AIR - Air NZ.

[Onion]

Sorry my point was that the US advisory doesn't differentiate between places now (with a WW alert) so according to the advisory the risk is the same everywhere.
Which as you say is wrong.

I see the point you were making.

Hopefully travellers will be able to differentiate -- and see NZ as an ideal, safer, place to travel to.

[winner69]

JT started a trend using the word abyss (and associated it with airbus).

Other references to abyss implies JT has read Peter 2-4

I hope that there are no intended hidden messages when he has used abyss on this thread

[skid]

Sorry my point was that the US advisory doesn't differentiate between places now (with a WW alert) so according to the advisory the risk is the same everywhere.
Which as you say is wrong.

I agree--it was over the top--as if they want the rest of the world to be playing their fear game,which is of course exactly what ISIS wants(the US is playing right into their hands,unless there is something serious up).....-but NZ is certainly safer than Europe or Africa atm--and AIRs fundamentals are strong (as long as sales keep up) but its worth noting that fundamentals depend on sales and sales can depend on lots of things.

I still think its worth noting that fear of terrorists can be something the powers to be can use to their advantage--the world is a very different place than pre 9/11 in terms of privacy and individual rights--the real question is do they want to protect or control.(wont harp on anymore about that)

Did we ever get a verdict on Dreamliner vs Airbus?

[Beagle]

https://en.wikipedia.org/wiki/Boeing_787_Dreamliner

https://en.wikipedia.org/wiki/Airbus_A380

There you go mate. You be the judge :)

[skid]

https://en.wikipedia.org/wiki/Boeing_787_Dreamliner

https://en.wikipedia.org/wiki/Airbus_A380

There you go mate. You be the judge :)

Thanks Roger--I have'nt had a chance to fly with either--which one do you think I should save up to buy?:)

[Beagle]

Thanks Roger--I have'nt had a chance to fly with either--which one do you think I should save up to buy?:)

Reminds me of the old cliché "Rent that which depreciates and own that which appreciates" :)
You could have a bob each way on a trip to London next winter. Fly on a deal that involves AIR N.Z. on their new Dreamliner to Singapore and on to London with Singapore Airlines on their A380.
You could stay for a few nights here http://www.marinabaysands.com/ on the way, someone has to suffer such harsh accommodation, might as well be you :)

[winner69]

Share price recovering well today

(Somebody has to keep the thread going - nothing for 14 hours)

[Beagle]

http://www.nzherald.co.nz/air-new-zealand/news/article.cfm?o_id=5&objectid=11551336

[winner69]

The halo shineth ever brighter

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11551941

[sb9]

The halo shineth ever brighter

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11551941

Listened to Mr Hosking talk to Mr Luxon this morning on radio, he's good to listen to isn't he Mr Luxon. I think we're in great company and even the CFO got the award.

And I think the Buenos Aires service starts on 1st Dec followed by Houston on 15th Dec.

[winner69]

Some commentators say the value of these awards are diminished somewhat because 2 of the leading judges have been deeply involved in so many scandals (south Canterbury finance etc) that they aren't really the right people to judge the best in class.

Never mind gives 1000 people a chance to dress up and have fun while recognising the good work of their peers

[percy]

Listened to Mr Hosking talk to Mr Luxon this morning on radio, he's good to listen to isn't he Mr Luxon. I think we're in great company and even the CFO got the award.

And I think the Buenos Aires service starts on 1st Dec followed by Houston on 15th Dec.

Luxon certainly has been the "stand out" CEO this year.
He deserves the Deloitte Top 200.CEO of the year.

[Beagle]

Listened to Mr Hosking talk to Mr Luxon this morning on radio, he's good to listen to isn't he Mr Luxon. I think we're in great company and even the CFO got the award.

And I think the Buenos Aires service starts on 1st Dec followed by Houston on 15th Dec.

Yes mate it is a superbly managed and governed company. There are many other fine leaders out there but to be honest I would have been surprised if C.L. hadn't taken out the award this year. I spoke with him after the 2014 ASM meeting and he really impressed me with his highly articulate answers and engaging approach. In my opinion he's doing a superb job and I think we are extremely fortunate to have him leading our company. He's at a good age too and i hope he stay's on for many years. Also nice to see Rob McDonald get the CFO award. Tony Carter also a real gentleman and a superb director.
Top Calibre team here folks, with arguably amongst the very best credentials in N.Z. and the company is on a record ever low (for AIR), FY16 PE of less than 5 according to Craigs who have it on their conviction BUY list with a target price of $3.40. Happy to hold long term and not worried about current slight weakness in SP and competition and expecting jumbo sized fully imputed dividends in 2016.

[winner69]

Good article

What Air NZ up to is known in the inner circles as fungibly pontificating inexpensive "outside the box" thinking


http://www.stuff.co.nz/business/better-business/74533171/air-new-zealands-innovation-inspired-by-silicon-valley-disney-and-four-seasons

No world calamities, full moon has passed and we are ready for the annual Santa Rally on the market .......... AIR at 3 bucks here we come

[Balance]

https://www.nzx.com/companies/AIR/announcements/274308

Means that Air NZ still has considerable upside from the fuel price if oil price continues at current levels?

[Beagle]

Yes it does Balance. With the busy summer period just ahead, booming growth in tourism and two new international routes together with record low fuel prices both hedged and unhedged, the cash register's will be ringing like crazy this summer especially with six of those fancy new fuel sipping Dreamliners in operation :) $3 is just around the corner !

[vin]

Flew to Fiji in the 787 for work, was incredible. Loads of leg room, fantastic service. The onboard entertainment system was exceptional, very impressed.

[iceman]

A great little innovation from AIR. http://www.stuff.co.nz/business/better-business/74533171/air-new-zealands-innovation-inspired-by-silicon-valley-disney-and-four-seasons
While not a huge selling point (but many parents sending Unaccompanied Minors will love it), it shows the attitude and outside the box thinking of management.

I love that little message telling my double shot long black is ready as soon as I walk into the lounges. The bag tag idea when fully developed will also be great.

AIR definitely are leaders in innovation and service and a great airline to travel with.

[Beagle]

MSCI index rebalancing at close folks. Anyone who bagged some shares on "flash" index rebalancing sale at $2.72 did very well IMO. Normal service should return tomorrow. Expect some more noise from Jetstar about their new domestic routes tomorrow.

[winner69]

Ok, another go

No world calamities, full moon has passed and we are ready for the annual Santa Rally on the market .......... AIR at 3 bucks here we come, esp as the MCSI rebalancing is behind us

[Beagle]

Ok, another go

No world calamities, full moon has passed and we are ready for the annual Santa Rally on the market .......... AIR at 3 bucks here we come, esp as the MCSI rebalancing is behind us

Yes and AIR have invested in the largest solar array in N.Z. at their Auckland base and are moving towards electric cars wherever possible so they're doing their bit for climate change and that should keep everyone happy and be good for $3 soon.

[Hoop]

Yes and AIR have invested in the largest solar array in N.Z. at their Auckland base and are moving towards electric cars wherever possible so they're doing their bit for climate change and that should keep everyone happy and be good for $3 soon.

Roger..Aviation industries do this to create a smoke screen..Aviation industry is one one of the grubbiest polluters, up there with iron and aluminum producing industries.. Aviation Companies do not want to get caught in the cross-hairs with the global warming brigade....The public are very unaware of the climate impact planes has on the Planet..At the moment their attention is focused elsewhere...

Quote from an old research paper (http://pubs.acs.org/doi/full/10.1021/es9039693)...".....Per passenger-hour traveled however, aviations climate impact is a factor 6 to 47 higher than the impact from car travel......"

NASA (2004) documented (http://www.nasa.gov/centers/langley/news/releases/2004/04-140.html) how the increase in air travel could account for half a degree increase per decade in the past 30 years, and that figure would only rise as air travel becomes more affordable and ubiquitous.

(http://news.nationalgeographic.com/news/energy/2013/04/130423-reshaping-flight-for-fuel-efficiency/)National Geographic (http://news.nationalgeographic.com/news/energy/2013/04/130423-reshaping-flight-for-fuel-efficiency/)...Quote..."...Air traffic worldwide is increasing so rapidly that global carbon dioxide emissions from aviation, which now represent just 2 to 3 percent of all CO2 pollution, could jump as much as 500 percent (http://www.cate.mmu.ac.uk/projects/bridging-the-aviation-co2-emissions-gap-why-emissions-trading-is-needed/) by 2050..."
Forecasting can be overdone as new technology often emerge such as Dreamliners which are more efficient...

[Beagle]

Yes I know Hoop it was really a little tongue in cheek comment in regard to the climate change meeting in Paris. I think we all realise all airlines emit huge quantities of pollution. but at least AIR are doing what they can with new fuel efficient aircraft like the Dreamliner and the latest purchase of very fuel efficient ATR600 aircraft as well as the steps mentioned above.

[RTFQ]

Yes it does Balance. With the busy summer period just ahead, booming growth in tourism and two new international routes together with record low fuel prices both hedged and unhedged, the cash register's will be ringing like crazy this summer especially with six of those fancy new fuel sipping Dreamliners in operation :) $3 is just around the corner !

Roger enjoy your posts, some myths about the 787.

Sure its fuel efficient but on a long haul route against a 777-200 it makes less profit I suggest. The extra premium seats in a 777-200 over a 787 if sold would generate significantly more revenue than the cost of the extra fuel used. I imagine the capital and operating costs of a 777-200 to be less than that of the 787. Another negative with the 787 is that it has poor cargo capacity, volume wise on long haul routes thus reducing the cargo revenue .

I doubt AIR would agree with me for obvious reasons. Your thoughts??

[skid]

I wonder if the time will come when some of the older planes are actually outlawed--Right now I think its more the economic cost savings.

I suppose the economy in general would be one of the earths worst enemies.

Seems a bit dangerous having it in Paris..must be a security nightmare.

[Onion]

Fortunately with CO2 having a higher density than nitrogen, as CO2 levels increase it will enable planes to take off at lower speeds, thus saving fuel.*




* Invented "facts" plucked from thin (but thickening) air :cool:

[Beagle]

Hi RTFQ and welcome to the forum. The 787-9's have been acquired primarily for the purpose of replacing the aging 767-300's which have had to be kept operational longer than originally envisaged due to the well known delay's in the Dreamliner development programme. They weren't procured as a replacement for the 777-200 although they have not dissimilar operating capabilities.

IIRC the 777-200's are on average about 10 years old and I know the refurbishment programme with be completed on all 8 of them by the end of this month.

In terms of the upscale 767-300 v 787-9 there's actually been a significant boost in capacity from 230 seats and five tonnes of cargo capacity, (sometimes this is compromised if the pax load is at max on longer flights) to 302 seats and the full 15 tonnes of cargo can be carried regardless of pax load), so at least 3 times the cargo capacity which is especially useful for fresh products into Asia.

Further there's a meaningful difference in cruise speed with the old 767-300 at 870 k.p.h. and the new Dreamliner at 910 k.p.h. as well as range advantage with the new plane.
Dreamliner's were designed to be 20% more efficient on a seat mile basis than the 767-300's but I understand they're getting in excess of that, I hear whispers of 24% fuel savings per seat mile.
No heavy maintenance is due on the new Dreamliner's for the first 9 years of operation and they got these new aircraft for a real bargain compared to retail. $150m each was mentioned at the annual meeting, I believe the current retail is over $250m per plane. 2 more due next year.

[WingingIt]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11553776

Not quite sure what they're hoping to achieve with their but AIRNZ posted it to Facebook almost every single comment is negative.

My own experience Air NZ is that crew never ever seem to be in any kind of hurry, and leave and arrive late more times than not.

[Beagle]

http://www.nzherald.co.nz/aviation/news/article.cfm?c_id=556&objectid=11553631

AIR starts flights to Buenos Aires today and has recently signed Ritchie McCaw as brand ambassador...pretty sure he's a face that will be internationally recognised and respected :)

[dobby41]

I flew on Vietnam Airlines the other month and they left the runway at the alloted time - not left the gate somewhere near the time.

[RTFQ]

Hi RTFQ and welcome to the forum. The 787-9's have been acquired primarily for the purpose of replacing the aging 767-300's which have had to be kept operational longer than originally envisaged due to the well known delay's in the Dreamliner development programme. They weren't procured as a replacement for the 777-200 although they have not dissimilar operating capabilities.

IIRC the 777-200's are on average about 10 years old and I know the refurbishment programme with be completed on all 8 of them by the end of this month.

In terms of the upscale 767-300 v 787-9 there's actually been a significant boost in capacity from 230 seats and five tonnes of cargo capacity, (sometimes this is compromised if the pax load is at max on longer flights) to 302 seats and the full 15 tonnes of cargo can be carried regardless of pax load), so at least 3 times the cargo capacity which is especially useful for fresh products into Asia.

Further there's a meaningful difference in cruise speed with the old 767-300 at 870 k.p.h. and the new Dreamliner at 910 k.p.h. as well as range advantage with the new plane.
Dreamliner's were designed to be 20% more efficient on a seat mile basis than the 767-300's but I understand they're getting in excess of that, I hear whispers of 24% fuel savings per seat mile.
No heavy maintenance is due on the new Dreamliner's for the first 9 years of operation and they got these new aircraft for a real bargain compared to retail. $150m each was mentioned at the annual meeting, I believe the current retail is over $250m per plane. 2 more due next year.

Roger,Thanks for the info Cheers

[RTFQ]

MSCI index rebalancing at close folks. Anyone who bagged some shares on "flash" index rebalancing sale at $2.72 did very well IMO. Normal service should return tomorrow. Expect some more noise from Jetstar about their new domestic routes tomorrow.

One of buy orders got picked up in this, lucky me I hope. Pardon my ignorance, what is a MSCI index rebalance please?

[Beagle]

Yes lucky you. I thought about getting some more but there's only so much freight you can carry within comfortable load limit's :)

http://www.msci.com/resources/factsheets/index_fact_sheet/msci-world-index.pdf

Every six months index tracking funds have to make a rebalance of their portfolio to track the stock weighting specification of the fund.

[RTFQ]

Thanks Roger

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11554073

[stoploss]

I hope Air NZ get all their A 320's checked out for this problem

http://www.stuff.co.nz/world/asia/74630925/crew-and-faulty-part-blamed-for-airasia-crash-into-java-sea-that-killed-162

[Beagle]

I am sure there has already been an airworthiness directive issued and AIR would have already done the required inspections.

Oil lower for longer ? http://www.cnbc.com/2015/12/01/why-opecs-plan-to-balance-oil-markets-backfired.html

[silverblizzard888]

Air NZ Top Airline again

AirlineRatings.com's top 10 airlines:
1. Air New Zealand
2. Qantas Airways
3. Etihad Airways
4. Cathay Pacific Airways
5. Singapore Airlines
6. Emirates
7. EVA Air
8. Virgin Atlantic /Virgin Australia
9. All Nippon Airways
10. Lufthansa


http://www.msn.com/en-nz/travel/article/air-nz-named-top-airline-for-third-time/ar-AAfTXkG?li=AAaeXZz&ocid=mailsignout

[Robomo]

Air NZ Top Airline again

AirlineRatings.com's top 10 airlines:
1. Air New Zealand
2. Qantas Airways
3. Etihad Airways
4. Cathay Pacific Airways
5. Singapore Airlines
6. Emirates
7. EVA Air
8. Virgin Atlantic /Virgin Australia
9. All Nippon Airways
10. Lufthansa


http://www.msn.com/en-nz/travel/article/air-nz-named-top-airline-for-third-time/ar-AAfTXkG?li=AAaeXZz&ocid=mailsignout

Once again, none of the American or Canadian airlines feature on this list. Will be interesting to see what load percentage American Airlines achieve when they start flying down here.

[Marilyn Munroe]

I hope Air NZ get all their A 320's checked out for this problem

http://www.stuff.co.nz/world/asia/74630925/crew-and-faulty-part-blamed-for-airasia-crash-into-java-sea-that-killed-162

Cold shorts on printed circut boards can be very dificult to diagnose. However allowing a component that had failed 23 times prior to the fatal flight to remain in service is beyond the bounds of reason.

The fatal flight also highlights another issue with modern flying and it seems particulary Airbus crews. When the auto pilot can not work out what is going on disconnects and hands control back to humans the humans sometimes fail to deal with it often with fatal results. Air France AF447 is another example of this.

A commentator has suggested that modern pilot training is too computer orientated and fails to properly train for non auto pilot flying. He suggested that it would be good to give pilots as part of their training flights in bug smasher aeroplanes with nothing to fly with other than a joy stick and wind on their faces to give them a seats of the pants intuition about how a plane stays up in the air

What relevance does this have for Cullen Airlines? I hope and pray their maintainence standards and pilot training are light years beter than the Indonesian franchise of Air Asia.

[Robomo]

I think you can be reassured about maintenance on AirNZ planes Marilyn.

Sales of AirNZ planes attract a premium price because of good maintenance, as do all the major legacy airlines. Problems are more likely to occur with smaller third world airlines flying old planes and skimping on maintenance simply to try and make a buck.

[Beagle]

And look Marilyn, AIR N.Z. beat out Etihad in those airline awards..maybe AIR should take over Etihad :D Not too shabby for a little South Pacific majority Govt controlled airline is it :)

[Joshuatree]

From Craigs conviction list

Buy Air New Zealand (AIR)]AIR has marginally underperformed the New Zealand index since its inclusion on the HighConviction List. It is likely that its share price will be impacted by movements in the oil price, asthis is one of the drivers of its earnings via the cost of fuel. The low price of oil is currently asignificant tail wind for AIR. Analysts are forecasting a significant drop in earnings in FY17 forAIR, driven by an increase in the oil price, the roll off of beneficial exchange rate hedges andweaker yields as competition impacts its ability to fill its planes. We expect the oil price willremain low for longer and this alone will drive significant upgrades to FY17 earnings. Further, recent operating statistics have illustrated AIR’s ability to fill additional capacity and offset]increased competition by maintained flexibility in its network and introduce new routes. It isbenefitting from strong air travel trends, but we believe effective management is also playing itspart.
AIR is trading on an FY16 price to earnings multiple of only 5.3x, significantly below its long runaverage of over 11x, and offers an attractive gross dividend yield of more than 10%. It has astrong balance sheet and a relatively new fleet, reducing future capital requirements andproviding the potential for AIR to return capital to shareholders. We expect AIR will outperform asFY17 earnings forecasts are upgraded.

Pathetic s/p performance for a stock with so many "tailwinds" get [/COLOR]a move on or i put the inverter on those wide bodies:cursing::lol:

[winner69]

Once the brokers start touting higher earnings share price will zoom past $3 and beyond

That'll stuff the $2.40'ers up big time - That'll learn them to be knockers and advising punters to be careful, they will have got it well and truly wrong

[Zaphod]

Much of the reason for investment in this particular share has been the consistent incorrect projections made by brokers. I haven't yet seen anything to change my mind, based on the evidence they've presented thus far.

[Beagle]

From Craigs conviction list

Buy Air New Zealand (AIR)]AIR has marginally underperformed the New Zealand index since its inclusion on the HighConviction List. It is likely that its share price will be impacted by movements in the oil price, asthis is one of the drivers of its earnings via the cost of fuel. The low price of oil is currently asignificant tail wind for AIR. Analysts are forecasting a significant drop in earnings in FY17 forAIR, driven by an increase in the oil price, the roll off of beneficial exchange rate hedges andweaker yields as competition impacts its ability to fill its planes. We expect the oil price willremain low for longer and this alone will drive significant upgrades to FY17 earnings. Further, recent operating statistics have illustrated AIR’s ability to fill additional capacity and offset]increased competition by maintained flexibility in its network and introduce new routes. It isbenefitting from strong air travel trends, but we believe effective management is also playing itspart.
[FONT=Univers 45 Light]AIR is trading on an FY16 price to earnings multiple of only 5.3x, significantly below its long runaverage of over 11x, and offers an attractive gross dividend yield of more than 10%. It has astrong balance sheet and a relatively new fleet, reducing future capital requirements andproviding the potential for AIR to return capital to shareholders. We expect AIR will outperform asFY17 earnings forecasts are upgraded.



Sums the situation up well IMO. I see they made what looks like a very high calibre appointment as the new head of digital, http://www.nzherald.co.nz/air-new-zealand/news/article.cfm?o_id=5&objectid=11554466

February isn't that far off and I'm looking forward to a cracker result and huge dividend. I continue to believe that N.Z. analysts are generally woefully pessimistic on FY17 and FY18 earnings and that big upgrades will be forthcoming in due course.

[Joshuatree]

Much of the reason for investment in this particular share has been the consistent incorrect projections made by brokers. I haven't yet seen anything to change my mind, based on the evidence they've presented thus far.

The current s/p agrees with you there Zaphod. Its not ascending now so will it finally respond when results come in .Going on whats not happening now , who would want to predict a certain price in the future. Plenty of breathing space and profitable options with my re $2.40 entry.No way would i buy in at these levels until a decisive break upwards; look at the last two times, sheesh .

[Beagle]

http://www.nzherald.co.nz/air-new-zealand/news/article.cfm?o_id=5&objectid=11554192

[macduffy]

One of the reasons that I fly Air New Zealand.

http://www.theage.com.au/business/aviation/why-the-airasia-crash-report-should-serve-as-a-wakeup-call-for-travellers-20151202-gld94f.html

[theace]

Interesting article on ETOPS certification for AirNZ on their flight to Buenis Aires:
http://australianaviation.com.au/2015/12/air-nz-operates-first-330-minute-etops-flight-for-inaugural-to-buenos-aires/

[Hoop]

AIR releasing high tech products..but AIR has it's work cut out to beat this high tech video of an aircraft landing (http://www.stuff.co.nz/travel/news/74730355/planes-spectacular-landing-is-not-what-it-seems) :)

[macduffy]

I know this isn't the Jetstar thread - but you flyboys might find this interesting.

http://www.theage.com.au/business/aviation/jetstar-procedures-under-investigation-after-planes-took-off-too-heavy-20151203-glf6rq.html

[LAC]

Think they need to start weighing the passengers not just the baggage:)

[Robomo]

I know this isn't the Jetstar thread - but you flyboys might find this interesting.

http://www.theage.com.au/business/aviation/jetstar-procedures-under-investigation-after-planes-took-off-too-heavy-20151203-glf6rq.html

Counting heads wrongly is a really basic human error that should not happen - ever. One error is understandable but 3? Someone's head at Qantas/Jetstar should roll.

[brend]

Counting heads wrongly is a really basic human error that should not happen - ever. One error is understandable but 3? Someone's head at Qantas/Jetstar should roll.

So correct me if I'm wrong but planes have the ability to calculate cargo and passenger weight? Is the flight floor a massive weight scale?

[Robomo]

No, the flight floor is not a big scale.

The last thing before the doors are closed is the load master handing the flight crew numbers of passengers known to have boarded and the weight of baggage (weighed in the baggage handling part of the airport) and cargo and fuel. Seats are assigned to balance the aircraft, which is why occasionally passngers in smaller aircraft may be asked to change seats. If a checked in passenger does not board then their luggage is off-loaded and the weights re-calculated. The pilot should double-check all these weights from what has been previously advised pre-flight and if there is a discrepancy then everything is checked again.

[brend]

No, the flight floor is not a big scale.

The last thing before the doors are closed is the load master handing the flight crew numbers of passengers known to have boarded and the weight of baggage (weighed in the baggage handling part of the airport) and cargo and fuel. Seats are assigned to balance the aircraft, which is why occasionally passngers in smaller aircraft may be asked to change seats. If a checked in passenger does not board then their luggage is off-loaded and the weights re-calculated. The pilot should double-check all these weights from what has been previously advised pre-flight and if there is a discrepancy then everything is checked again.

Was a joke

but would passenger weight be an rough average.

[skid]

AIR releasing high tech products..but AIR has it's work cut out to beat this high tech video of an aircraft landing (http://www.stuff.co.nz/travel/news/74730355/planes-spectacular-landing-is-not-what-it-seems) :)

Did You catch how the passengers disembarked?

[winner69]

**** does happen in this industry -- even with Dreamliners

http://www.stuff.co.nz/travel/travel-troubles/74773167/air-new-zealand-dreamliner-delayed-in-china-by-faulty-brakes

[skid]

Guess ,like a car,it can be good to wait till the get the bugs out--meanwhile ''I hate it when those body panels fall off when landing'' (hopefully they are talking about an inside body panel)

[brend]

**** does happen in this industry -- even with Dreamliners

http://www.stuff.co.nz/travel/travel-troubles/74773167/air-new-zealand-dreamliner-delayed-in-china-by-faulty-brakes

The delay dented the confidence of one frequent flier on the flight, who asked not to be identified. Passengers had been told on Friday that a new part needed to be flown in from Hong Kong and it was the third time in the last few years he had experienced delays due to mechanical problems on the route, he said.

"Twice hydraulic systems, and last night a missing piece of aircraft. I start to wonder if Air New Zealand maintenance is up to scratch or not," he said.

said passenger sounds like a real douche-bag. These planes have less than a years service and don't need heavy maintenance.

[winner69]

The delay dented the confidence of one frequent flier on the flight, who asked not to be identified. Passengers had been told on Friday that a new part needed to be flown in from Hong Kong and it was the third time in the last few years he had experienced delays due to mechanical problems on the route, he said.

"Twice hydraulic systems, and last night a missing piece of aircraft. I start to wonder if Air New Zealand maintenance is up to scratch or not," he said.

said passenger sounds like a real douche-bag. These planes have less than a years service and don't need heavy maintenance.

But then seeing they less than a year old one would think they shouldn't break down!!!

[brend]

But then seeing they less than a year old one would think they shouldn't break down!!!

You would think that but things can break regardless of its age. Its just abit unfortunately it happened in Shanghai and not Auckland.

[GuessX]

Oil is now at a seven year low. OPEC's white flag over the weekend brought about by Iran's refusal to limit production means the cartel is now toothless. The market rules, and supply far exceeds demand. Prices have dropped to seven year lows. The cost of energy is now its cheapest in real terms, ever.
And that means air travel is likely to get less expensive.

http://www.interest.co.nz/news/79027/oil-prices-hit-7yr-low-iron-ore-prices-hit-6yr-low-beijing-red-alert-china-fx-outflows

Looks like the nice oil ride will be set to continue for a while longer.

[skid]

http://www.interest.co.nz/news/79027/oil-prices-hit-7yr-low-iron-ore-prices-hit-6yr-low-beijing-red-alert-china-fx-outflows

Looks like the nice oil ride will be set to continue for a while longer.

I was just thinking of that today ($38 barrel) as I drove by the $1.90 liter (91) service station!---Hopefully airlines can do a better job of reducing prices.

[brend]

Star Alliance member Air New Zealand plans to expand operations for Auckland – Houston route in Northern summer 2016 season, effective 27MAR16. Previously scheduled to operate 3 times a week, the airline now plans to operate this route 5 times a week.

Looks like strong demand.

This was announced late last month.

Source: http://airlineroute.net/2015/11/23/nz-iah-s16/

[Joshuatree]

Thanks for that brend.
"Houston , we have a , solution ,its called AwwwKkland Noo Zeeeland":sleep:

[skid]

Star Alliance member Air New Zealand plans to expand operations for Auckland – Houston route in Northern summer 2016 season, effective 27MAR16. Previously scheduled to operate 3 times a week, the airline now plans to operate this route 5 times a week.

Looks like strong demand.

This was announced late last month.

Source: http://airlineroute.net/2015/11/23/nz-iah-s16/

15hr flight--guess thats about as long as it gets--I hope they have taken that into consideration with their seating configuration.(Ive got a love-hate thing going on with direct flights (long ones)--Its convenient but sometimes its easier to be able to stretch the legs on a layover.

[skid]

Thanks for that brend.
"Houston , we have a , solution ,its called AwwwKkland Noo Zeeeland":sleep:

Be careful--Dem Dare Texaans caary Dem Big ole Guns on der hips

[vin]

$2.845, looking good!

[Joshuatree]

Yes vin. Is it finally starting a breakout or a Fake out ;hope its the first; if it can't climb with all the positive announcements and while oil falls well ....heres hoping.

[RTFQ]

Talked to an agent yesterday that said EZE flights had good forward bookings and the extra services planned are a certainty. Glad I took Roger's advise.

[Balance]

http://www.bloomberg.com/news/articles/2015-12-10/airlines-forecast-to-extend-record-profits-with-10-gain-in-2016-ii01ntex

Confirming the trend for airline industry in 2016.

Oil price dipping below $40 (Brent) is a major plus.

[biker]

Talked to an agent yesterday that said EZE flights had good forward bookings and the extra services planned are a certainty. Glad I took Roger's advise.

The extra flights are for IAH not EZE are they not?

[RTFQ]

The extra flights are for IAH not EZE are they not?


From the way he was talking there are currently three flights a week with two more services a week to be added.

[Robomo]

An interesting article about these two airlines. Alaska's SP going up but Spirit's going down despite both making money

http://www.nasdaq.com/article/alaska-air-alk-and-spirit-save-two-very-different-charts-one-conclusion-cm553534

[winner69]

The kids seem to have enjoyed the enforced stopover but other booked customers sound a bit peeved

http://www.stuff.co.nz/travel/travel-troubles/75045172/jetstar-customers-angry-after-being-kicked-off-flight-to-accommodate-school

To remain on topic best bit - "The main lesson is that the kids should have sold more cupcakes so they could have flown Air New Zealand," he joked

[Zaphod]

Jetstar could have accommodated affected passengers on an AirNZ flight, given the flow on effect emerging from shuffling passengers between flights. The precedent for this has already been set by Qantas who sometimes bump passengers to AirNZ, of which I have been one of in the past.

The big question here is what happens in the case of Kiwi Regional Airlines? Not only do they only have one plane, but they are servicing third tier routes that no other airline services, and replacement short-duration charter aircraft of a suitable size would be difficult to obtain.

[winner69]

Strike over - can now resume posting on this thread. Been rather quiet here lately, not surprising really how many members have been banned or just decided to stop posting for good.

The 2nd trade going OK but price not going up as fast as it should be. But 6% odd in a dew weeks aint too bad.

Tight trailing stop is now 275 which would lock in some profits.

But the big gains to be made are when AIR breaks through the $3 barrier - once past that it really is blue sky.

Then again tomorrow could be a bad day - will lower oil prices win out over a shocking Friday night on US markets (nearly 2% down, Might not be a shareholder anymore this time tomorrow.

If that is the case back to revised strategy posted a while ago - wait until $3 and then pile in big time.

[allfromacell]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11560687


But Mr Robinson said there was no announcement upon his arrival at Auckland Airport, and he booked an Air New Zealand flight instead.

[winner69]

Last months stats out

Can't do much better than this. The important RSK number drives revenues so double digit top line growth. AIR on a roll and oil price staying lower for longer = huge profits

November market conditions

Air New Zealand carried 1,185,000 passengers during the month of November, 8.7% more than the same period last year. Revenue passenger kilometres (RPKs) were 12.4% higher on a capacity (ASKs) increase of 9.5%. Group load factors were up 2.3 percentage points to 85.1%.

Bad day on market but AIR up. Good sign.

That $3 beckons - please Santa

[RTFQ]

Last months stats out

Can't do much better than this. The important RSK number drives revenues so double digit top line growth. AIR on a roll and oil price staying lower for longer = huge profits

November market conditions

Air New Zealand carried 1,185,000 passengers during the month of November, 8.7% more than the same period last year. Revenue passenger kilometres (RPKs) were 12.4% higher on a capacity (ASKs) increase of 9.5%. Group load factors were up 2.3 percentage points to 85.1%.

Bad day on market but AIR up. Good sign.

That $3 beckons - please Santa

The yield was down I suspect shoulder season. RSK's are a reflection of numbers carried. If discounting to fill seats then yield is reduced. I might be misreading the report but I don't think its that flash.

[winner69]

The yield was down I suspect shoulder season. RSK's are a reflection of numbers carried. If discounting to fill seats then yield is reduced. I might be misreading the report but I don't think its that flash.

They said - Group-wide yields for the financial year to date were down 1.2% on the same period last year. Short Haul yields were down 0.2% while Long Haul yields were up 1.1%. Removing the impact of foreign exchange, Group-wide yields were down 4.4%.

The Group-wide yield is declining because long haul (with a lower yield) is growing faster than short haul (which has the higher yield) - its a mix issue which will continue as they roll out more long haul destinations.

RFKs up 12% odd and yield sown 1% will still give revenue growth >10% which is pretty darn good.

Also pleasing is that the November month % growth numbers in most case higher than YTD %ages - momentum building / things are getting better as they year progresses

[Onion]

But the big gains to be made are when AIR breaks through the $3 barrier - once past that it really is blue sky.

...

wait until $3 and then pile in big time.

Educate me please Winner. What is so magical about $3? If it is going to be so good once $3 has been hit then it must be even better at today's price.

[RTFQ]

They said - Group-wide yields for the financial year to date were down 1.2% on the same period last year. Short Haul yields were down 0.2% while Long Haul yields were up 1.1%. Removing the impact of foreign exchange, Group-wide yields were down 4.4%.

The Group-wide yield is declining because long haul (with a lower yield) is growing faster than short haul (which has the higher yield) - its a mix issue which will continue as they roll out more long haul destinations.

RFKs up 12% odd and yield sown 1% will still give revenue growth >10% which is pretty darn good.

Also pleasing is that the November month % growth numbers in most case higher than YTD %ages - momentum building / things are getting better as they year progresses

Got it now Thanks

[RTFQ]

Educate me please Winner. What is so magical about $3? If it is going to be so good once $3 has been hit then it must be even better at today's price.

For TA traders whole numbers often reflect points of market resistance. I think what Winner is suggesting that currently $3 is a point of resistance and when it is broken market inertia will see the share price quickly climb.

[Onion]

For TA traders whole numbers often reflect points of market resistance. I think what Winner is suggesting that currently $3 is a point of resistance and when it is broken market inertia will see the share price quickly climb.

I thought it would be something like that. I am not familiar with all the secret handshakes, flags and crosses that keep the TA'ers occupied.

... although there was a very interesting pattern in my muesli this morning -- looked bit like a plane taking off! Or crashing, depending the how you held the bowl.:p

[vin]

Strong run over the lasat few weeks, looking good. Today is the inaugural flight for Houston at around 6PM, I'll be there.

[winner69]

Got it now Thanks

Some 5 months into the new financial year and growth got some real momentum going.

Based on the numbers in the update expect H1 passenger revenues to be $225m higher than last year (+11%)

Of that increase $160m coming from long haul - the new routes are paying off eh.

No wonder AIR super confident of H1 earnings n excess of $400m - double last year

What does Percy keep reminding us - price follows earnings

[winner69]

I thought it would be something like that. I am not familiar with all the secret handshakes, flags and crosses that keep the TA'ers occupied.

... although there was a very interesting pattern in my muesli this morning -- looked bit like a plane taking off! Or crashing, depending the how you held the bowl.:p

It's more than patterns in your muesli mate - its all psychology

Over the last 10 years AIR share price has got close to $3 but never stayed there. I think it went briefly over for a few hours a few months ago.

It seems a point where punters feel they should sell (probably thinking it is not going any higher). That's what happened several times now over the years. Spooky eh.

But what often happens is that once these 'resistance' levels are broken all the bad feeling about $3 (in AIRs case) will be forgotten and the price will head up to another resistance level - maybe $3.50 or $4.00

The best part of the story is that when a long entrenched resistance level is broken than it becomes support - any minor correction will only be to that point.


You asked why not buy big now if the big gains will be made when $3 is breached. Answer is that there is no certainty that $3 will be breached and in this case buying now has limited upside. A matter of waiting for greater certainty.

But for he likes of you onion who have been holding for years now all this doesn't matter does it ....at $2.84 you happy, at $3.50 happier still eh

Do you think AIR share price will go over $3 one day? Be honest with me and not consult you muesli or onion skins.

[winner69]

Electronic Card Spend in NZ for November saw Travel and Accommodation category sales up 11.4% on last year. Last three months they are up 10.9% on last year

NZers sure spending heaps on travel ..... and Air NZ seem to be cashing in

[Joshuatree]

S/P sure is starting to look like faking it till its making it. Heres hoping it can break thru the surface tension and fly.

[Joshuatree]

Just caught an interview on CNBC with Chris luxton. Re Houston. "theres 30 million Americans with NZ and Aus on their bucket list" re comp , plenty for all. Also they mentioned Qantas, "fastest turnaround in aus corporate history"profit wise, $900 million half yearly profit. Qan s/p been crabbing sideways a bit similar to AIR but down today

[Onion]

Do you think AIR share price will go over $3 one day? Be honest with me and not consult you muesli or onion skins.

Thanks for the information Winner.

I've only recently bought AIR so have only a modest paper gain at present. I've stood back until recently because I'm cautious by nature and airlines are supposed to be a great way to lose money.

But AIR seem to be doing really good things; great things for a relatively small player in global terms. I like the innovation, the sense of humour, and mainly the history of good strategy (sensible partnerships, good fleet of aircraft, considered route expansion).

So I certainly hope they can continue to grow their SP, and yes, break the $3 hoodoo.

[winner69]

S/P sure is starting to look like faking it till its making it. Heres hoping it can break thru the surface tension and fly.

Share price strengthening ....nearly hit 290 today

Getting close to back the truck up time methinks

[Joshuatree]

My Ego has learnt not to use that phrase:sleep: Vol not very convincing and the s/p has stalled before when that phrase "backing the truck" up was used. At the mercy of the Fed decision tomorrow?

[workingdad]

Share price doing better than their customer services at the moment. 4th day with no response to a complaint regarding baggage delay of 28 hours when in Vancouver over the weekend. $6500 in tickets including business class, 2nd time in 6 months my bag has not made the same international flight as me and having to go shopping for 4 hours and $1200 to find cold climate clothes and toiletries for Calgary in the middle of a busy schedule is not my idea of fun. It happens and how companies deal with this after the event will dictate the outcome. Obviously not having so much as an acknowledgement call is not making a very good impression.....

[Yoda]

Share price doing better than their customer services at the moment. 4th day with no response to a complaint regarding baggage delay of 28 hours when in Vancouver over the weekend. $6500 in tickets including business class, 2nd time in 6 months my bag has not made the same international flight as me and having to go shopping for 4 hours and $1200 to find cold climate clothes and toiletries for Calgary in the middle of a busy schedule is not my idea of fun. It happens and how companies deal with this after the event will dictate the outcome. Obviously not having so much as an acknowledgement call is not making a very good impression.....
agree thats not very good.. . But SP is creeping up. It would be a good NY if it broke through $3 by then. Maybe that would make up for it.....

[workingdad]

agree thats not very good.. . But SP is creeping up. It would be a good NY if it broke
through $3 by then. Maybe that would make up for it.....

Actually finally got a call from them midday Friday after I left a phone message Thursday morning. They will be in touch next week after looking into. I did mention a 5 day wait was not up to expectations and I was unable to complete travel insurance claim without closing things with them first.

SP over $3 for a bit longer than last time would be good ;)

[Marilyn Munroe]

They will be in touch next week after looking into. I did mention a 5 day wait was not up to expectations


Cullen Airlines should review the performance of their ground handling contractor at YVR.

Bop boop de do
Marilyn

Edit: I may have been hasty to assign blame to YVR ground handling contractor. After reading workingdads original post the problem seems to be at the AKL end.

[workingdad]

Cullen Airlines should review the performance of their ground handling contractor at YVR.

Bop boop de do
Marilyn

Edit: I may have been hasty to assign blame to YVR ground handling contractor. After reading workingdads original post the problem seems to be at the AKL end.

Yep.... both times - baggage congestion was the underlying issue. Be nice if in todays technological age they could notify receiving airport of delay to avoid standing at the baggage carousel looking like a half sucked black aniseed lolly for an hour.

[skid]

Usually baggage delays happen when you have a connection .especially if it is tight due to late arrival etc.--To happen from the originating flight is a bad look and I can relate to your dismay to having no warm clothes in a winter destination--(it happened to us but we had relatives there which helped immensely(2 sizes to big ,but still warm:)


5 day wait for baggage congestion???


Meanwhile...I dont think Monday is going to be your golden $3 day after looking at outside markets

[workingdad]

Usually baggage delays happen when you have a connection .especially if it is tight due to late arrival etc.--To happen from the originating flight is a bad look and I can relate to your dismay to having no warm clothes in a winter destination--(it happened to us but we had relatives there which helped immensely(2 sizes to big ,but still warm:)


5 day wait for baggage congestion???


Meanwhile...I dont think Monday is going to be your golden $3 day after looking at outside markets

2 sizes too big... that's all the rage these days isn't it haha.

got the bag back 28 hours later when I checked in to return to NZ but as I had to carry on to Calgary and the bag was a minimum of 24 hours behind to catch the same direct flight the day after I left I went and bought the clothes and toiletries needed. The 5 days was waiting for someone from Air NZ to ring in response to my email raising the issue of it being the 2nd time in 6 months and that I needed the case resolved prior to lodging a claim for insurance on the $1200 spend buying replacement items. I also mentioned in the email as a gesture of good will there should be some bonus airpoints applied to my account :p

[skid]

Just a sidebar --I always try to cram at least one set of clothes in my carry on--If your not traveling light (like me to the tropics)I would take the maximum size carry on.

[workingdad]

Just a sidebar --I always try to cram at least one set of clothes in my carry on--If your not traveling light (like me to the tropics)I would take the maximum size carry on.

Its usually all I take (a carry on) particularly only being there one night but with the bulkiness of ski jacket/pants, gloves and thermals it was too much to squeeze in so I used a bigger bag than I usually use and checked it. Business class allows 3 carry on bags but I not keen on lugging them all around plus the laptop.

[skid]

Just a sidebar --I always try to cram at least one set of clothes in my carry on--If your not traveling light (like me to the tropics)I would take the maximum size carry on.

[workingdad]

They came back today with an offer of $200 in airpoints...... needless to say I am not impressed:t_down: I have let them know my thoughts on the offer. Anyone else fly with other airlines? I like Air NZ for the koru lounge but wondering what other airlines offer and willing to explore these options as a result.

[mikeybycrikey]

I'm guessing that Roger must be banned again as it has been a little quiet here. SP is slowly ramping up towards $3 and oil is at its lowest price for over 10 years. Seems like good news to me. That along with successful launch of both the Buenos Aires and Houston routes this month

I'm not expecting much share price movement until the half year results are announced. Assuming they can meet their expectations (was it $400 million profit?) I think we can expect a generous bump.

[stoploss]

They came back today with an offer of $200 in airpoints...... needless to say I am not impressed:t_down: I have let them know my thoughts on the offer. Anyone else fly with other airlines? I like Air NZ for the koru lounge but wondering what other airlines offer and willing to explore these options as a result.

At least they offered you something . I wrote a letter after a recent trip 95 % of which was very good . Just pointing out where they had really let themselves down on the rest of the journey .
They apologised that their standards were not met and forwarded the information to the airport team to so they can review where they went wrong .
Not a drinks voucher , not an airpoint on offer ......... All will be forgotten if they keep the profitability up :)

[Traderx]

At least they offered you something . I wrote a letter after a recent trip 95 % of which was very good . Just pointing out where they had really let themselves down on the rest of the journey .
They apologised that their standards were not met and forwarded the information to the airport team to so they can review where they went wrong .
Not a drinks voucher , not an airpoint on offer ......... All will be forgotten if they keep the profitability up :)

Seems like customer service is quite variable. My experience the other day was with tired toddler in tow and the end of a long day hearing that flight had been cancelled due to "engineering" and that we would be re-booked later which we were but with no recompense. I politely asked if we could spend the enforced wait period in the Koru, I was equally politely declined but they did cough up about $20 in food vouchers.. small but at least something. Only because we asked for something specifically I think though.

[workingdad]

At least they offered you something . I wrote a letter after a recent trip 95 % of which was very good . Just pointing out where they had really let themselves down on the rest of the journey .
They apologised that their standards were not met and forwarded the information to the airport team to so they can review where they went wrong .
Not a drinks voucher , not an airpoint on offer ......... All will be forgotten if they keep the profitability up :)

They didn't offer enough to even cover out of pocket expenses as a direct result of the delay. I think they are liable under the various acts they operate under and with time off over Christmas might just make it my mission to explore this further and have it play out in the public arena if they don't come back with something more substantial. Insurance has an excess and limit on what it covers, Air NZ can cover the rest and some to make up for the hassle in my opinion, $200 airpoints - not even close!!! I am appalled with how they are treating a frequent flyer business customer. Like many things its not just about the $, its about how they handle it and since the incident, its an epic fail (as my daughter would say).

[Sideshow Bob]

Flew last week to HK and back.

Flight almost full heading there and completely chocka on the way back. Got upgraded to premium economy there and is sufficient when just heading there - good legroom etc. Probably got upgraded because cost over $3.3k for flights (from regional airport and then a small side trip).

On the way back couldn't use upgrade awards and in economy. I'm about 6'2" and reasonable build, but was sitting on the aisle. Leg room was tight but could have lived with it. However with 10 across (I think 777) it made the aisle too narrow and was getting CONSTANTLY bumped in the shoulder - quite often by one particular stewardess, which could be described as 'chunky'. It was quite frankly ridiculous. Sitting normally in the seat, and shoulder protrudes into the aisle.

However the service was excellent, and staff very good. Again probably helps that the guy I was with is Gold Elite, and at least 3 staff came and specifically talked to us, bought water, served us meals first, etc etc.

Talking to them near the end, the staff hate the narrowness of the aisle, were quite apologetic and say the new planes are even worse. Reckon will be a lot of staff around with hip problems in the future!

[skid]

so here you have it--Staff are great,but the accountants have taken over on what is offered in the way of comfort--If people put up with this-then the bottom line will of course benefit(and so will shareholders) but if enough people get fed up with cramped seating(including staff) well..customers will go elsewhere if they have a choice,and it will be a stretch to be talking about our ''premium'' airline.
This is where number crunching and marketing foresight collide.
Speaking of number crunching ...Roger ..we still love you:) and have a good Christmas (and that goes to all )

[777]

But skid the same accountants are in all airlines. The public demand low fares so the airlines have to cram more seats in.

Anyway a Merry Christmas to Roger as well and to everyone else for that matter.

[Teeps]

I second that. Roger, we miss you, as we do the other posters who have been given a posting holiday. Lets hope you all return in the New Year - your contributions are invaluable and help 'rookie' investors like me immensely. Thanks to all for the posts this year. I've taken much of the information provided and have settled on a decent holding in AIR - one I am very happy with given the current SP. I still think AIR will cross the $3 threshold in 2016 - and then continue climbing to unprecedented altitudes. Merry Christmas to all.

[Sideshow Bob]

so here you have it--Staff are great,but the accountants have taken over on what is offered in the way of comfort--If people put up with this-then the bottom line will of course benefit(and so will shareholders) but if enough people get fed up with cramped seating(including staff) well..customers will go elsewhere if they have a choice,and it will be a stretch to be talking about our ''premium'' airline.
This is where number crunching and marketing foresight collide.
Speaking of number crunching ...Roger ..we still love you:) and have a good Christmas (and that goes to all )

Absolutely spot on Skid. Can do all the fancy things very well, but if cram the punters in uncomfortably for 11 hours, then will start to look elsewhere.

[skid]

But skid the same accountants are in all airlines. The public demand low fares so the airlines have to cram more seats in.

Anyway a Merry Christmas to Roger as well and to everyone else for that matter.

Sorry 777, but all airlines do not cram that amount of seats in a plane--There are some who still compete and provide more comfort to boot-Its just a fact--but whether this will affect the bottom line--well,the answer is blowing in the wind:)

[winner69]

Fuel prices to remain low and more and more people flying

News is full of booming airline profits.

Globally, profits are "unprecedented" said Chris Sloan, founder and president of AirwaysNews.com.

AIR half year announced soon - operating profit in excess of 1/2 billion bucks? Quite possible,after all they indicated at least $400m a few months ago and things have got better since.

Share price under $3 - time to back the truck up

[KiwiGekko]

I read an article today where the Delta CEO claimed in October (with various follow up articles if you care to Google this topic) that he could purchase used Boeing 777 for 10 million & Boeing told the media he was wrong: http://www.bloomberg.com/news/articles/2015-11-20/delta-says-boeing-made-offer-in-flap-over-10-million-777-price - well turns out he wasn't. They've now agreed to purchase a 10 year old 777 for 7.7 million, which certainly made me sit up considering the lowest price i've seen quoted 10 years ago was 170 million (and current list price today I have seen quoted as 277 million), which is either a 95.47% or 97.22% discount depending on which number you believe).

For me, it does give a bit more credibility to his claims that there is a bit of an oversupply of these older planes coming off lease's soon: http://www.bloomberg.com/news/articles/2015-12-17/why-delta-s-ultra-cheap-used-777-jet-wiped-out-boeing-stock-gain

I would be keen to hear from those with a better understanding of the numbers than myself on the potential of a carrier purchasing these planes at a reduced rate combined with crude being so low and what impact this could have on competition for the airline industry globally and more specifically AIR which is currently ramping up its capacity around the Pacific Rim.

DISC: Not holding at present, but I have in the past & think AIR is a fantastic business and a fantastic airline.

[winner69]

There was also a comment on the radio this morning that it costs airlines 50% less to fly a plane today than it was in 1995 (or might have even been 1985)

No wonder AIR might make 1/2 billion bucks in 6 months

[stoploss]

I read an article today where the Delta CEO claimed in October (with various follow up articles if you care to Google this topic) that he could purchase used Boeing 777 for 10 million & Boeing told the media he was wrong: http://www.bloomberg.com/news/articles/2015-11-20/delta-says-boeing-made-offer-in-flap-over-10-million-777-price - well turns out he wasn't. They've now agreed to purchase a 10 year old 777 for 7.7 million, which certainly made me sit up considering the lowest price i've seen quoted 10 years ago was 170 million (and current list price today I have seen quoted as 277 million), which is either a 95.47% or 97.22% discount depending on which number you believe).

For me, it does give a bit more credibility to his claims that there is a bit of an oversupply of these older planes coming off lease's soon: http://www.bloomberg.com/news/articles/2015-12-17/why-delta-s-ultra-cheap-used-777-jet-wiped-out-boeing-stock-gain

I would be keen to hear from those with a better understanding of the numbers than myself on the potential of a carrier purchasing these planes at a reduced rate combined with crude being so low and what impact this could have on competition for the airline industry globally and more specifically AIR which is currently ramping up its capacity around the Pacific Rim.

DISC: Not holding at present, but I have in the past & think AIR is a fantastic business and a fantastic airline.

Sure they could buy those planes but at that price , must need significant maintenance . New fit out , etc, etc someone will know the likely cost of that . Being older ongoing maintenance
will be much higher than the AIR NZ , considerably newer fleet. Unlikely to return as much per passenger, per K as the new Air NZ 787 imo.

[skid]

There was also a comment on the radio this morning that it costs airlines 50% less to fly a plane today than it was in 1995 (or might have even been 1985)

No wonder AIR might make 1/2 billion bucks in 6 months

Id be interested to know how many think their prices now reflect that cost savings

I believe for a company like this,it is more helpful to think like a customer ,rather than a shareholder(to avoid the ''bubble syndrome''

[KiwiGekko]

Sure they could buy those planes but at that price , must need significant maintenance . New fit out , etc, etc someone will know the likely cost of that . Being older ongoing maintenance
will be much higher than the AIR NZ , considerably newer fleet. Unlikely to return as much per passenger, per K as the new Air NZ 787 imo.

Yeah, exactly. We have all heard that the 787 yield higher RPK's - but my question is can anyone comment or point to information that explains the relationship between the reduction in the cost of oil (fuel) combined with the reduction in the cost of purchasing second hand but not really much older than AIR's current 777-200ER's. I am specifically interested in what meaningful impact this might have on the RPK's a 777 could yield then compared to the industry leaders - for arguments sake the 787.

Regarding the fit out - interestingly, we can assume a refit costs around 12 million (I assume NZD, so 8.5 USD?) based on this article here: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11349416 - AIR's fleet of 777-200ER's are coming up on 10 years, which means they're getting a refit at present.

I have started some scratchings in a spreadsheet which are missing a few things that are assumed equal and probably are not - maintenance costs for example. Currently (and perhaps incorrectly) assuming jet fuel at US $1.33 per Gallon and a cost of capital at 175 points above the prime rate I come out with a cost per passenger kilometre which is 19% cheaper on a full flight between AKL -> IAH with a 777-200ER vs 787. I will continue working on this over my "holiday" and see what conclusion I reach, but this quite interesting (unless i've completely cocked up my numbers) given I am working on the assumption the 787 is 22% more fuel efficient as detailed here: http://planes.axlegeeks.com/compare/289-293/Boeing-777-200ER-vs-Boeing-787-8-Dreamliner

I am playing devils advocate here, but if the trend is for oil to be low for a while & we're about to see a few cheap 777's on the market. What does this mean for the plane manufacturers? What does this mean for the investment the various airlines have made in the new 787's - will we perhaps see some increased competition as a result? Have I completely stuffed up my numbers and if not does anyone want to purchase a 777-200ER as a timeshare? ;-)

I'm genuinely interested in hearing peoples thoughts & as always DYOR.

[biker]

Yeah, exactly. We have all heard that the 787 yield higher RPK's - but my question is can anyone comment or point to information that explains the relationship between the reduction in the cost of oil (fuel) combined with the reduction in the cost of purchasing second hand but not really much older than AIR's current 777-200ER's. I am specifically interested in what meaningful impact this might have on the RPK's a 777 could yield then compared to the industry leaders - for arguments sake the 787.

Regarding the fit out - interestingly, we can assume a refit costs around 12 million (I assume NZD, so 8.5 USD?) based on this article here: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11349416 - AIR's fleet of 777-200ER's are coming up on 10 years, which means they're getting a refit at present.

I have started some scratchings in a spreadsheet which are missing a few things that are assumed equal and probably are not - maintenance costs for example. Currently (and perhaps incorrectly) assuming jet fuel at US $1.33 per Gallon and a cost of capital at 175 points above the prime rate I come out with a cost per passenger kilometre which is 19% cheaper on a full flight between AKL -> IAH with a 777-200ER vs 787. I will continue working on this over my "holiday" and see what conclusion I reach, but this quite interesting (unless i've completely cocked up my numbers) given I am working on a fuel inefficiency of 22% for the 777-200ER.

I am playing devils advocate here, but if the trend is for oil to be low for a while & we're about to see a few cheap 777's on the market. What does this mean for the plane manufacturers? What does this mean for the investment the various airlines have made in the new 787's - will we perhaps see some increased competition as a result? Have I completely stuffed up my numbers and if not does anyone want to purchase a 777-200ER as a timeshare? ;-)

I'm genuinely interested in hearing peoples thoughts & as always DYOR.

The fuel efficiency should apply to the 787 not the 777

[stoploss]

[QUOTE=biker;601998]The fuel efficiency should apply to the 787 not the 777[/QUOTE
Biker I think thats what Gekko was saying "working on a fuel inefficiency of 22% for the 777-200ER"

[KiwiGekko]

The fuel efficiency should apply to the 787 not the 777

Correct, sorry for any confusion caused by my double dutch. I will edit my post so it makes more sense. I used the fuel figures from this website here: http://planes.axlegeeks.com/compare/289-293/Boeing-777-200ER-vs-Boeing-787-8-Dreamliner - I lay these up in my spreadsheet side by side as opposed to calculating relative numbers which can be confusing to keep track of. The 787 according to that site has a 22% fuel efficiency over the 777-200ER, but my above post is about how the cost translates on a per passenger kilometre basis if the fuel is cheap & one could purchase an older 777 (roughly the same age as AIR's fleet) for a reduced price.

I fully admit I am missing some factors as this was just something I quickly slapped up this afternoon, so would be interested in any additional information out there around the *other* quantifiable cost differences between these two planes (or older vs newer planes).

[biker]

[QUOTE=biker;601998]The fuel efficiency should apply to the 787 not the 777[/QUOTE
Biker I think thats what Gekko was saying "working on a fuel inefficiency of 22% for the 777-200ER"

Ah, quite so Gekko. Read it as efficiency not inefficiency ;-/

[Joshuatree]

keep at it kiwi gekko, it is int; what does a new 787 cost($224 to $264 mill last i looked) .Buy a 777 and refit it cost what $20 mill total , pay it off quick smart and the higher maintenance and fuel costs may be negated against paying off a bank interest etc over a multitude of years. And these planes are often still in service after what 25-30 years?

[slimwin]

The 787 will last you ten years without major work. The old 777 ,less than two...

[winner69]

Way back on this thread I think it was Roger (probably) who said that Chris Luxon told the annual meeting they paid only $150m for their Dreamliners and they're getting 24% better seat mile costs than the 767-300's that they were replacing.

[KiwiGekko]

Way back on this thread I think it was Roger (probably) who said that Chris Luxon told the annual meeting they paid only $150m for their Dreamliners and they're getting 24% better seat mile costs than the 767-300's that they were replacing.

Yes it was Roger, is he still around? From what I have read its quite common for aircraft to be sold at a discount off the list price, so I worked on $150m for the 787's in my above assumptions.

[Joshuatree]

Unless "Roger probably who" ;worked for AIR and had inside info ,what an airline paid for its planes i would have thought to be commercially very sensitive taboo subject ?. Its inevitable competition is and will increase when Airlines are in such a lucrative sweet spot we are in. Its conceivable that all these incredibly cheap older planes could compete despite maintenance and higher fuel costs; be int to see your finished spreadsheet kg.

AIR I'm hoping will be a good performer for awhile and I'm watching the s/p slowly ,slowly crawl up and it will be testing the last 3 peaks shortly($2.95-$2.99). With such handsome profits coming and similar expectations (look at the number of AIR picks in the 2016 share comp). I hope it overcomes that hurdle in the 4th attempt.We will know shortly.

[KiwiGekko]

The 787 will last you ten years without major work. The old 777 ,less than two...

I'd be keen to know if you have any more information on what maintenance an older 777 might need and how frequently after 10 years. AIR obviously think their older aircraft are worth upgrading spending $100m on refitting the internals as written here: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11349416

Some articles I have read estimate around US $20m to overhaul the aircraft and NZ $12m (so US $8.5m) for an internal refit so have updated my figures now assuming a $36.5m 777-200ER. I would be keen to hear from anyone who might be able to confirm how realistic these figures would be?

[winner69]

Robomo once mentioned about $30m for an E check on a 777 - whatever that is

May help

[brend]

Yes it was Roger, is he still around? From what I have read its quite common for aircraft to be sold at a discount off the list price, so I worked on $150m for the 787's in my above assumptions.

AIR was the launch customer so they got a pretty decent discount and $150mill sounds about right from the ASM. In addition to this AIR acquired 2x787 that was test models at an even better price but unfortunately they are a little bit heavier.

The fuel efficiency are better than expected from Luxon.

The 777 fleet upgrade I believe is now completed and they need as many planes out over the summer break. In terms of the maintenance costs its the D check thats the most expensive.

https://en.wikipedia.org/wiki/Aircraft_maintenance_checks

D checks say $1.5Million to $2million

Might be fair to say the D checks were done on the 777 fleet while getting the refurb done since they did have to gut the plane out to get an extra seat per row in.

[Robomo]

AIR was the launch customer so they got a pretty decent discount and $150mill sounds about right from the ASM. In addition to this AIR acquired 2x787 that was test models at an even better price but unfortunately they are a little bit heavier.

The fuel efficiency are better than expected from Luxon.

The 777 fleet upgrade I believe is now completed and they need as many planes out over the summer break. In terms of the maintenance costs its the D check thats the most expensive.

https://en.wikipedia.org/wiki/Aircraft_maintenance_checks

D checks say $1.5Million to $2million

Might be fair to say the D checks were done on the 777 fleet while getting the refurb done since they did have to gut the plane out to get an extra seat per row in.

My post 4051: A D check takes about 50,000 man hours and cost is about 70% labour, 30% parts. Assuming charge-out rate of $100 per hour that would mean about $8 million for the most expensive D check. Basically, pull the plane apart, check and renew as needed, put it back together again. Planes have a finite life so those with high hours and lots of landings have limited flying time left. The Delta CEO (Anderson) announced he had signed a letter of intent to purchase a 777-200 for $7.7 million but no details on usage, what checks and refurb are needed etc. It would be an intersting question to put to him at the next shareholdrs meeting about how much was spent to get that particular plane into service and how reliable it proved to be once in service.

[Zaphod]

Adding to what's been outlined above, short-haul routes cause the most damage due to jets due to the landing/take-off forces exerted on the aircraft, and metal fatigue caused by much higher numbers of pressurisation/depressurisation cycles.

[Zaphod]

Adding to what's been outlined above, short-haul routes cause the most damage due to jets due to the landing/take-off forces exerted on the aircraft, and metal fatigue caused by much higher numbers of pressurisation/depressurisation cycles.

[Zaphod]

Yes it was Roger, is he still around?

He usually disappears from Sharetrader around December for his well earned break from posting.

[777]

He usually disappears from Sharetrader around December for his well earned break from posting.

Still sitting out his banning sentence I think.

[dobby41]

Roget is currently banned according to his status

[Lewylewylewy]

This site should have a tenure system like US Universities... Once you've been here so long and contributed so much, you can't be banned :)

[skid]

This site should have a tenure system like US Universities... Once you've been here so long and contributed so much, you can't be banned :)

Like most ,Im sure all 3 of you would like to see him back :)

[Joshuatree]

Wrong thread and shaky ground lll.

[Joshuatree]

Just when AIR finally gets to some sort of inflexion point China has a Kublai Khan moment:scared:. So a break through is still so near and yet so far price wise...... reminds me of that soap that had a trailer that said"like the sands of time through an hourglass; these are the days of our Airlives"....

[Joshuatree]

S/P has got to $2.98 ! . This is looking promising for a breakthrough; 4th time lucky ? ......Albeit on light volume but on a mkt down day.What do you see Hoop ; chartists?

[winner69]

Air NZ doing a fantastic job progressively repurposing an expanded ecosystem by laddering up new routes which can only amplify cash flows to unprecedented levels,

Whether its $800m or $1 billion earnings this year Air NZ will be embarrassed by the amount of cash they have generated - potentially 70-80 cents a share, after capex as well. That's operating cash flow well in excess of $1

What will they do with it?

And the share price languishes under $3 ...go figure

[brend]

Air NZ doing a fantastic job progressively repurposing an expanded ecosystem by laddering up new routes which can only amplify cash flows to unprecedented levels,

Whether its $800m or $1 billion earnings this year Air NZ will be embarrassed by the amount of cash they have generated - potentially 70-80 cents a share.

What will they do with it?

And the share price languishes under $3

Can you imagine the headline and the public outcry's how they are being ripped off.....

[skid]

$3 is certainly a resistance but it doesnt mean that it will automatically race off if it gets there--Everyone seems to be convinced of this, but im going to go out on a limb and say it could easily go to $3.01 as still fall back.

It could of course go higher but the point is you cant really count on the magic $3 being the end all (unless enough people with lots of money think it is):)

[Hoop]

S/P has got to $2.98 ! . This is looking promising for a breakthrough; 4th time lucky ? ......Albeit on light volume but on a mkt down day.What do you see Hoop ; chartists?

Hmmm...Life's not a perfect world...For the chartist AIR is being a bitch.
I had a brain fade and decided to buy in a while ago and sold out in frustration with a meagre profit..
Honestly cyclic stocks late in their cycles give me the hebe jebes...They are great winners but also great losers for investors..the secret of success is buying in at the bottom of their cyclical cycle..

Using FA tools to enter on mature cycle cyclicals ???...History shows multiple examples of cyclical/fundamental investing disasters..I used AIR during the 1998 -2002 as an example on this thread last year..

Also to remember is that AIR has gone from 85c to near $3 in 3.5 years (previously (not shown on Chart) AIR spent 4 years (Oct 2008 - June 2012) bouncing around on its bottom end of its cycle)......Therefore we are not buying in at the bottom of AIR's cyclical cycle

What we don't know is whether AIR has reached it's top end of the cycle...

Does the chart help make a decision to buy???
Medium term chart with default indicators shows conflicting signals...TA indicators perform poorly when a share price is non volatile and hover within a 10% trading range for months on end..
There is a definite resistance area at the psychological $3 and the $3.10 chart resistance...Entering into a stock near its major resistance level is risky

Being a TA chartist...AIR is not playing my game so I'll keep out until there's complete breakout...

2 Things to remember ..Don't be greedy and pre-empt a buy in... and.... Patience is a virtue

http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%2005012016.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%2005012016.png.html)

[skid]

and on the fundamental side--its about as good as it gets with cheap oil and NZ being the ''In'' place ATM (how much more upside is left?)
also theres the law of ''when theres a vacume ,it will get filled''(in other words when things get to rosy,a competitor will step in for some of the spoils.--(but I would have not guessed that ATM would get to these lofty heights .so who knows)

[KiwiGekko]

No-one has posted this yet, so thought I would put it here in case anyone missed it: https://twitter.com/Benyaminismail/status/685768452162719744/photo/1

If it is NZ (where else has millions of sheep?) I would expect expect the sheeple as Roger would call them to sell. Could this mean a decline from what has been a glass ceiling of ~ $3 or perhaps this is a buying opportunity for people wanting to top-up before the price takes off?

DISC: Not Holding.

[Joshuatree]

Couta was the lover of "sheepie" as i remember it.
Hows the spreadsheet going kg be int to see it.

Why high oil prices are actually good for airlines - Yahoo ... (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0ahUKEwjz-cfdgZ_KAhWhdKYKHaG9BK4QFgg2MAQ&url=http%3A%2F%2Fnews.yahoo.com%2Fwhy-high-oil-prices-actually-good-airlines-153139473--finance.html&usg=AFQjCNEh_Vd8cB4tA0lHXGheoBVkB7kPdA&sig2=2ud54ktl164iqjkrsmkoHg)

[KiwiGekko]

Couta was the lover of "sheepie" as i remember it.
Hows the spreadsheet going kg be int to see it.

True he was my bad.

I have to finish it off & back to work tomorrow *sigh* - I haven't found any other concrete answers on costings though, so was really wanting to see a bit more info from Delta on that aircraft they bought & to see if any others cropped up. Will try and get it tidied up for some feedback shortly.

KG.

[Kelvin]

No-one has posted this yet, so thought I would put it here in case anyone missed it: https://twitter.com/Benyaminismail/status/685768452162719744/photo/1

If it is NZ (where else has millions of sheep?) I would expect expect the sheeple as Roger would call them to sell. Could this mean a decline from what has been a glass ceiling of ~ $3 or perhaps this is a buying opportunity for people wanting to top-up before the price takes off?

DISC: Not Holding.

This route will be Kuala Lumpur - Auckland via Gold Coast daily on A330-300 aircraft. Massive amount of capacity being added on this route with 377 seats on each plane.

[Leftfield]

Oil headed for $20 per barrel??
http://www.bloomberg.com/news/articles/2016-01-11/morgan-stanley-sees-20-a-barrel-oil-on-u-s-dollar-appreciation

Got to be good for AIR and NZR

[theace]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11572572

It would be great if AirNZ had a code share on this!

[kiwichick]

Soooo close to $3 now. Was $2.995 a moment ago - just dropped back to $2.990. It will be interesting to see what happens if the threshold is breached. Will it be clear skies ahead as many on this forum believe, or will it continue to waver up and down?

[brend]

Soooo close to $3 now. Was $2.995 a moment ago - just dropped back to $2.990. It will be interesting to see what happens if the threshold is breached. Will it be clear skies ahead as many on this forum believe, or will it continue to waver up and down?

Will most likely waver up and down with market volatility at the moment.

Hopefully half year results will be the next trigger to send it over $3 - I was telling myself this last year though.

[WingingIt]

7796

Is this the start of a rocket upwards?

[dobby41]

Is this $3 some magical number?
Once released from the snare the sky's the limit?

[Kelvin]

AT $3.005 now!


http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11572572

It would be great if AirNZ had a code share on this!

There most likely will be, along with Virgin Australia. AIR already have a partnership with SQ on the Auckland and Christchurch routes

[Hoop]

Oil headed for $20 per barrel??
http://www.bloomberg.com/news/articles/2016-01-11/morgan-stanley-sees-20-a-barrel-oil-on-u-s-dollar-appreciation

Got to be good for AIR and NZR

I see low oil prices as sprinkling fish food into a stream..The big fish get the most benefit, the remainder floats around and attracts more fish that weren't there to begin with...I think AIR is not classed as a big fish.

Airlines V Oil correlation is not good...Recessions kills both Cyclical Airlines and Oil prices which upsets any (false) "logical" conclusions that correlation exists ....If we think this time the Oil price is not a reaction to negative Global economic growth...then perhaps there "could" be a hint of correlation.

The chart below illustrates AIR's relationship with Oil..Its a pity there is no very long term freely available chart data to validate accurately the relationship.
...also...
AIR is testing the psychological $3.00 Resistance
The $3.00 resistance theory (chart) v Practical (Depth)...the depth shows the charted resistance line is quite strong..
The cyclical resistance is not far away...

If AIR is not a true cyclical* (Averaging positive Organic growth within its market environment over decades) then the cyclic resistance could be under threat

*...True Cyclical companies grow strongly during good economic times and shrink strongly during bad economic times...net result over time = no
overall growth (flat line, no trend)

http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%20v%20oil%2011012016.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%20v%20oil%2011012016.png.html)

[Hoop]

AT $3.005 now!...............


Is this $3 some magical number?
Once released from the snare the sky's the limit?

No...$3.11 is the primary resistance then its blue skies..
The depth $3.00 resistance is now gone...
This theoretically means lower risk to buy...as $3.00 now becomes a support..so the risk v reward equation becomes more favourable..
However the reward side of the equation is still low as the cyclical (primary) resistance is still there..

Its all to do with safer investing...You lose the opportunity for big gains at high risk and replace it with smaller gains with lower risk

Disc: dipped my toes in..bought a small parcel...viewed as possible short term (hold until sell signals)

[WingingIt]

Hoop, is that ANZ securities that you get the recent trades info from?

[Marilyn Munroe]

It would be great if AirNZ had a code share on this!

Are there enough chaps travelling on government money to fill an A330, is the runway at WLG long enough for an A330?

I think Cullen Airlines and Queer and Nasty Airlines would have already run the ruler over a WLG --> CBR service and gone "yeah nah".

Boop boop de do
Marilyn

[workingdad]

lie flat premium class seats and budget economy ones.... some more competition for air nz from march.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11572678

[Hoop]

Hoop, is that ANZ securities that you get the recent trades info from?
...Yes.....

[Joshuatree]

The s/p doesn't signal strong confidence atp and other brokers have t/p's from $2.80 to $3.03. Anyone got other broker reports?Time will tell re if are they "usually" right or" seldom".Craigs have re 7 Airline stocks ahead of AIR in target prices atm.With oil prices staying low , it certainly helps. Not a high conviction stock for me atp but holding with a good margin of safety atm , price purchasewise.Then theres things like terrorism alerts to worry about, unfortunately.

Have laboured through the pricing then 18/11/15 and the share pricing now of re 22 Airlines

AIR has performed in 6th place with re +5% QAN re +5.4%

12 of the Airlines have negative returns

AIR FRANCE the highest return re +21% LUFTHANSA
next with re +12%

Bottom is AIR CHINA,CHINA EAST<CHINA SOUTH -23 to -25%

3 USA Airlines negative Delta AAL UAL

LOW COST RYAN AIR +6.7% EASY JET +1.75%

[winner69]

Have laboured through the pricing then 18/11/15 and the share pricing now of re 22 Airlines

AIR has performed in 6th place with re +5% QAN re +5.4%

12 of the Airlines have negative returns

AIR FRANCE the highest return re +21% LUFTHANSA
next with re +12%

Bottom is AIR CHINA,CHINA EAST<CHINA SOUTH -23 to -25%

3 USA Airlines negative Delta AAL UAL

LOW COST RYAN AIR +6.7% EASY JET +1.75%

Lot of looking up ...add value to the output by saying what you think it all means.

Be interested in your conclusions

[Joshuatree]

More comp for AIR from singapore airlines

Read more » (http://sendy.tarawera.co.nz/l/QQMrKma8h6MjbHw96gBRew/zV763FmPyPUM5VgqH0MMk46A/6763W7alrt4Z1HRck72rs4lQ)

[vin]

$2.95, wish it would break through and stay broken!

When's Roger back :(

[dobby41]

When's Roger back :(

Would that be Roger the AIR whisperer?

[pierre]

$2.95, wish it would break through and stay broken!

When's Roger back :(

299.5 - nearly there. Maybe Roger is giving it a bit of a shove somewhere in the background.

Keep pushing Rog- see if you can tip it over $3.00 by end of play today!

[blockhead]

Down the end of the runway and clearing the lowlands, small amount of turbulence but should be comfortable cruising to .....???? where ?

[pierre]

Got to 301 - but struck unexpected headwind and dropped back to 300.

A couple of keen buyers at that level so might head northwards again by end of the day. Hope you're all buckled in for an exciting ride!

[pierre]

Got to 301 - but struck unexpected headwind and dropped back to 300.

A couple of keen buyers at that level so might head northwards again by end of the day. Hope you're all buckled in for an exciting ride!

Yeeha! AIR now at 301.5! Looks like we might be through the barrier and onwards and upwards from here.

Pity Roger isn't around to share in the joy on ST (and ramp it up even further) - but no doubt he'll be celebrating with a quiet one or two this evening.

[winner69]

No...$3.11 is the primary resistance then its blue skies..
The depth $3.00 resistance is now gone...
This theoretically means lower risk to buy...as $3.00 now becomes a support..so the risk v reward equation becomes more favourable..
However the reward side of the equation is still low as the cyclical (primary) resistance is still there..

Its all to do with safer investing...You lose the opportunity for big gains at high risk and replace it with smaller gains with lower risk

Disc: dipped my toes in..bought a small parcel...viewed as possible short term (hold until sell signals)

Hoop, agree with your comments in general.

But don't fully agree with your comment that the reward side of the equation is low (re AIR this time around)

Whilst AIR is cyclical and will sometime in the future reflect that with lower profits and a share price back to $2 or less the current fundamentals are so strong that the share price cold easily go to $4 or higher (now that the $3 barriers is probably breached)

So I see current situation as low risk high reward .....but don't forget o bail when the cycle turns. Remember the markets giveth but the market also taketh away

Still need to see if $3 holds over the next day or two ......but been solid buying already at $3 and above and that's a good sign. Psychological barrier gone, punters are happy.

[biker]

Also nice to see VAH firming a little - up 10% since Christmas- which won't be doing AIR any harm.

Disc. Hold AIR and VAH

[Hoop]

Hoop, agree with your comments in general.

But don't fully agree with your comment that the reward side of the equation is low (re AIR this time around)

Whilst AIR is cyclical and will sometime in the future reflect that with lower profits and a share price back to $2 or less the current fundamentals are so strong that the share price cold easily go to $4 or higher (now that the $3 barriers is probably breached)

So I see current situation as low risk high reward .....but don't forget o bail when the cycle turns. Remember the markets giveth but the market also taketh away

Still need to see if $3 holds over the next day or two ......but been solid buying already at $3 and above and that's a good sign. Psychological barrier gone, punters are happy.

Yeah Winner you're right..The reward side doesn't alter when the price teeters around resistances/supports
I got 2 discrete PM's as well wondering what the hell was I on about...one even wondering why I bought as well ...right on the resistance at $3.01 ($3.02) after all my preaching about shouldn't buy near resistance levels...
Yes the risk is lower today at close with the psychological $3 cracked...
Low risk now???...not sure... still has the chart 3.01/3.02 resistance but the depth tells us that resistance is weak but it is a TA threat..The cyclical resistance at $3.11 isn't in play yet so we don't know how strong it is or if it still exists after all these years...
As usual time will tell..

AIR closed today up 6.5c to $3.015 on reasonably good volume

Hmmm yesterday....Investor brain dysfunction + finger on buy button = not a good combination.

Disc: entered with small parcel yesterday at $3.01 (totally mistimed the day's buy in as well:p)

[Joshuatree]

Have laboured through the pricing then 18/11/15 and the share pricing now of re 22 Airlines

AIR has performed in 6th place with re +5% QAN re +5.4%

12 of the Airlines have negative returns

AIR FRANCE the highest return re +21% LUFTHANSA
next with re +12%

Bottom is AIR CHINA,CHINA EAST<CHINA SOUTH -23 to -25%

3 USA Airlines negative Delta AAL UAL

LOW COST RYAN AIR +6.7% EASY JET +1.75%

Forgot about Virgin;VAH is up re 11% in that time biker..

I did this comparison for myself but chucked up here in case it was useful .
Very volatile times esp through that time slot so taken with a big grain of salt.

Take out the chinese airlines because of that and, for some reason the airlines ;seemingly in a pretty good space aren't performing; with a few exceptions. I don't know why and thats been the puzzle for AIR too just not overcoming resistance in these low & getting lower fuel price times. You'd think the profits would be well and truly flowing big(as has be advised) and the s/p following.

One thing i can think of , is as i posted a few threads above as fuel prices drop barriers to entry do too and competition intensifies and margins will drop. but it seems too early for this and it seems most airlines are (ignoring current volatility)all not yet performing; go figure. Maybe its some delayed timing and they're all about to take off as the AIR price is teasingly doing as it may be finally breaking through as others are commenting on. I will believe when i see it. I often miss gaps so please fill in your thoughts. cheers JT

[Hoop]

Joshuatree ...some of your mentioned airlines are here...
The chart below is the "so-called";) Global Airline index.....the perception of falling oil prices being a positive effect on Airline share prices is not noticeable here....in fact the bull cycle is looking suspect.
http://i458.photobucket.com/albums/qq306/Hoop_1/Airline%20index_1.png (http://s458.photobucket.com/user/Hoop_1/media/Airline%20index_1.png.html)

[Joshuatree]

Yeah looks terrible HOOP although USA centric not the full picture. Competition and falling passengers (falling numbers:)? Or plain Vanilla bad Global/ China sentiment ,chicken littles sky falling?

[winner69]

The $3 mark is a long standing resistance level.

One close above $3 doesn't mean it's been broken through. It needs to consolidate for a few days/weeks around $3 before (psychological) punters will feel comfortable.

Yesterday might be as high as the AIR share price goes. After all it is seen as a cyclical stock.

Then again what is AIR going to do with 70/80 cents of free cash flow - jeez 50 cents or more in dividends would make $3 look ridiculously cheap eh.

Fascinating how this plays out

[pierre]

The $3 mark is a long standing resistance level.

One close above $3 doesn't mean it's been broken through. It needs to consolidate for a few days/weeks around $3 before (psychological) punters will feel comfortable.

Yesterday might be as high as the AIR share price goes. After all it is seen as a cyclical stock.

Then again what is AIR going to do with 70/80 cents of free cash flow - jeez 50 cents or more in dividends would make $3 look ridiculously cheap eh.

Fascinating how this plays out

You're spot on Winner - a lower opening price today at 300. I think AIR will hover slightly above or below the $3.00 mark until the juicy dividend gets closer, then we're bound to see some real action on the SP.

Whether to sell before or after the payout - that's the question. I guess the answer will depend on the commentary from the company on how all those new routes are going, impact of oil prices and intensity of the competition.

Meanwhile, I'm doing my bit to hold up the SP with trips to LA/Houston in April and UK in August/September. May do more depending on how big the dividend is - lol.

[winner69]

AIR hanging in there even with the carnage going on around it

That's a good sign

[Hoop]

The $3 mark is a long standing resistance level.

One close above $3 doesn't mean it's been broken through. It needs to consolidate for a few days/weeks around $3 before (psychological) punters will feel comfortable.

Yesterday might be as high as the AIR share price goes. After all it is seen as a cyclical stock.

Then again what is AIR going to do with 70/80 cents of free cash flow - jeez 50 cents or more in dividends would make $3 look ridiculously cheap eh.

Fascinating how this plays out

Yes it will be fascinating..and maybe we will see the beginning of that play next month..not long to wait...

Hmm..Query....6 Dreamliners would cost 70/80c/share plus more..

I see AIR has 6 on order (https://en.wikipedia.org/wiki/List_of_Boeing_787_orders_and_deliveries)..Whats the system about payment Winner? Is there any up front payment on these orders....how does this system work?

[777]

Some will be leased.

[mikeybycrikey]

Yes it will be fascinating..and maybe we will see the beginning of that play next month..not long to wait...

Hmm..Query....6 Dreamliners would cost 70/80c/share plus more..

I see AIR has 6 on order (https://en.wikipedia.org/wiki/List_of_Boeing_787_orders_and_deliveries)..Whats the system about payment Winner? Is there any up front payment on these orders....how does this system work?

On page 14 of the annual results analyst presentation (https://www.nzx.com/companies/AIR/announcements/269077), they outline their planned future capital expenditure.

Looks like $2.6 billion over the four years 2016-2019. Seems to be front loaded, with about $750m this year (which I guess is FY 2016 not CY2016).

Also according to that information, there should be delivery of 3x 787-9, 3x A320 and 6x ATR 72-600 this year and 3x 787-9 next year.

[jetski1999]

sold today took my profit off the table, i will still follow AIR as one of my favorites may buy back in at a future date

[pierre]

Story below is from todays NBR Online:


"Air New Zealand faces increased competition on hotly contested transtasman routes as cheap fuel costs encourage airlines to add capacity and new routes, and dust off older, less efficient planes, helping to drive down fares.

AirAsia X is to start flying from Auckland to Kuala Lumpur via Australia's Gold Coast from March 22. Its introductory $99 fare between Auckland and the Gold Coast has sold out for March 22 and is selling fast on other days they're available, the AirAsia website shows.

The cheapest Air New Zealand flight on that route for March 22 is $242, according to the Webjet website.

The transtasman market is the most competitive for Air New Zealand, and rivalry is increasing, with reports its Star Alliance partner Singapore Airlines is to begin direct flights between Canberra and Wellington and indications it is unlikely to code-share with the national carrier on that leg.

Air New Zealand lost market share on transtasman routes in the June 2015 year, according to a First NZ Capital report. The market grew 6.9% in the 12 months to June, more than three times Air New Zealand's passenger number growth, trimming the airline's share by 1.7 percentage points to 35.7%.

That trend shows in the 2015 accounts for Qantas Airways' Jetconnect unit, which operates the Australian carrier's transtasman routes. The division's revenue climbed 21% to $91 million in the year ended June 30, 2015.

"This isn't going to be a game-changer for Air New Zealand – this type of competition is ongoing," says Rob Mercer, head of private wealth research at Forsyth Barr. "We are going to see airfares come down over the next 12 months and we are going to see airlines look to put into service a fleet which can now be competitive on long-haul routes."

International travel costs drop
Government data shows international air travel prices fell 4.2% in the year ended June 30, 2015, and are 21% lower than their peak in the fourth quarter of 2008.

The ever-decreasing price of oil – which this week fell below US$30 a barrel for the first time in 12 years – is positive for Air New Zealand. Jet fuel represents around 25% of the airline's pretax cost base, according to Forsyth Barr.

Cheap fuel gives greater capacity for extra flights, with airlines more likely to fly across the Tasman if the alternative is leaving the plane on the ground, Mr Mercer says.

The Wellington-Canberra flight, which would be the first between the two countries' capital cities, would be an add-on to a Singapore-Canberra direct connection, the first time the Australian capital city would have been serviced by a direct long-haul international service. An official announcement is expected next week.

"The cost of fuel is a lot cheaper, so you can just put capacity between New Zealand and Australia, even though it's not a service which is necessarily profitable," says Mr Mercer, with cheaper fuel also making older aircraft more competitive.

"All new aircraft are based on being 25% more fuel efficient," he says. At $US100 a barrel, "25% is $25 – at $30, 25% is only $7.50. The long-haul routes have potential capacity competition coming on, as airlines will look to put into service the 747s again, which were becoming less competitive on the leg between Asia, New Zealand and the US."

However, Mr Mercer says Air New Zealand's alliances with Cathay Pacific, United Airlines and Singapore Airlines on long-haul routes means the airline is in good shape to work with key carriers and manage the pressure that might eventuate as a result of low fuel prices.

Air New Zealand's shares climbed 20% in 2015, a year when an oversupply of oil pushed global fuel prices lower. The stock has gained about 2% this year, while declining 0.5% to $3 today.

The shares are rated an average "hold" based on six analyst recommendations compiled by Reuters, with a median target price of $3.13."

[Joshuatree]

Why high oil prices are actually good for airlines - Yahoo ... (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0ahUKEwjz-cfdgZ_KAhWhdKYKHaG9BK4QFgg2MAQ&url=http%3A%2F%2Fnews.yahoo.com%2Fwhy-high-oil-prices-actually-good-airlines-153139473--finance.html&usg=AFQjCNEh_Vd8cB4tA0lHXGheoBVkB7kPdA&sig2=2ud54ktl164iqjkrsmkoHg)

Its the only thing i could come up with; competition and its Global.

[GuessX]

Shooting off this morning - there's that resistance broken that we've been feeling.

[winner69]

Shooting off this morning - there's that resistance broken that we've been feeling.

Hopefully so

Fundamentals point to a much higher share price


But remember AIR is an cyclical and an airline to boot so sentiment can change quickly so keep a close eye on. We should be ok for the next few months though

[Poet]

Good to see 3.065 -hopefully permanently above $3 now. Half year report only a month away. I wouldn't be surprised to see guidance for higher hy and maybe fy profit when the December monthly stats are released in the next few days.

[vin]

3.090.. new highs..

[samdaman]

Tempting to take it off the table... Anyone got some estimates on the annual EPS forecasts? I know Roger has quoted em before but I can't seem to find them. P.S go AIR you good thing go!

[winner69]

I think history is about to repeat itself

The share price moved from $3.20 in Jan 1991 to $16.22 in Jan 1994

Yep up 5 times in 3 years - history does repeat itself sometimes doesn't it

Might do it again .....you ever know

Where we are today we been before

[winner69]

Tempting to take it off the table... Anyone got some estimates on the annual EPS forecasts? I know Roger has quoted em before but I can't seem to find them. P.S go AIR you good thing go!

Hi Sam - where you been

Somewhere back in the archives is Rogers forecast for this year - pretty sure it was for EPS to be 65 cents odd (PE less than 5 at the mo)

PS - actually it was 64.2 cents first time around. Since then monthly stats have been good and tourism numbers ever increasing so probably even more bullish now .

[samdaman]

Hi Sam - where you been

Somewhere back in the archives is Rogers forecast for this year - pretty sure it was for EPS to be 65 cents odd (PE less than 5 at the mo)

Are you serious?????? Oh my. It's no longer tempting to take it off the table :D go Air go!

[PartTimeTrader]

Airlines are reaping huge profits right now, almost doubling their profits compared to prior year. Even if oil prices stay low, competition will drive down those margins over time.
I would be real careful valuing a company based on short term abnormal earnings results. Even the crap airlines are making profits right now.

[winner69]

Okay some preliminary calculations. Key point is the company has stated they are on track to EXCEED $400m before tax in the first half and that's BEFORE the positive contribution expected from Virgin.
I have assumed $430m inclusive of the Virgin contribution which is up ~ 100% on last year's $216m.

Last year with the route expansion into Singapore in the second half AIR earned just 43% of its profit in the first half. This year we have two new routes and the company is extremely bullish on sales demand on those routes and is on record as saying they'll be profitable from day 1.

Further, in this first quarter they still had some residual fuel futures contracts to work through at historical and less favourable rates. This won't be repeated in this quarter or the second half.

Nobody can reliably predict where fuel costs and exchange rates will go but based on the current rates for same being maintained this year I see no reason why with the two new routes and greater demand in the peak summer and autum seasons why the company won't make a very similar percentage of its annual profit for FY16, (57%), in the second half as it did last year.

On this basis my preliminary estimate for FY16 net profit before tax is thus $1b ($430 / 0.43) translating after full provision for company tax at 28%, (they seldom pay the full tax rate for a range of taxation reasons) to net profit after tax of $720m and based on 1,121m shares on issue this gives 64.2 cps.

I know that figure seems outrageously high but that's what the company is implicitly guiding towards based on best known currently available information.

Further, in FY17 they'll enjoy a full 12 months of the new routes (7 months this year) both international and increased capacity and frequency on domestic and with low international economic growth I see the IMF predicting we'll still have oil at $55 barrel during calendar year 2017 so assuming the currency and oil are stable around their present level's I see no visible reason at this stage why we can't enjoy 60 cps + EPS in FY17.

Going forward from there and assuming oil reverts back to $80-$100 barrel and the currency around 70 cents I see EPS of 50 cps being sustainable. Apply whatever PE you like but I'll use 11 so I can see the stock over $5 within two years when the market finally wakes up to what a massive cash flow machine this company is. $1b cash flow last year, nearly $1 a share !!

On this basis I estimate the shares are trading on a forward PE of only 4.3 for FY16. In my experience when companies are trading on ludicrously low PE's a lot of money can be made. Sure there are risks to the downside and upside but this is my best estimate of EPS at this stage.

DYOR but for what its worth I have tripled the size of my shareholding since yesterday's meeting. I think this is the stand-out opportunity on the market and the opportunities for special divvies in the years ahead along with capital price appreciation make this a compelling investment opportunity. I think the stock should currently be trading at close to or in excess of where QAN is presently priced.

I've been investing for about 30 years now and by my reckoning you'd be doing well to find a company that's better managed than this one. Directors and senior management are doing a stellar job and we are extremely well served by them. Its a true mark of the directors professionalism that despite the company growing profits strongly over the last three years and looking to approximately double last year's record profit this year they refused to take any increase in directors fees, simply enlarged the pool slightly for additional directors in the future. This company didn't win the Deloiite company of the year last year without very sound reasons, likewise Tony Carter Chair person of the year.

The company is extremely bullish on their outlook and so am I.

I'll post the other questions and answers later when I have more time.

Sam - above is Rogers post

The 64 cents (is NPAT) doesn't include anything Virgin might contribute so likely to be higher

I hope (if he is lurking and notices) he doesn't mind me bringing it to your attention.

[samdaman]

Cheers winner, I'll keep it in mind PTT

[777]

Virgin

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11574452

[Yeshiva]

I apologise in advance if this has been asked already, but why is such a profitable company trading at such a low P/E? Is the risk from terrorism or accident weighing heavily on all airline stocks, or is it simply that this industry demands a much cheaper P/E multiple?

[Baa_Baa]

I apologise in advance if this has been asked already, but why is such a profitable company trading at such a low P/E? Is the risk from terrorism or accident weighing heavily on all airline stocks, or is it simply that this industry demands a much cheaper P/E multiple?

Interesting article in NBR sheds some light on that question, of the low PE.

"Virgin's valuation is expensive compared with Qantas Airways and Air New Zealand, trading at a multiple of six times earnings before interest tax, amortisation and rent/restructuring costs (ebitdar), compared with the global average of 4.6 times." http://www.nbr.co.nz/article/brokers-first-analysis-sees-virgin-australia-fully-valued-b-183609

Going to be an interesting week with AIR impressively breaking UP through double top $3.02 resistance but stalling under the 10 year high @ $3.13 closing $3.08 on historically average volume (better if it had busted out on huge volume). Especially with the international markets taking a hammering, hopefully AIR continues to have antigravity tomorrow.

[Raz]

Price to me is attractive so partly sold down last week....not sure we will be granted a special dividend...even if they did... ironically I would not be spending it this year with AIR NZ. I'm finding their deals very limited of late ...personal experience tells me they are being greedy with their margins..all good if they are keeping their load factors up however i have for the first time this year found far superior offers from their competitors. As a result, will not being doing any serious international travel with them in 2016..first time in 20 years. If they can afford to lose a client like me one would hope they have serious demand that it simply doesn't matter...

[Jantar]

....As a result, will not being doing any serious international travel with them in 2016..first time in 20 years. If they can afford to lose a client like me one would hope they have serious demand that it simply doesn't matter...
I will probably be booking with Virgin for my next trip to Brisbane. They are considerably cheaper than AIR for the dates I want to travel, but would still be on exactly the same aircraft.
My Europe trip next year is likely to be with Lufthansa. Again it will be on the same aircraft (AirNZ to LAX, then DLH to Munich), but at a cheaper price.

[noodles]

I apologise in advance if this has been asked already, but why is such a profitable company trading at such a low P/E? Is the risk from terrorism or accident weighing heavily on all airline stocks, or is it simply that this industry demands a much cheaper P/E multiple?

A pe ratio is based on NPAT. Given the depreciation component of the NPAT calculation, the current pe is lower than it should be due to relative low depreciation charges vs capex charges. So I would ignore NPAT and focus on free cashflow. As an exercise, you should check out the historical free cashflow of AIR. You might be a bit shocked.

Broker analysts base their analysis on DCF (free cashflow). This is much more suitable to airlines given the capex required to run the business. Analysts have a price target of about 3. So according to analysts, the current price is about right. But analysts have not updated their DCF models since October last year and have not accounted for the massive drop in fuel price. I'm expecting price targets to increase when research is updated due to the fuel price.

[Snow Leopard]

The great thing about the current environment for airline operations is that you can be reasonably sure of certain things (there is no absolute certainty):

1) The current price of oil is regarded as unsustainable and will rise. But when and by how much is unknown, but if you are taking a longer term view then you use, say, US$80 a barrel as your guide. Of course the actual $/bbl price at any date is a complete guess.

2) When airlines are making good profits they expand their operations, new airlines and even new business models appear, competition intensifies, fares start to fall and profit margins get cut. This is already happening - factor it in.

3) The unexpected happens and it is usually not good - you should expect and allow for this.

4) It often ends in tears.

Best Wishes
Paper Tiger

Discs:
Buy the best fit of schedule and price - flying is a commodity and there is little brand loyalty.
Have flown with at least 9 different airlines in the last 12 months and am booked to fly with another 3 in the near future.

[skid]

And there you have it--The balance sheet is looking good ,but even shareholders are going elsewhere and reckon they(AIR)are getting greedy.
I totally agree with that ,for the most part ,there is little brand loyalty,and why should there be if you get better comfort at a cheaper price?(you can still even rack up air points with a partner airline)

Glad to see holders doing well,but I also will be looking elsewhere for travel deals(Its not like they are gold star anyway-Id far rather be on Singapore-Thai-Emirates)

Everyone is doing well with cheap oil--but there are rumblings of discontent over on Mordor(USA) so it pays to have a backup plan.
Its a good idea to keep reviewing whether this is a ''keeper''

[brend]

And there you have it--The balance sheet is looking good ,but even shareholders are going elsewhere and reckon they(AIR)are getting greedy.
I totally agree with that ,for the most part ,there is little brand loyalty,and why should there be if you get better comfort at a cheaper price?(you can still even rack up air points with a partner airline)

Glad to see holders doing well,but I also will be looking elsewhere for travel deals(Its not like they are gold star anyway-Id far rather be on Singapore-Thai-Emirates)

Everyone is doing well with cheap oil--but there are rumblings of discontent over on Mordor(USA) so it pays to have a backup plan.
Its a good idea to keep reviewing whether this is a ''keeper''

What exactly is this perception of greed? The shanghai route I take annually has seen standard fares drop over the last year from $850 one way to $750ish.

Sale price is $609 one way. Normally the sale price is $649.

[Hoop]

AIR fallen 6c this morning to 302c...and has stopped falling.......
AIR testing its 302c new support...that's usually a 2nd chance buy in opportunity for the AIR believers...Nice:)??


EDIT:
I thought it prudent to add an Disc edit

Disc: dipped another toe into the water @302.5c

[winner69]

What exactly is this perception of greed? The shanghai route I take annually has seen standard fares drop over the last year from $850 one way to $750ish.

Sale price is $609 one way. Normally the sale price is $649.


Seen AIR's global new year sale which has been advertised for well over a week?

L.A. for $559 Buneos Aires for $699 e.t.c.

lowest prices i've seen for years.


Paper Tiger is right - when things are good everybody wants to play ....but the strong ones will continue to do well and win through and come out in a stronger position. AIR is one of the strong ones

[Beagle]

Last year we had strong capacity growth of 6% which to the surprise of some analysts given the soft economic conditions was matched by demand growth of 6%.
This year our airline is growing at its fastest rate in its 75 year history with capacity growth of 12% and despite this revenue passenger kilometres flown are actually up 12.2% with YTD group wide load factor very strong at 84.2% up 0.6% from 2015. (November 2015 operating stat's)

Management was so confident of the performance in this half that way back in early October 2015 at the annual meeting they predicted 1H Fy16 profit would exceed $400m. This seems very early in the half year to make such a bold projection and caught most people I talked to at the ASM by surprise. They must be extremely confident.

Since the annual meeting we've seen load factors being announced that exceed last year, very strong tourism growth of 9%, well up on last year and very strong outbound tourism growth, Kiwi's are travelling more and taking advantage of cheap fares, e.g. their New Year sale fares look very reasonable to me as noted by Winner above.

Since their last fuel hedge disclosure of 24 November 2015 where they announced they were only 40% hedged too 2H Fy16 fuel costs we've seen Brent spot come down from $46 barrel to just on $30.
Based on best known information in the peak summer period AIR will be enjoying very low fuel prices as they embark upon their new routes to Buenos Aires and Houston so the cash register is clearly in overdrive at present.

What to do with all that cash ?
Last year cash flow from operations was a remarkable $1.1b, just on $1 per share ! Tony Carter after the ASM mused that perhaps this is the highest operating cash flow of any NZX company ?
Yes they have a $2.6b fleet upgrade program over the next 4 years but normal depreciation with the expanded fleet size will be approx. $1.8b over this period so by my estimation so that's really only a net outlay in the order of $600m after fleet disposal proceeds from the 767's and Beechcraft 1900's. Further, some of the new acquisitions will be by way of operating lease not purchase.
But wait there's more ! Some of the cost of the two Dreamliner's that came online in early FY16 was funded by up-front payments in FY15 and they specifically mentioned they'd made more advanced payments on these aircraft (implying more than normal), to gain further discounts from Boeing so the politically correct speak of $2.6b of new fleet isn't really going to drain cash flow at all !
Begs the question of the size of the special dividend this year. Previous year's, when announced have been 10 cps but I suspect that doesn't cut the mustard any more and we'll see something considerably higher.

Yes Oil prices are not sustainable over the long run at these level's but the outlook looks benign to me. Almost zero world-wide economic growth so where is the demand going to come from to drive oil back up ? Even if it does revert to $70 or $80 barrel in the medium term the company is well positioned with a modern fuel efficient fleet and might actually gain a competitive advantage with oil at that level.

So that brings me to my musings of what does the statement in early October of company will exceed $400m for 1H Fy16 really mean.

$400m looks very, very conservative to me. I'd be surprised if the first number wasn't a 5. Anyway we can talk all we like but some of you might be wondering what I've been doing as actions speak louder than words. I was topping up in the low 290's while in Siberia...the thought of all those future juicy dividends kept me very warm :)

I am hoping for an interim dividend of 15 cps up from 6.5 cps and final of 20 cps up from 9.5 cps together with a special of 20cps, (all fully imputed). Stock trades cum the forthcoming interim dividend and I think the SP remains very well supported by the fundamentals of what is a very well managed airline. Further, I believe contrary to the view stated by some, that many Kiwi's are very parochial and chose to fly their national airline. I also believe that AIR as one of N.Z.'s preeminent employers are able to pick and chose the cream of the crop when it comes to employees and the calibre of the staff you meet on board reflects that.

[Onion]

While in Siberia ...

Welcome back from your holiday Roger. It's good to see you didn't become a permanent Gulag resident.

[QOH]

Yes welcome back Roger, I for one have missed you.

[Raz]

Seen AIR's global new year sale which has been advertised for well over a week?

L.A. for $559 Buneos Aires for $699 e.t.c.

lowest prices i've seen for years.


Paper Tiger is right - when things are good everybody wants to play ....but the strong ones will continue to do well and win through and come out in a stronger position. AIR is one of the strong ones

The dates noted for above deals are very limited, an example is a difference of 30-50% in price for school holidays when we booked for one particular trip. I really posted to see what others consumer reaction would be and clearly what we expect to be more sticky customers for AIR in reality an't that sticky. The grey heads will be loyal however I think that Air will have their challengers over 2016, the exchange rate for many does really increase the overall cost of a trip so Aussie will be in favour with the discounted flights...not much in that for AIR... will keep an eye on load factors. Still if the price keeps dropping will buy in again with a tidy profit:-)

Rodgers comments are appreciated! Just have to consider the political factor to declare a bumper dividend me thinks.

Although the comment re quality of staff is pushing it somewhat as is the reference to employer relations when you consider staff comments on glass door...rather mixed at best!

[skid]

Seen AIR's global new year sale which has been advertised for well over a week?

L.A. for $559 Buneos Aires for $699 e.t.c.

lowest prices i've seen for years.


Paper Tiger is right - when things are good everybody wants to play ....but the strong ones will continue to do well and win through and come out in a stronger position. AIR is one of the strong ones

If AIR adjusts its prices and becomes competitive the of course everyone will give it serious consideration--simple as that(but unless the planes are not full, and the cheaper prices fill them the balance sheet will suffer a bit --its a catch 22.

[skid]

Last year we had strong capacity growth of 6% which to the surprise of some analysts given the soft economic conditions was matched by demand growth of 6%.
This year our airline is growing at its fastest rate in its 75 year history with capacity growth of 12% and despite this revenue passenger kilometres flown are actually up 12.2% with YTD group wide load factor very strong at 84.2% up 0.6% from 2015. (November 2015 operating stat's)

Management was so confident of the performance in this half that way back in early October 2015 at the annual meeting they predicted 1H Fy16 profit would exceed $400m. This seems very early in the half year to make such a bold projection and caught most people I talked to at the ASM by surprise. They must be extremely confident.

Since the annual meeting we've seen load factors being announced that exceed last year, very strong tourism growth of 9%, well up on last year and very strong outbound tourism growth, Kiwi's are travelling more and taking advantage of cheap fares, e.g. their New Year sale fares look very reasonable to me as noted by Winner above.

Since their last fuel hedge disclosure of 24 November 2015 where they announced they were only 40% hedged too 2H Fy16 fuel costs we've seen Brent spot come down from $46 barrel to just on $30.
Based on best known information in the peak summer period AIR will be enjoying very low fuel prices as they embark upon their new routes to Buenos Aires and Houston so the cash register is clearly in overdrive at present.

What to do with all that cash ?
Last year cash flow from operations was a remarkable $1.1b, just on $1 per share ! Tony Carter after the ASM mused that perhaps this is the highest operating cash flow of any NZX company ?
Yes they have a $2.6b fleet upgrade program over the next 4 years but normal depreciation with the expanded fleet size will be approx. $1.8b over this period so by my estimation so that's really only a net outlay in the order of $600m after fleet disposal proceeds from the 767's and Beechcraft 1900's. Further, some of the new acquisitions will be by way of operating lease not purchase.
But wait there's more ! Some of the cost of the two Dreamliner's that came online in early FY16 was funded by up-front payments in FY15 and they specifically mentioned they'd made more advanced payments on these aircraft (implying more than normal), to gain further discounts from Boeing so the politically correct speak of $2.6b of new fleet isn't really going to drain cash flow at all !
Begs the question of the size of the special dividend this year. Previous year's, when announced have been 10 cps but I suspect that doesn't cut the mustard any more and we'll see something considerably higher.

Yes Oil prices are not sustainable over the long run at these level's but the outlook looks benign to me. Almost zero world-wide economic growth so where is the demand going to come from to drive oil back up ? Even if it does revert to $70 or $80 barrel in the medium term the company is well positioned with a modern fuel efficient fleet and might actually gain a competitive advantage with oil at that level.

So that brings me to my musings of what does the statement in early October of company will exceed $400m for 1H Fy16 really mean.

$400m looks very, very conservative to me. I'd be surprised if the first number wasn't a 5. Anyway we can talk all we like but some of you might be wondering what I've been doing as actions speak louder than words. I was topping up in the low 290's while in Siberia...the thought of all those future juicy dividends kept me very warm :)

I am hoping for an interim dividend of 15 cps up from 6.5 cps and final of 20 cps up from 9.5 cps together with a special of 20cps, (all fully imputed). Stock trades cum the forthcoming interim dividend and I think the SP remains very well supported by the fundamentals of what is a very well managed airline. Further, I believe contrary to the view stated by some, that many Kiwi's are very parochial and chose to fly their national airline. I also believe that AIR as one of N.Z.'s preeminent employers are able to pick and chose the cream of the crop when it comes to employees and the calibre of the staff you meet on board reflects that.

Geez Roger,I knew you were banned ....but Siberia?

PS -I dont think anyone will argue with the balance sheet atm--but I wonder about their marketing strategy and pricing (they can always drop prices if necessary though)

[Snow Leopard]

...
What to do with all that cash ?
Last year cash flow from operations was a remarkable $1.1b, just on $1 per share ! Tony Carter after the ASM mused that perhaps this is the highest operating cash flow of any NZX company ?
Yes they have a $2.6b fleet upgrade program over the next 4 years but normal depreciation with the expanded fleet size will be approx. $1.8b over this period so by my estimation so that's really only a net outlay in the order of $600m after fleet disposal proceeds from the 767's and Beechcraft 1900's. Further, some of the new acquisitions will be by way of operating lease not purchase.
But wait there's more ! Some of the cost of the two Dreamliner's that came online in early FY16 was funded by up-front payments in FY15 and they specifically mentioned they'd made more advanced payments on these aircraft (implying more than normal), to gain further discounts from Boeing so the politically correct speak of $2.6b of new fleet isn't really going to drain cash flow at all !
...

Last year every cent and more of that operating cash flow was spent on 'Acquisition of property, plant and equipment and intangibles', and over the last few years such expenditure has been high. Looking forward a few years then one would expect that there will actually be some reasonable free cash flow as a result of this prior investment, though the timing of payments for assets and of any special dividends is uncertain.

FYI depreciation is not a cash item per se, although it is a tax deduction and thus you do get some of the cash back.

There are further misconceptions in your statement.

The polite speak for the statement "the politically correct speak of $2.6b of new fleet isn't really going to drain cash flow at all" is that you are mistaken.

AIR is in a good position yes, but don't get carried away.

Best Wishes
Paper Tiger

[winner69]

Geez Roger,I knew you were banned ....but Siberia?

PS -I dont think anyone will argue with the balance sheet atm--but I wonder about their marketing strategy and pricing (they can always drop prices if necessary though)


Skid - if you were Mr Luxon what would your strategy be in these times when all airlines can make a fortune (even if flying old panes)

[theace]

787 stuck in Fiji

http://fijisun.com.fj/2016/01/17/troubled-air-nz-dreamliner-in-fiji-airways-hangar/

[brend]

Seen AIR's global new year sale which has been advertised for well over a week?

L.A. for $559 Buneos Aires for $699 e.t.c.

lowest prices i've seen for years.


Yip - could've saved myself $200 by waiting until New Year.


787 stuck in Fiji

Not very good for a plane only 3 months old.

https://www.planespotters.net/airframe/Boeing/787/37964/ZK-NZH-Air-New-Zealand
(https://www.planespotters.net/airframe/Boeing/787/37964/ZK-NZH-Air-New-Zealand)

[Beagle]

Hi Brend,

Happy new year mate.

The odd teething problem with any new aircraft is to be expected e.g. each Rolls Royce jet engine has 30,000 individual components.

Some people seem to be forgetting that AIR acquire a lot of their aircraft on operating lease and that their credit rating was raised last year due to the robustness of their balance sheet and strength of their operating performance.

[skid]

Skid - if you were Mr Luxon what would your strategy be in these times when all airlines can make a fortune (even if flying old panes)

I would keep my prices competitive

[Raz]

I would keep my prices competitive

That is the entire point, in the past when another airline had a sale you more often than not could look up the Air NZ web site and they would have a similar priced deal which was not advertised. Also their Auckland centric pricing has lost them some customers from other places i.e certainly flights to europe & asia ex Christchurch via Singapore airlines and Emirates.

[skid]

That is the entire point, in the past when another airline had a sale you more often than not could look up the Air NZ web site and they would have a similar priced deal which was not advertised. Also their Auckland centric pricing has lost them some customers from other places i.e certainly flights to europe & asia ex Christchurch via Singapore airlines and Emirates.

those are 2 airlines that all things being equal would win out from their quality and comfort.(something AIR should strive towards-(not to say they are horrible,but..)

I think MAL is around $1100 to southeast Asia--if they are the most competitive (of the full service) Ill check to see if AIR have a similar price as a matter of interest---(I wonder what would happen if they offered shareholders a discount?--Now that would be interesting)

[iceman]

If AIR adjusts its prices and becomes competitive the of course everyone will give it serious consideration--simple as that(but unless the planes are not full, and the cheaper prices fill them the balance sheet will suffer a bit --its a catch 22.

Our company has attempted 7 bookings recently on the new AKL-EZE route. 4 times economy seats and each time they've been fully booked. Others business class and been available but a short notice booking last week got the last business class seat. Should note that we always need to book at short notice but my preliminary observation is that load factors on this route are very healthy.
Our people very happy being able to fly directly after years of having no options but LAN via Santiago. Will be using this route myself in about 3 weeks and look forward to observing and experiencing it.

AIR entering this route has also seen competitors lower their prices significantly, which is great.

[winner69]

Airline margins at 50 year highs

http://www.smh.com.au/business/aviation/airline-operating-margins-to-reach-50year-high-due-to-low-oil-price-capa-20160118-gm822b.html

[axe]

Airline margins at 50 year highs

http://www.smh.com.au/business/aviation/airline-operating-margins-to-reach-50year-high-due-to-low-oil-price-capa-20160118-gm822b.html

Interesting read. Great link. The last paragraph is very interesting.

[Beagle]

Our company has attempted 7 bookings recently on the new AKL-EZE route. 4 times economy seats and each time they've been fully booked. Others business class and been available but a short notice booking last week got the last business class seat. Should note that we always need to book at short notice but my preliminary observation is that load factors on this route are very healthy.
Our people very happy being able to fly directly after years of having no options but LAN via Santiago, but we have complaints about the fact that AIR now sends those traveling to the regions to their new regional lounge at Auckland airport rather than the relaxing and comfortable Koru lounge. This appears to be yet another kick in the guts for regional travelers from AIR . Will be using this route myself in about 3 weeks and look forward to observing and experiencing it.

AIR entering this route has also seen competitors lower their prices significantly, which is great.

Interesting feedback, thanks Iceman. I hear they are looking to expand to five flights per week to Buenos Aires but at this stage I'm not sure they have the fleet capacity to do it ?
Brent Oil now with a $28 handle...who would have thought ? http://www.cnbc.com/2016/01/17/oil-slides-to-lowest-since-2003-as-iran-sanctions-are-lifted.html
Seems hard to believe that as recently as Q1 Fy16 AIR had some forward cover on oil to work through their system in the $70+ range. ( Source: Most recent fuel hedge disclosure 24/11/2015)

[iceman]

Interesting feedback, thanks Iceman. I hear they are looking to expand to five flights per week to Buenos Aires but at this stage I'm not sure they have the fleet capacity to do it ?
Brent Oil now with a $28 handle...who would have thought ? http://www.cnbc.com/2016/01/17/oil-slides-to-lowest-since-2003-as-iran-sanctions-are-lifted.html
Seems hard to believe that as recently as Q1 Fy16 AIR had some forward cover on oil to work through their system in the $70+ range. ( Source: Most recent fuel hedge disclosure 24/11/2015)

Expanding to 5x per week is music to my ears. I hope that happens.
Welcome back :)

[Raz]

Interesting read. Great link. The last paragraph is very interesting.

Yes certainly happen on the domestic market here..if the load factors are good they naturally will take the higher margin..what is clear is they are happy to allow new competition in and expand the market to take the marginal/price sensitive traveller..always have the risk of losing market share in time..look at Jetstar increase in share based on price while not providing a great robust network/service.

[Raz]

Think that sums it up in more ways than one...they don't have the capacity...surely all those oil producers will have to do something to turn it around before they go down. I'm watching the Saudis... first having a go at Iran trying to avoid them returning to the market...now what??

[Jaa]

Should note that we always need to book at short notice but my preliminary observation is that load factors on this route are very healthy.

You also can not get a one way economy seat from Singapore to Auckland for some days in early February and never for less than $NZ1200++ for any day in the next month and a half.

February is the peak travel period to NZ and Chinese New Year but still... that is impressive since they have a daily A380 AND a 787 on that route to sell tickets for.

Air NZ's strategy of partnering with market leaders has worked very well to Australia, Singapore, Hong Kong and now it seems to Buenos Aires and China.

[skid]

You also can not get a one way economy seat from Singapore to Auckland for some days in early February and never for less than $NZ1200++ for any day in the next month and a half.

February is the peak travel period to NZ and Chinese New Year but still... that is impressive since they have a daily A380 AND a 787 on that route to sell tickets for.

Air NZ's strategy of partnering with market leaders has worked very well to Australia, Singapore, Hong Kong and now it seems to Buenos Aires and China.

if you have the market cornered(as in direct to Buenos Aires) or its a super busy time of year ,you will always do well,and it certainly appears this is ''the best of the best''for airlines in general with oil and all--I would certainly hope that I didnt have to pay $1200 one way from Southeast Asia at the time I go (its usually less for RT)in winter here,but they will always get big bucks for school holidays or Christmas season---Guess its how well they set themselves up for the future that will tell the story---enjoy the spoils now ,but dont take those projections as the never ending gospel.
Theres good momentum atm unless the markets really come unstuck (more) so it appears to have been a good Christmas for most around here.
Winner..I thought i heard some one cheering all the way from my camping spot,when that $3 was broken!

[winner69]

AIR fallen 6c this morning to 302c...and has stopped falling.......
AIR testing its 302c new support...that's usually a 2nd chance buy in opportunity for the AIR believers...Nice:)??


EDIT:
I thought it prudent to add an Disc edit

Disc: dipped another toe into the water @302.5c

Spooky these long term psychological support and resistance levels eh Hoop

AIR seems to be a great example

Fundamentals will help price in the short term term ....but keep watching those charts

[sb9]

Last year we had strong capacity growth of 6% which to the surprise of some analysts given the soft economic conditions was matched by demand growth of 6%.
This year our airline is growing at its fastest rate in its 75 year history with capacity growth of 12% and despite this revenue passenger kilometres flown are actually up 12.2% with YTD group wide load factor very strong at 84.2% up 0.6% from 2015. (November 2015 operating stat's)

Management was so confident of the performance in this half that way back in early October 2015 at the annual meeting they predicted 1H Fy16 profit would exceed $400m. This seems very early in the half year to make such a bold projection and caught most people I talked to at the ASM by surprise. They must be extremely confident.

Since the annual meeting we've seen load factors being announced that exceed last year, very strong tourism growth of 9%, well up on last year and very strong outbound tourism growth, Kiwi's are travelling more and taking advantage of cheap fares, e.g. their New Year sale fares look very reasonable to me as noted by Winner above.

Since their last fuel hedge disclosure of 24 November 2015 where they announced they were only 40% hedged too 2H Fy16 fuel costs we've seen Brent spot come down from $46 barrel to just on $30.
Based on best known information in the peak summer period AIR will be enjoying very low fuel prices as they embark upon their new routes to Buenos Aires and Houston so the cash register is clearly in overdrive at present.

What to do with all that cash ?
Last year cash flow from operations was a remarkable $1.1b, just on $1 per share ! Tony Carter after the ASM mused that perhaps this is the highest operating cash flow of any NZX company ?
Yes they have a $2.6b fleet upgrade program over the next 4 years but normal depreciation with the expanded fleet size will be approx. $1.8b over this period so by my estimation so that's really only a net outlay in the order of $600m after fleet disposal proceeds from the 767's and Beechcraft 1900's. Further, some of the new acquisitions will be by way of operating lease not purchase.
But wait there's more ! Some of the cost of the two Dreamliner's that came online in early FY16 was funded by up-front payments in FY15 and they specifically mentioned they'd made more advanced payments on these aircraft (implying more than normal), to gain further discounts from Boeing so the politically correct speak of $2.6b of new fleet isn't really going to drain cash flow at all !
Begs the question of the size of the special dividend this year. Previous year's, when announced have been 10 cps but I suspect that doesn't cut the mustard any more and we'll see something considerably higher.

Yes Oil prices are not sustainable over the long run at these level's but the outlook looks benign to me. Almost zero world-wide economic growth so where is the demand going to come from to drive oil back up ? Even if it does revert to $70 or $80 barrel in the medium term the company is well positioned with a modern fuel efficient fleet and might actually gain a competitive advantage with oil at that level.

So that brings me to my musings of what does the statement in early October of company will exceed $400m for 1H Fy16 really mean.

$400m looks very, very conservative to me. I'd be surprised if the first number wasn't a 5. Anyway we can talk all we like but some of you might be wondering what I've been doing as actions speak louder than words. I was topping up in the low 290's while in Siberia...the thought of all those future juicy dividends kept me very warm :)

I am hoping for an interim dividend of 15 cps up from 6.5 cps and final of 20 cps up from 9.5 cps together with a special of 20cps, (all fully imputed). Stock trades cum the forthcoming interim dividend and I think the SP remains very well supported by the fundamentals of what is a very well managed airline. Further, I believe contrary to the view stated by some, that many Kiwi's are very parochial and chose to fly their national airline. I also believe that AIR as one of N.Z.'s preeminent employers are able to pick and chose the cream of the crop when it comes to employees and the calibre of the staff you meet on board reflects that.

Couldn't agree more there Roger, I would say the HY earnings would start with a 5 in front. I'm picking 15c interim too.

By the way, welcome back to the forum.

[winner69]

Spooky these long term psychological support and resistance levels eh Hoop

AIR seems to be a great example

Fundamentals will help price in the short term term ....but keep watching those charts

Reasonable day today

Is it still going to plan Hoops?

[Hoop]

Reasonable day today

Is it still going to plan Hoops?

So far so good...

Amongst the gloom morning of the 18th Jan, accumulating more on the bounce (302.5) off the 7c throwback to 302 support worked a treat...

There's a lot of black clouds around though..eh Winner?.. Have to keep a close eye on things
Jeez!!!.. Asia taking a bath at the moment.....ugly:(

[Joshuatree]

Pretty messy day coming up unfort. A bit quixotic but AIR is starting to look like a defensive stock!!.Tin hats on.

[Beagle]

On a beautiful still evening on Wednesday last week my wife and I flew back from Queenstown and enjoyed the very friendly company of a Canadian tourist beside us in 1C. The flight service manager and attendant were very friendly and professional and the day was made all the more perfect by the 6.5 cent SP rise to finally crack $3 in reasonably convincing fashion.
Renee was happy to serve us another wine on the Koru hour flight, (who knew what was left after the initial passenger service was tipped down the drain ?), and all seemed extremely well with the world.

So I got to thinking...why has the SP been so strong against such a backdrop of thunderclouds wherever you look and what is it about AIR that's so special ? Initial thoughts.
1. We live in a really beautiful country. Really the clarity and purity of Lake Wakitipu is just as superb as I remember it 40 years ago as a kid, (same for Lake Taupo)
2. Queenstown is really going off in a huge way
3. The staff you meet on AIR flights seem to be happy with their jobs and are very friendly and professional, (lets be honest all airlines use similar hardware so its the people and attitude that make a difference
4. I enjoy flying on an airline where I have a meaningful stake and I am sure other Kiwi's enjoy flying their national airline
5. Clearly the market is anticipating a ripper half year result
6. I suspect a lot of baby boomer's have extra time and money on their hands now the kids have left home and are well and truly cognisant of the fact that due to the phenomenon of hedonic adaption, stuff per se doesn't make you happy but varied and interesting travel experiences with family and friends does.
7. With cheaper fuel airfares are coming down and I think people are travelling more.

With so much pollution, crowding, security and other issues elsewhere in the world I think N.Z. tourism has a very bright future especially now our $Kiwi is at a more attractive level.
Anyway that's FWIW my further musings last week...obviously as previously posted I hold the management team in the highest regard and the balance sheet and cash flow are extremely robust. I'm looking forward to the half year result and flying again with AIR soon.

[Balance]

My thoughts on another thread re market action:

Case in point - oil price drop will pump US$250 billion of savings and/or increased consumer spending power in China and India alone. Expect more China and Indian tourists as an example. Airlines, tourism sector and the hospitality industries catering to the middle class are going to boom this year.

On the downside, companies servicing the oil sector and the previously spend like crazy oil wealth countries of the Middle East are going to have a very very tough year indeed.

[Beagle]

Yes an excellent point Balance. Lowest interest rates here in 60 years and lower fuel prices are leaving a LOT of extra money in Kiwi's pockets too.

[GuessX]

You might be right on the Indian tourists, but I can't help but think that with the Chinese working hard to control their capital outflow we might see a reduction in the Chinese tourists. Especially as their travel gets more expensive because of their currency devaluation.

[Balance]

You might be right on the Indian tourists, but I can't help but think that with the Chinese working hard to control their capital outflow we might see a reduction in the Chinese tourists. Especially as their travel gets more expensive because of their currency devaluation.

Not at all. The capital outflows are very specific to the billions of dollars illegally transferred out of China. The average Chinese is allowed US$50k a year to transfer or spend overseas. In fact, there's no control on credit card spending.

Currency wise, RMB is higher still against almost all currencies save the US$. NZ$ is its weakest against RMB since 2009.

Anyway, not trying to sway anyone - just giving my view that there are sectors which are going to continue to do very well with the massive changes in economic settings out there. All comments and debates most helpful.

[skid]

I think Guessx is referring to the bulk of Chinese tourists which are not the ones illegally trying to move money out of China,in any big way--time will tell but we could just as easily see a drop in Chinese middle class tourists.
Its a great country to visit (NZ)with a great reputation ,granted,but it is far away and if people start to watch their savings due to a downturn in the economy we could see a change----everyone wants to go everywhere atm and oil is cheap, so steady as she goes.
(THL has leveled off which should be part of the mix for that theory in terms of increasing SP)

[sb9]

$3.10 now on back of decent volume, looks like market pricing in oil drop and also upcoming results next month.

[Beagle]

I see low oil prices as sprinkling fish food into a stream..The big fish get the most benefit, the remainder floats around and attracts more fish that weren't there to begin with...I think AIR is not classed as a big fish.

Airlines V Oil correlation is not good...Recessions kills both Cyclical Airlines and Oil prices which upsets any (false) "logical" conclusions that correlation exists ....If we think this time the Oil price is not a reaction to negative Global economic growth...then perhaps there "could" be a hint of correlation.

The chart below illustrates AIR's relationship with Oil..Its a pity there is no very long term freely available chart data to validate accurately the relationship.
...also...
AIR is testing the psychological $3.00 Resistance
The $3.00 resistance theory (chart) v Practical (Depth)...the depth shows the charted resistance line is quite strong..
The cyclical resistance is not far away...

If AIR is not a true cyclical* (Averaging positive Organic growth within its market environment over decades) then the cyclic resistance could be under threat*...True Cyclical companies grow strongly during good economic times and shrink strongly during bad economic times...net result over time = no
overall growth (flat line, no trend)

http://i458.photobucket.com/albums/qq306/Hoop_1/AIR%20v%20oil%2011012016.png (http://s458.photobucket.com/user/Hoop_1/media/AIR%20v%20oil%2011012016.png.html)

Looks like cyclical resistance is indeed under serious threat. Another couple of closes above $3.10 and I might have to buy more and crack open that good bottle of scotch :)
http://a.msn.com/r/2/BBouZeJ?a=0&m=en-nz