8's with only 220 something seats on board so they're obviously a generous pitch / width seat configuration and you can't fly aircraft with lightly loaded seat configuration at giveaway prices for long.

AIR currently constitutes 17.5% of my portfolio which is right at the upper end of what I'll normally go too. That said If the SP does anything further that's really dramatic I won't rule out topping up further and taking advantage of exasperated or tired shareholders / traders.

[skid]

Thanks Roger.
You know more about the internal workings of the airline than I.
Im just a bit miffed about whether the brokers knew and accepted that the new competition would definitely happen, and how they went about estimating how many sales (if any)would be lost to the other airlines.
By not knowing this,it seems it would be a hard job coming up with the 35cps.
I suppose this is a debate for the more short to medium term holders or those considering when to enter.
For a long term holder who is satisfied with the company,and confident of its long term goal,then agreed,no need to panic(If your thinking of topping up however it would be relevant to consider short term issues occurring outside the company itself,and its effect)
This appeared to be the situation Winner was wrestling with.
In short--what are the odds of another dip to 2.40 as has happened twice since June.

[sb9]

Agree with you there Roger, don't think the latest announcement has 20-30c impact on sp, its all bit overreaction in my opinion. In times of panic people tend to loose focus on other things like the new routes to be announced soon, new services to begin next month and purchase more flights for domestic routes. All this only further reiterates what they said at ASM just a little while ago. Just a shame that people of short term memories. By all means, competition is good but AIR has plans in place to combat that loss with other plans as mentioned.

[Beagle]

Agree with you there Roger, don't think the latest announcement has 20-30c impact on sp, its all bit overreaction in my opinion. In times of panic people tend to loose focus on other things like the new routes to be announced soon, new services to begin next month and purchase more flights for domestic routes. All this only further reiterates what they said at ASM just a little while ago. Just a shame that people of short term memories. By all means, competition is good but AIR has plans in place to combat that loss with other plans as mentioned.

Skid / Sb9 you make good points. As mentioned previously I get a little frustrated with broker forecast models. Qantas are subject to very similar fundamental value drivers as AIR and I think its a better researched stock that AIR with higher quality analysis, (about 14 brokers in Australia analysing this stock IIRC) They're subject to extra competition from a range of carriers, the same fuel dynamics, similar young fleet and are a commodity based economy just like we are and are flying in a not dissimilar airspace. They have unions and older fashioned labour practices e.t.c. Broker consensus is $4.46 IIRC based on discounted cash flow models which appear to involve quite different sets of assumptions about the airline going forward. (brief re-cap, their EPS was 25 cps last year, AIR's was 29.1 cps - outlook guidance at their ASM wasn't as strong as AIR's) This to me suggests that based on best known current financial information to each airline AIR is likely to also beat QAN's eps in FY16. Further, AIR are on record as being very optimistic about their long term outlook. AIR are building economies of scale into their operation which means more of their growth will translate into bottom line profits. The wide spread in consensus valuation of AIR $3.03 and QAN $4.46 when AIR have beaten and look likely to continue to beat QAN's eps doesn't make a lot of sense to me.

Its all very well for people to get concerned about the entry of AA into the LA - AKL route but are people forgetting that AIR started their Singapore service about 11 months ago and are shortly starting two new routes with a further two pending sometime in the next 12 months ? A lot of the current SP action is sentiment driven in my opinion.

Just by way of a completely random sample to back up what you and I have suggested sb9 about growing demand for domestic services, yesterday I was very fortunate to catch my flight to Napier...I got the very last park at the regular Auckland public carpark after spending 20 minutes circling the entire place looking for one. Fortunately experience has always taught me to allow a spare 15 minutes over and above my estimated time to get to the airport to cover contingencies and I had already checked in for this flight online..even so we only just managed to board the aircraft before they closed the flight. Middle of the week, middle of the day a random ATR flight and it was absolutely full not a single spare seat. Why are so many people travelling these days ?...could it be because its so cheap they think nothing of flicking around the country for a good day / weekend or whatever away ?

People seem to be forgetting that American Airlines will grow the size of the market overall, not steal all its pax off AIR and they also forget that AIR have cunning ways of using golden handcuffs to keep customers loyal, Airpoints being one, electronic advice of sales another, grabaseat another, and wait there's more, lots of people like to try and build their status points too and enjoy the Koru lounge.
But wait there's even more...lot's of Kiwi's are quite simply parochial when choosing which airline to fly and are by default more happy than not to pick their own national airline whether they're a shareholder or not.

Of the circa 300m American's maybe only 10% ? of them have even heard of N.Z. and far fewer have heard of AIr N.Z. but little ol N.Z. will get plenty of tourism exposure from this major airline and growth running at over 10% from that country at present, will undoubtably increase further IMO. I don't see any reason to panic or lose sleep.

I think the odds of another dip to $2.40 are slim but I have my chequebook open if it does :)

[Hoop]

How BIG will the bounce be I wonder

Not bouncing is it?

Ominous


Well, that trade done with. Let the first breach of the stop loss go and (fortunately) it recovered but a 2nd breach can't be ignored so out they went with a 10% plus profit in a few weeks.

$2.70 up 5c this morning..there's your bounce Winner:D

[skid]

First of all-congrates on the rise in SP and I am by no means discounting all the valuable info(esp Roger) but to discount the odds to slim of another fall to 2.40 we really need to know why it happened twice since June-then we can accept the odds as slim--just sayin

all the airlines involved have reported record profits(Id be surprised if AA and Quantas didnt have ''sweetners''as well---Having said all that -I hate airlines from the States and hate LAX(not that that is particularly important)

Basically this is just the final step in healthy competition from Quantas(they now have AA (worlds largest )for long haul and Jetstar for domestic----(whats funny is THL only went up 1c yesterday) But 2c today so far--maybe thats what we should be watching!

[Beagle]

Skid - AIR has updated the market that they expect profit to double this half since the last time they touched down to $2.40. In my view this advice was well ahead of the market consensus view and I think the fact that the SP went up strongly after that announcement at the annual meeting is supportive of my view.

I'm not saying it can't / won't go down to $2.40 again, but I am saying I think this is unlikely on the balance of probabilities based on current guidance, new routes and all the other things I've mentioned.

I have a lot of confidence in the management and directors and believe this is a very high calibre company...maybe that's why I don't get too concerned with short term price variations and am happy to be on board for the long haul.

[Hoop]

One competitive strategy for national airlines to protect their market share from large outside intruders is to create a low cost airline company..usually a loss making subsidiary to run head to head at the competition

Last time competition ate away at AIRs high margins they created Freedom Air..Will we see this Phoenix arise from the ashes again

[Teeps]

And here is Air New Zealand's response to yesterday's AKL-LAX news - new long haul route to be announced..

http://www.stuff.co.nz/travel/news/73954417/air-new-zealand-expected-to-announce-new-route

Chicago anyone? Place your bets....
Be interesting to see what the SP does in the next 48 hours...

[sb9]

Thanks Teeps, there we've it, GAME ON!!!

[Beagle]

One competitive strategy for national airlines to protect their market share from large outside intruders is to create a low cost airline company..usually a loss making subsidiary to run head to head at the competition

Last time competition ate away at AIRs high margins they created Freedom Air..Will we see this Phoenix arise from the ashes again

Singapore Airlines has Scoot, Qantas has Jetstar so I wouldn't rule it out as a possibility. Maybe they could keep some of the old 767-300's they're retiring next year, (which would have basically been depreciated down to almost nothing in their books), and use them. Saw a couple of them land at the airport the other day. Amazing what a lick of new paint does to an old plane.

So a major announcement of a new route tomorrow morning and at least one more in 2016...sounds good to me :)

[Teeps]

I've taken the opportunity to increase my holding in AIR with the weakness in price over recent days. To me, this stock has significant movements based on a couple of competitive announcements. Again, turbulence is part an parcel of the aviation game and thus we see a bit of a bumpy ride in the SP. I still have absolute faith in the fundamentals of this business given the investment in fleet, its people and innovation w.r.t new revenue channels. Given the information publicised at the recent AGM, AIR is in a very good position domestically and internationally which to me will translate into a record FY16 year. My pick is for the price to breach the $3 barrier at or around the half year results announcement, with a significnat uplift from FY15 expected and a likely special dividend due.

AIR has a smart strategy of not relying on any monopolistic route position in the modern world and thus I believe the drop in SP is completely overcooked. I don't think we will go as low as $2.40 any time soon - I personally agree with Roger that fair value is circa $3.50-3.75 for a top quality organisation with excellent leadership and a stellar recent track record.

I'm in this for the long haul, so to speak.

[Beagle]

I've taken the opportunity to increase my holding in AIR with the weakness in price over recent days. To me, this stock has significant movements based on a couple of competitive announcements. Again, turbulence is part an parcel of the aviation game and thus we see a bit of a bumpy ride in the SP. I still have absolute faith in the fundamentals of this business given the investment in fleet, its people and innovation w.r.t new revenue channels. Given the information publicised at the recent AGM, AIR is in a very good position domestically and internationally which to me will translate into a record FY16 year. My pick is for the price to breach the $3 barrier at or around the half year results announcement, with a significnat uplift from FY15 expected and a likely special dividend due.

AIR has a smart strategy of not relying on any monopolistic route position in the modern world and thus I believe the drop in SP is completely overcooked. I don't think we will go as low as $2.40 any time soon - I personally agree with Roger that fair value is circa $3.50-3.75 for a top quality organisation with excellent leadership and a stellar recent track record.

I'm in this for the long haul, so to speak.

Exactly...Good post mate and welcome to the forum.