AIR - Air NZ.

[B747-419]

The adage "The trend is your friend" might not be a bad idea here

[Valuegrowth]

Smart money is exiting (has exited)? Some nice capital profits been had by the nimble, whereas the die hard divi takers holding and some even buying the declining SP despite common logic not to buy a downtrend. Who knows where it could end? Has nothing to do with fundamentals, that's becoming obvious. Follow the money.

Thank you Baa Baa for your kind response.

[OldGuy]

HELP PLEASE: What do you consider a good entry price for this stock given its current trend and wider sentiment???

[couta1]

HELP PLEASE: What do you consider a good entry price for this stock given its current trend and wider sentiment???
I'm holding 80k shares at $2.80 and I'm happy with that so in light of the current price I'd say it's a steal, will be back to $3 in the not too distant future IMO. No doubt the pure TAers will be advising caution.

[skid]

Im not expert but many would say to buy on the way back up rather than trying to time the botton.
If it drops 15% you may be getting a say 10% advantage over the old price but if momentum is now moving up then hopefully your odds of more gains are higher.--but ofcourse their are many different viewpoints

[OldGuy]

I'm holding 80k shares at $2.80 and I'm happy with that so in light of the current price I'd say it's a steal, will be back to $3 in the not too distant future IMO. No doubt the pure TAers will be advising caution.

THanks mate. I am also looking at picking up 80k of them (and hoping to get in for under $200k) but agree its already good buying at current prices!

[OldGuy]

I am in at $2.65

[oldtech]

I am in at $2.65

Well that's 18c better than I did on Friday - and, I think, several others - so you should be pleased. :t_up:

[sharp]

I am in at $2.65

Same here. Now sitting here with 40,000 shares in AIR and looking forward to the 10%+ dividend yield.

[couta1]

I am in at $2.65 Welcome aboard,fasten your seat belt and enjoy the ride whether it be a short or long haul trip,the bottom looks pretty much in to me anyways.:cool:

[couta1]

Same here. Now sitting here with 40,000 shares in AIR and looking forward to the 10%+ dividend yield. Nice timing,enjoy.

[Beagle]

11.8% gross dividend yield by my calculations at $2.65, plus special dividends(s). This is based on consensus analyst estimates of average dividends for the next three years. 22.5 cps per annum and assumes full imputation credits apply, (safe assumption IMO due to healthy imputation credit account balance). Beyond that AIR management are on record at their most recent conference call as saying "there's tremendous potential for free cash flow later this decade"

[Raz]

11.8% gross dividend yield by my calculations at $2.65, plus special dividends(s). This is based on consensus analyst estimates of average dividends for the next three years. 22.5 cps per annum and assumes full imputation credits apply, (safe assumption IMO due to healthy imputation credit account balance). Beyond that AIR management are on record at their most recent conference call as saying "there's tremendous potential for free cash flow later this decade"

looks like we are all buying currently

[sb9]

looks like we are all buying currently

I'm keeping my powder dry still...

[OldGuy]

well this is going nicely so far!

[couta1]

well this is going nicely so far! You won't get bored holding this stock OG, if you like rollercoasters then you'll be just fine.

[Beagle]

You won't get bored holding this stock OG, if you like rollercoasters then you'll be just fine.

LOL mate, you nailed it with that post:)

[vin]

Haha, great call couta1. Glad to be back on board @ $2.7.

[skid]

Its a battle now between those that want to get in cheap (?) and those that were waiting for a rise to bail. ..it true about the roller coaster analogy (I was just about to christen it ''the Rubber ball share''

[Nasi Goreng]

I got back in at 2.665 yesterday afternoon. It's a close your eyes buy. I can hear Couta screaming at the back of the roller coaster... Or is it the ghost train.

[sharp]

I got back in at 2.665 yesterday afternoon. It's a close your eyes buy. I can hear Couta screaming at the back of the roller coaster... Or is it the ghost train.

How is AIR a ghost train?

If anyone has any doubts about AIR and concerns about its market share being eroded away by competition - I would suggest that they fly with the competition and again with AIR.

IMO - AIR is not always perfect but they consistently provide better service and convenience than their competition.

Recently flew business on QAN and their lounge at Auckland Air was mediocre at best and food (mash and bangers in the lounge - sub par IMO). However, their new business class seats on the A330 are superb.

[Kelvin]

In other news, In case you're interested in the operational side of things, here's the latest schedule changes to the domestic network

http://airlineroute.net/2016/04/26/nz-domestic-jul16/

Capacity increases on most routes that Jetstar compete on

[OldGuy]

You won't get bored holding this stock OG, if you like rollercoasters then you'll be just fine.

ha! I only like the part where they go from the bottom to the top. Not sure about those loopdy-loop bits....

[dobby41]

Recently flew business on QAN and their lounge at Auckland Air was mediocre at best and food (mash and bangers in the lounge - sub par IMO). However, their new business class seats on the A330 are superb.

And most people don't use the lounge or fly business class.
So AIR is consistently better than Emirates or Singapore?

[couta1]

ha! I only like the part where they go from the bottom to the top. Not sure about those loopdy-loop bits.... Well OG you have just experienced your first small coaster rise and fall as a holder and all in the space of 1.5 hrs, get ready for the loopdy- loop bit for the rest of the day.:cool:

[OldGuy]

cripes, might need to go find some fresh underwear. This thing is choppier than a day's fishing in cook strait.

[Nasi Goreng]

Ok Sharp, just to clarify, I wouldn't buy any company that didn't have good fundamentals, particularly one where the share price has dropped so much in a short space of time.

Buying in at these levels with downward momentum is a risk, if it falls further then it is capital erosion or dead money until price recovers which can in some cases take a very long time.

[sharp]

And most people don't use the lounge or fly business class.
So AIR is consistently better than Emirates or Singapore?

Flew economy in the weekend on AIR - and yes better than Jetstar or Qantas.

So do you fly Emirates or Singapore airlines?

[sb9]

Buying in at these levels with downward momentum is a risk, if it falls further then it is capital erosion or dead money until price recovers which can in some cases take a very long time.

Agree, it appears this morning's price jump was like "dead cat bounce". Looking at the trading pattern it looks as though selling pressure is still on, may be 260 is floor or lower, who knows?

And its not even May yet....

[winner69]

Took a stroll along the waterfront this morning ....oblivious to world events

Then I saw this and couldn't believe it .... AIR having a good day and up 5 cents wow ... and carried on my merry way oblivious to world events

Must be STers backing the truck up

[JohnnyTheHorse]

THanks mate. I am also looking at picking up 80k of them (and hoping to get in for under $200k) but agree its already good buying at current prices!

Looks like new goal might be to get over $200k for selling them eh?

[Tony Two Gloves]

Spectacular comments over the last few days, but JTH that one takes the cake!

[Tony Two Gloves]

I'm out at the moment, but $2.55 would surely tempt me back - I'm thinking around 4.00PM today.

[dobby41]

Flew economy in the weekend on AIR - and yes better than Jetstar or Qantas.

So do you fly Emirates or Singapore airlines?

Its not about what I do.
It was you who suggested that AIR "consistently provide better service and convenience than their competition"
I was just suggesting that Qantas and Jetstar aren't their only competition.

[sb9]

Noticed someone taken out big chunk at 260....hold tight guys, looks like heavy turbulence ahead....

[Raz]

Yes I agree, look at the tech. on this thing!

[thestg]

10th September last year it hit a low of $2.35 - may be heading there again. But on a good note 6 weeks later on 21st Oct it was back to $2.90.

[vin]

Can see this stock being a rollercoaster for a very long time, it's all I've ever known

[OldGuy]

Looks like new goal might be to get over $200k for selling them eh?

given that I only bought 50k, I agree wholeheartedly :D

[skid]

And most people don't use the lounge or fly business class.
So AIR is consistently better than Emirates or Singapore?

Are you serious??? Sorry ,but there is no contest between AIR and Singapore air,and most likely Emirates as well in terms of service and comfort----but ATM thats not what its all about is it? (SP)

[Grimy]

After selling 1/2 my holding a couple of weeks back at 3.025 I'm back in at 2.585. Keeps me around $2.54 average. I'd decided it was getting too stressful holding. But hey - I guess I've decided I need more stress in my life, not less!!

[Bobdn]

Oil is now surging in price. Great for my BHP shares but not great for my recently acquired AIR shares. You can't have all you're own way I guess.

[kelfy]

Don't sell.

http://www.stuff.co.nz/business/industries/79320441/lowball-offer-for-air-new-zealand-shareholders


holy **** now I want to buy few logs and sell it all to to them..:t_up:

[OldGuy]

Oil is now surging in price. Great for my BHP shares but not great for my recently acquired AIR shares. You can't have all you're own way I guess.

surging? Says who??

[Jantar]

And most people don't use the lounge or fly business class.
So AIR is consistently better than Emirates or Singapore?


.... I'm back in at 2.585. Keeps me around $2.54 average.....
Also made a small top up at 2.585 for an average of 2.61, and looking forward to a nice divi on that. :D

[winner69]

Yes I agree, look at the tech. on this thing!

TA from a cyclical perspective

Can't get this chart out of my mind - it keeps on coming back to haunt me

Didn't want to ruin punters days completely by adding another steep up curve pre 2007

[Bobdn]

OldGuy, its gone up just over 70% in the last three months. I read about it on the internet.

[Jantar]

TA from a cyclical perspective

Can't get this chart out of my mind - it keeps on coming back to haunt me

Didn't want to ruin punters days completely by adding another steep up curve pre 2007
I almost hope it does follow that trajectory again. With the current eps and increase that is expected, it means we can buy a lot more AIR just with the dividends and almost get them for for free.

I expect to more than double my current AIR holding within the next 6 - 12 months.

[skid]

I almost hope it does follow that trajectory again. With the current eps and increase that is expected, it means we can buy a lot more AIR just with the dividends and almost get them for for free.

I expect to more than double my current AIR holding within the next 6 - 12 months.

I think the last week has shown that there are lots of things to consider other than buying for dividends alone.
I assume that with good earnings the div is safe?

[couta1]

Wow OG what a wild intro to the Air rollercoaster(Hope those knuckles are holding up) Took a little wild dip myself after loading up a few more at $2.65 this morning(Now have 113k shares at $2.75avg) Must be back in the 96 club again aye Roger, also in your high blood pressure and poor sleep zone with over 20% of portfolio total now. Anyways I'm in divvy hunting mode now for the rest of the year so if the price hangs around this level after my IFT shares go Ex divvy I will probably buy some more. I reckon there will be a lot of sheep looking back in a few months wondering why they gave up their fleeces so easily in such a fundamentally solid company but hey that's the nature of sheep, they don't think, just follow the crowd movement of the moment.

[skid]

come back Hoop--Your take would be really beneficial (your message box is full)
There talking about ''Sheep''--you know its bad when they start talking about sheep.:ohmy:

[Baa_Baa]

10th September last year it hit a low of $2.35 - may be heading there again. But on a good note 6 weeks later on 21st Oct it was back to $2.90.

Technically you're correct imho, today's close is pretty much on the Nov 11 2015 daily spike down (which recovered that day to close $2.65). Today however didn't recover.

The SP has fallen aggressively to and through the typically acknowledged 50EMA and 200MA supports, but yesterday also through the 'death average' 400MA. I call it that because on a longer term basis I look for 200MA/400MA cross overs, the double death cross, or double golden cross. Sort of a last ditch (got it wrong) get out signal, or get in as the case may be. However that crossover isn't going to happen any time soon.

So assuming the $2.56 support holds tomorrow, it's likely to be because more buyer support wading into what is perceived to be a low SP compared to stellar fundamentals, like the chatter here for the past few days (surely it can't go lower, I'm buying this down trend). Phaedrus would weep, or actually he would probably be scolding.

On the other hand, if that $2.55 Nov 11 support fails, $2.415 (modest support) and $2.35 (major support) lies beneath here.

EDIT: Should have mentioned that on a closing-price basis, the Nov 11 $2.65 support has been breached, yesterday. Today technically is a follow on down.

Indicators are suggesting a late stage of the current decline entering oversold territory, though they can't predict tomorrow's sentiment. Soon enough those sellers who have enjoyed and have been taking super profits from the multi month run-up from Sept 2015 will dry up, perhaps presenting superior buying opportunity.

That assumes no unexpected external or internal new factors rattles AIR's cage. Sure is a volatile share price, I'd be heaving into the sick bag if this was an actual flight.

[Baa_Baa]

Wow OG what a wild intro to the Air rollercoaster(Hope those knuckles are holding up) Took a little wild dip myself after loading up a few more at $2.65 this morning(Now have 113k shares at $2.75avg) Must be back in the 96 club again aye Roger, also in your high blood pressure and poor sleep zone with over 20% of portfolio total now. Anyways I'm in divvy hunting mode now for the rest of the year so if the price hangs around this level after my IFT shares go Ex divvy I will probably buy some more. I reckon there will be a lot of sheep looking back in a few months wondering why they gave up their fleeces so easily in such a fundamentally solid company but hey that's the nature of sheep, they don't think, just follow the crowd movement of the moment.

You called? Speaking of sheep, perhaps some of them have pointy teeth and just wear a sheep suit to fool the punters into buying into their sellers dream down trend, avoiding capital losses themselves, scooping up the profits on the way down and buying the hapless at the turn around. Smart money has been exiting AIR, surely that's obvious, they're not buying it (apologies to recent buyers, no offence intended, I know you genuinely see an opportunity and you could well be right, tomorrow). I think it's a broadly false assumption that the sheeple are selling, usually it's the other way around. And vice versa.

[Xerof]

Classic.

A nice head and shoulders (bearish) has completed. An eyeball measured target looks to be around 2.15, but there will be support at that old resistance at 2.25 imo.

dyor on h&s

[couta1]

Hey Baa, I do speak with some authority on Sheep, I shore the buggers for nearly seven years, I still reckon there's a lot of panic selling going on here but that's just my opinion and I've learnt the hard way that you don't panic sell fundamentally solid companies unless your a sheep.:cool:

[percy]

Hey Baa, I do speak with some authority on Sheep, I shore the buggers for nearly seven years, I still reckon there's a lot of panic selling going on here but that's just my opinion and I've learnt the hard way that you don't panic sell fundamentally solid companies unless your a sheep.:cool:

You surely would not have shorn them going into winter ?
Looks as though you are likely to be the one who gets fleeced.!! ..lol/.

[Poet]

You have to ask 'what's changed from three weeks ago?'. Still a good company, still earning well, and in this macro-environment, where else do you put your money?

[percy]

I'm holding more than a couple of million of these, and have to ask 'what's changed from three weeks ago?'. Still a good company, still earning well, and in this macro-environment, where else do you put your money?

The correlation with QAN has meant market sentiment has changed.Brokers are downgrading their projections.
Spread around the following and you will do well;AWK,CNU,HBL,MEL,RBD,and SCL.

[couta1]

You surely would not have shorn them going into winter ?
Looks as though you are likely to be the one who gets fleeced.!! ..lol/. Actually we did on occasions using a cover comb or stormbeater, can be an advantage getting a heavy fleece off a pregnant ewe. Anyway I think I've said enough on this thread for now, don't want to be a Hog.:cool:

[Snow Leopard]

Somewhat rapid descent & lots of nervous chatter from the passengers.

I hear the oxygen masks have deployed and there will be an engine count later.

Fly them, don't buy them.

Best Wishes
Paper Tiger

[couta1]

Somewhat rapid descent & lots of nervous chatter from the passengers.

I hear the oxygen masks have deployed and there will be an engine count later.

Fly them, don't buy them.

Best Wishes
Paper Tiger Well if someone didn't buy them,you wouldn't be flying them, meaning you would be strictly a jungle bound feline.

[oldtech]

I for one will be buying today - topping up the initial purchase.

Is anybody brave enough to predict whether today will bring a further drop, or a start on the recovery? Or is everybody still trying to work out just where this roller-coaster will head next?

[OldGuy]

what a ride, alright. Not fussed tho, as the dividend is more than enough to cover my holding costs, so no rush to exit. BEsides, I got in at around 20% below previous peaks, and I'm confident it will make it back there. So, its time to just wait and see...

In fact, happy to buy another 50k if it goes low enough!

The rest of you should definitely keep panicking, though. Makes for fun reading!

[dobby41]

Is anybody brave enough to predict whether today will bring a further drop, or a start on the recovery? Or is everybody still trying to work out just where this roller-coaster will head next?

Is there anyone foolish enough to believe what a predictor said?

[couta1]

I for one will be buying today - topping up the initial purchase.

Is anybody brave enough to predict whether today will bring a further drop, or a start on the recovery? Or is everybody still trying to work out just where this roller-coaster will head next? I think if you take a look at SKT of recent times you can see a fine example of fickle market sentiment in play and how that might apply to Air, Sky hit a low of $4.11 because people doubted their future prospects in the light of increased competition etc, yet their price hit $5.30 yesterday. Now what has Sky done to dispel that doubt in the meantime other than put on a fancy presentation, absolutely nothing, I rest my case.

[workingdad]

I for one will be buying today - topping up the initial purchase.

Is anybody brave enough to predict whether today will bring a further drop, or a start on the recovery? Or is everybody still trying to work out just where this roller-coaster will head next?

I am already surprised it has gone as low as it has. Two weeks ago who would have guessed - what has really changed with AIR to warrant such a drop. Companies get punished for profit downgrades or negative news but nothing operationally from AIR to indicate this.

An average night on the US markets so I am thinking AIR is going lower today and I think I will get some more as well but want to see some signs of turn around and heading up again. The dividend yield is looking mighty attractive at these rates.

I had wanted to stay out of the market for a while thinking a correction of some significance is on the cards but still chasing some quick turnarounds, although buying into AIR for potential dividends goes against this it is a back up if there isn't a quick recovery in SP

[oldtech]

NZX shows:
High Bid - $2.685
Low Offer - $2.560

Forgive my ignorance, does this mean that there is somebody with a bid in at $2.685? IE, 13.5 cents higher than last night's close? If so, why? Doesn't make sense to me ... :confused:

[workingdad]

NZX shows:
High Bid - $2.685
Low Offer - $2.560

Forgive my ignorance, does this mean that there is somebody with a bid in at $2.685? IE, 13.5 cents higher than last night's close? If so, why? Doesn't make sense to me ... :confused:

It happens at the start and finish of the market - it includes buys and sells like stop loss ect. Wait til 10 am to see the buy/sell values.

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11630274

Better than using the sick bag but the irony of them releasing this video when their SP is in the toilet isn't lost on me. Nothing material has changed in the last few weeks. American carriers are down overnight, PE's of the whole sector are low and apparently the market thinks many people are simply going to stop flying soon. BUT tourism is growing at 10% per annum so the facts simply don't support the technical's.

If anyone wants to know what I'm doing, I'm not selling that's for sure but I won't go over 10% portfolio allocation either. Keep your head screwed on in terms of the size of your exposure is what I'm doing and will ride it out and enjoy future dividends which all go into my Switzerland travel fund :)

[777]

NZX shows:
High Bid - $2.685
Low Offer - $2.560

Forgive my ignorance, does this mean that there is somebody with a bid in at $2.685? IE, 13.5 cents higher than last night's close? If so, why? Doesn't make sense to me ... :confused:

Look at all the other shares on the market. Opening and at end of day closing. It is normal and the quotes are merely for positioning in the buy/sell queue.

[oldtech]

It happens at the start and finish of the market - it includes buys and sells like stop loss ect. Wait til 10 am to see the buy/sell values.

Thanks workingdad :t_up:

[kiwichick]

It seems to me that the share price drop correlates to the increase in oil prices.

[Beagle]

Looking at a trip to Las Vegas in July for 2 pax, (not for reasons some on here might imagine). American Airlines flying their new Dreamliner $1221 return, AIR N.Z. is roughly $2,000 return.
Anyone reading this at the company is welcome to PM me and price match and I'd also like an upgrade to PE for all my efforts on here for the airline...otherwise as I have a hankering to try out the new technology in the Dreamliner...no prizes for guessing which airline we'll be flying. Plenty of room in my PM box, I await with interest. Maybe this sort of game changing competition to LA and beyond explains some of the SP drop, (acknowledging that this is basically a launch special deal by AA to kick start their service so their pricing at this level won't last forever)

[OldGuy]

It seems to me that the share price drop correlates to the increase in oil prices.

Possibly, but the reliabilty of any such inference is fundamentally compromised without properly accounting for the dozens of other factors that are likely to be at work.

Statistical inference is difficult like that...

[Bobdn]

Looking at a trip to Las Vegas in July for 2 pax, (not for reasons some on here might imagine). American Airlines flying their new Dreamliner $1221 return, AIR N.Z. is roughly $2,000 return.
Anyone reading this at the company is welcome to PM me and price match and I'd also like an upgrade to PE for all my efforts on here for the airline...otherwise as I have a hankering to try out the new technology in the Dreamliner...no prizes for guessing which airline we'll be flying. Plenty of room in my PM box, I await with interest. Maybe this sort of game changing competition to LA and beyond explains some of the SP drop, (acknowledging that this is basically a launch special deal by AA to kick start their service so their pricing at this level won't last forever)

Now that I'm a shareholder I'd add: my Qantas fare to Tokyo is $1341 return. AIR was $2200.

Competition is brutal.

[winner69]

Now that I'm a shareholder I'd add: my Qantas fare to Tokyo is $1341 return. AIR was $2200.

Competition is brutal.

Hilary would still be flying AIR though

[Zaphod]

We've booked to HNL on the 787-9 in May, so I'm looking forward to this. I've also made some business bookings to LA and SFO on an unadvertised special that was around the same price as AA's special.

AirNZ do price match the airlines, but don't always advertise it. You can usually find them by doing a dummy booking for the same dates on the main website, or the seats will appear through grabaseat.

[Beagle]

Keeping an eye on grabaseat for sure Zaphod. They had a short window return to South America special today for $698 return...would have been nice if that's where we wanted to go. Looking forward to seeing that price on a LA return flight on their grabaseat deals soon. We will hold off booking AA for a week or two in the hope we can support our own airline instead.
Enjoy your flight to HNL !

Missed Hilary this morning. She's good at keeping that other cheeky rascal in check isn't she.

[Poet]

Interesting broker comment on Qantas

Qantas Capacity Management Questioned by Morgan Stanley -- Market Talk Posted on 22 April 2016 11:55 | Dow Jones Institutional News
2355 GMT - Morgan Stanley takes a second look at Qantas Airways' (QAN.AU) recently released third-quarter performance, and determines it was poor capacity management and not demand that was the main driver of weakness in the period. It argues the weak domestic demand picture implicit in the sharp sell-off in Qantas shares doesn't reconcile with an otherwise reasonable retail and consumer environment, so suspects poor capacity management by the airline. That said, the brokerage says the sell-off looks overdone and nothing appears structurally broken at Qantas. And with excess capacity now exiting the market, the airline's fourth quarter could surprise positively. (robb.stewart@wsj.com; Twitter: @RobbMStewart)
(END) Dow Jones Newswires
April 21, 2016 19:55 ET (23:55 GMT)

[Beagle]

Interesting broker comment on Qantas

Qantas Capacity Management Questioned by Morgan Stanley -- Market Talk Posted on 22 April 2016 11:55 | Dow Jones Institutional News
2355 GMT - Morgan Stanley takes a second look at Qantas Airways' (QAN.AU) recently released third-quarter performance, and determines it was poor capacity management and not demand that was the main driver of weakness in the period. It argues the weak domestic demand picture implicit in the sharp sell-off in Qantas shares doesn't reconcile with an otherwise reasonable retail and consumer environment, so suspects poor capacity management by the airline. That said, the brokerage says the sell-off looks overdone and nothing appears structurally broken at Qantas. And with excess capacity now exiting the market, the airline's fourth quarter could surprise positively. (robb.stewart@wsj.com; Twitter: @RobbMStewart)
(END) Dow Jones Newswires
April 21, 2016 19:55 ET (23:55 GMT)

That view is supported by sound load factors at AIR. Travel has NEVER been cheaper in real terms so people, (including myself) are doing more of it. Demand is not the issue, some airlines inability to manage their capacity is more likely the culprit. AIR have a superb record of matching demand and capacity as demonstrated by average load factors in recent years being consistently well above 80%.

[sb9]

Another day of deja vu with regards to trading range, up in the morning and weakening later...I doubt very much if the bottom is found yet though. Our friend hoop can give us the TA perspective perhaps....

[workingdad]

Return flights to Wellington in May with air nz $118. Parking at Auckland airport for the day $38-46. Considering 2 Koru lounge visits I know which one is better value for money.

I paid for it rather than use air points. Want to do my thing for the quarter now I'm holding again ;)

[workingdad]

Another day of deja vu with regards to trading range, up in the morning and weakening later...I doubt very much if the bottom is found yet though. Our friend hoop can give us the TA perspective perhaps....

Turnover seems a bit more subdued today. Perhaps not as many sellers and buyers want more of a bargain.

I'm sure hoping for some good news from them soon particularly on the VAH sale which has been quiet for a wee bit now....

[skid]

That view is supported by sound load factors at AIR. Travel has NEVER been cheaper in real terms so people, (including myself) are doing more of it. Demand is not the issue, some airlines inability to manage their capacity is more likely the culprit. AIR have a superb record of matching demand and capacity as demonstrated by average load factors in recent years being consistently well above 80%.

So their load factors are good,but reading todays posts 2 out of three(including Roger,and I agree ,you should be treated to first class imo) have taken the options that are considerably cheaper. As a rule AIR is almost always more expensive so it becomes a matter of whether their brand merits it(thats a personal choice ,but I stand by my premise that price is a large factor in airline use)..but if they can continue to keep a big load factor -good for them.But these examples are demonstrating the importance of considering competition and its effect.
There are so many factors to consider,but this morning holders are saying ''Im flying on another airline because its more affordable'' and...why is there been such a drop in the SP?
I dont know if its anything,but when my wife delayed her trip back from Montreal,the ticket change fee was much less because there was plenty of room(not suggesting we read to much into that ,but still.)
I just wonder about the markets..how many investors are seeing a great upside from here? They seem to be treading water in the US with the not great earnings--the ''easy money''is still keeping things afloat(most think a rate rise this year is not going to happen) but it doesnt seem to be getting much of a bang for the buck anymore(at least in company results,in general)--maybe things will kick in ,but if not ,there is not much left.
The best Janet can do is keep postponing (well she could do another QE but what kind of a signal would that give?

[sb9]

Turnover seems a bit more subdued today. Perhaps not as many sellers and buyers want more of a bargain.

I'm sure hoping for some good news from them soon particularly on the VAH sale which has been quiet for a wee bit now....

Somehow, the current weakness feels bit different to what happened before. Not sure its due to general airlines industry wide trend or seemingly strengthening oil prices, or bit of uncertainty caused by AIR execs recent selling some of their share on market (incl CL). Whatever it might be "it feels different this time"...., just my 2c, GLTA.

[forest]

Sections 297(2) and 298(2), Financial Markets Conduct Act 2013
To NZX Limited; and
Name of listed issuer: Air New Zealand
Date this disclosure made: 29-Apr-16
Date of last disclosure: 20-Apr-16
Director or senior manager giving disclosure
Full name(s): Stephen Jones
Name of listed issuer: Air New Zealand
Name of related body corporate (if applicable):
Position held in listed issuer:
Chief Strategy, Networks
and Alliances
Summary of acquisition or disposal of relevant interest (excluding specified derivatives)
Class of affected quoted financial products: Ordinary shares
Nature of the affected relevant interest(s): Sale of shares
For that relevant interestNumber
held in class before acquisition or disposal:
503,535 ordinary shares
1,101,947 options
389,376 performance
rights
Number held in class after acquisition or disposal:
189,400 ordinary shares
1,101,947 options
389,376 performance
rights
Current registered holder(s):
Registered holder(s) once transfers are registered:
Details of transactions giving rise to acquisition or disposal
Total number of transactions to which notice relates: 3
Details of transactions requiring disclosure
Date of transaction: 26, 27 & 28-Apr-16
Nature of transaction:
Sale of 104,711 shares
(26/4), 104,712 shares
(27/4) and 104,712 shares
(28/4)
Name of any other party or parties to the transaction (if known):
The consideration, expressed in New Zealand dollars, paid or received for the acquisition
or disposal. If the consideration was not in cash and cannot be readily by converted into a
cash value, describe the consideration:
Proceeds from sale of
shares: $840,153.98
Number of financial products to which the transaction related:
If the issuer has a financial products trading policy that prohibits directors or senior
managers from trading during any period without written clearance (a closed period)
include the following details—
Whether relevant interests were acquired or disposed of during a closed period: No
Whether prior written clearance was provided to allow the acquisition or disposal to
proceed during the closed period:
Date of the prior written clearance (if any):
Certification
I certify that, to the best of my knowledge and belief, the information contained in this
disclosure is correct and that I am duly authorised to make this disclosure by all persons
for whom it is made.
Signature of director or officer:
for and on beha

[TheHunter]

Bare in mind that he sold in even lots over 3 days, on the 26th it was trading at $2.80.

[sb9]

Bare in mind that he sold in even lots over 3 days, on the 26th it was trading at $2.80.

Which is a more worrying sign as they are in continuous selling mode, into 250s now...

[forest]

Which is a more worrying sign as they are in continuous selling mode, into 250s now...

And daily volume has been above average hole week.

[Beagle]

There's no way to sugar coat the fact that it is disconcerting to see such a wide range of senior executives including Chris Luxon treating their lucrative share incentive packages as nothing more than a mechanism to increase their already extremely generous salary. Not impressed especially seeing as one is selling at yesterday's depressed price.

Looking for Tony Carter to step up to the plate at $2.50 and show his support seeing as management seem to be lacking conviction.

[boysy]

From a TA perspective where is the support from here ?

[kelfy]

Horrible to see AIR in free fall even I don't hold any for now.

[boysy]

The closing tonight could be brutal but keeping my powder dry

[Cool Bear]

Hoop, an update chart showing the next support level would be greatly appreciated!! CBear.

[OldGuy]

I view the $2.70 offer as quite a nice safety net, with any purchase below that value effectively underwritten. Your thoughts?

[Raz]

The closing tonight could be brutal but keeping my powder dry

Plain ugly what ever way you look at it.

[boysy]

The crowd behind the offer are not going to pay 2.70 when the SP is below that level simple as that.

[Mickey]

"Those magnificent men in their flying machines,
they go up tiddly up up,
they go down tiddly down down.............."

Fundamentals still appear strong - unless of course there's something that those on the inside know that we on the outside are yet to find out. I'm trying to remain positive on this one and may look to pick up a few more when it starts heading back the other way.

[stoploss]

I view the $2.70 offer as quite a nice safety net, with any purchase below that value effectively underwritten. Your thoughts?

I was wondering how many they would take ...who knows they might have shorted it above 3.00 and will honour a few at 2.70 ........

[percy]

The problem is too many Auckland shareholders drive up to AIR's agms in Mercedes Benz S types.The management and staff of AIR want the same sort of cars,so they sell their "free" shares to get them.
Wise investors in Christchurch drive their Suzuki Swifts and Toyota Corollas to agms.!!!!...lol.

[Beagle]

Anyone looking for a parachute at $2.70 will be disappointed for sure. The devil is always in the detail and anyone looking to jump will find there's a fail safe clause that means said parachute will not activate in circumstances where "insert whatever cover their backside clause you think these people will have inserted".

[Beagle]

The problem is too many Auckland shareholders drive up to AIR's agms in Mercedes Benz S types.The management and staff of AIR want the same sort of cars,so they sell their "free" shares to get them.
Wise investors in Christchurch drive their Suzuki Swifts and Toyota Corollas to agms.!!!!...lol.

At least some of us know how to enjoy our money...what's the point in having it otherwise :rolleyes:

A client of mine swears his current model Audi S8 saved his life in a severe car accident. Reckons if he'd been driving a clapped out second hand Japanese import like some strange wealthy people do he'd be dead. Go figure the opportunity cost on that one. Maybe senior AIR management know the value of a decent car and who could blame them for that...can't drive those silly electric ones the company gives them very far on the weekend...won't even make it to their beachfront property at Pauanui

[sharp]

What the hell happened today? Missed all the action whilst flying about - in Air NZ of course.

[TheHunter]

What the hell happened today? Missed all the action whilst flying about - in Air NZ of course.

Still riding down the steep section of the roller coaster track...

[skid]

In answer to your first question --'it keeps my mattress nice and soft ,therefore I sleep well at night''

I seem to remember Warren Buffet lives a very modest life.(but Im sure he has air bags in his car)

Its interesting how everything has its own perspective--this SP range didnt seem so bad last Sept.

Edit--Dang you've got to be quick around here (that was in response to Rogers post)

[Beagle]

In answer to your first question --'it keeps my mattress nice and soft ,therefore I sleep well at night''

I seem to remember Warren Buffet lives a very modest life.(but Im sure he has air bags in his car)

Its interesting how everything has its own perspective--this SP range didnt seem so bad last Sept.

Edit--Dang you've got to be quick around here (that was in response to Rogers post)

Yeah it was $2.50 at the start of the annual meeting. Pleased I let some go at $3.03.

[couta1]

A little lesson from Couta from the bad old days of Chorus. I lost 100k by selling out at the time amongst all the panic and turmoil, now if I had just held those shares to this day I would be 110k in profit now. End of lesson, have a nice weekend.:cool:

[workingdad]

Going to have a couple or more of single malts tonight.

I've had a lesson this week and I think this fickle paychophrenic market and I are going to part company for a while until I see the anti psych meds kicking in. AIR is shedding 20% of its value in a week without any justifiable cause and panic selling seems to rule the roost.

[Beagle]

I'm looking for a confirmed bottom and will then rebalance to my maximum self imposed limit of 10% portfolio allocation. No panic here, just disappointment but tempered with the knowledge that I will be rebalancing soon with some more "very cheap' AIR shares and said dividends from same will add nicely to my Switzerland travel fund, (already covered the Vegas trip from the last dividend) :)

[Nasi Goreng]

A little lesson from Couta from the bad old days of Chorus. I lost 100k by selling out at the time amongst all the panic and turmoil, now if I had just held those shares to this day I would be 110k in profit now. End of lesson, have a nice weekend.:cool:

In the olden days 2007, I bought TPI for about $10 and watched like a stunned possum as it fell all the way down to about $2, today it trades at $0.80. It wasn't a big parcel but one of the best lessons I ever learned. The lesson there is they don't always come back. I hope Air NZ can find a footing around here... It doesn't look right now like it could become a shocker of an investment but things can change quickly. Have a cool weekend also.

[axe]

axe got greedy on close :)

[winner69]

There's no way to sugar coat the fact that it is disconcerting to see such a wide range of senior executives including Chris Luxon treating their lucrative share incentive packages as nothing more than a mechanism to increase their already extremely generous salary. Not impressed especially seeing as one is selling at yesterday's depressed price.

Looking for Tony Carter to step up to the plate at $2.50 and show his support seeing as management seem to be lacking conviction.

In Sep 2014 tony bought 10,000 shares .......at $2.19

Has just over 100,000 I think .....suppose a reasonable 'commitment'

[Beagle]

He's bought more since then mate. Somewhere around $2.50 if I remember correctly. Not a material size in comparison to what management have been selling though.

[skid]

I assume the $1.5 mil was management?---Tonys got $246,000 by what you say.

Its just a shame Management had such bad timing on their selling. In doing such a good job on other things they have wreaked a bit of havoc.(a vulnerable time)
This may have been something arranged ahead ,which would make it a coincidence so Im not jumping to conclusions--If thats the case I guess its just bad luck--hopefully that is out of the way as more management selling would be pretty painful.

after rogers post I stand corrected on Tonys parcel..

[Beagle]

It is a real shame they didn't renew the clause in the company's constitution which enabled a modest share buy-back, again I am going off memory here but there used to be a clause that enabled the company to buy back up to 3% of its issued shares and spend up to $60m doing so. I would have thought this would have been the ideal time for the company to be executing a modest buy-back programme seeing as the shares based on consensus forecast of 56 cps earnings are trading on the all time low PE of 4.3.

Dividend yield based on consensus average forecast for the next 3 years of 22.5 cps fully imputed is now a stunning 22.5 / 0.72 = 31.25 cps gross / 246 = 12.7% so its absolutely earnings accretive for remaining shareholders for the company to buy back some of its own shares using their billion dollar plus cash reserves, especially when they're earning maybe 1% on call account with those funds.

What is the point of buying new planes just so the company can have the newest and shiniest hardware on the tarmac when you can buy back your own shares on those stunning metrics and benefit all remaining shareholders ?

SP closed last Friday at $2.78. One week later and its down a whopping 11.5%. Just as well there was only four trading days eh ! Market suggesting a VAH sale will be easier said than done ?

[couta1]

I would suggest that 90% of those selling this week wouldn't have any logical reason for selling other than follow the leader, and with management taking the lead,you can see where the problem lies (It seems the fat cats are happy to lay on the porch getting fatter happy to watch the alley cats playing down below)

[boysy]

Do people not think the SP has simply got ahead of itself and now with higher levels of competition the ongoing profitability of Air NZ is in question. While I think all party's expect them to have a ripper fy16 it's the longer term outlook which is troubling. On a dcf basis the future is simply looking not as flash which helps explain the recent though rather dramatic pull back. Getting hung up on the yield of a particular stock is dangerous especially when dealing wig such a voloitile industry. Must confess I sold out of my entire Air holding following the schocker of an Ann from QAN 2 weeks ago.

[Bobdn]

Stop torturing yourselves:) let's see where we at in a year's time.

[percy]

We often talk on Sharetrader about risk,having too much of your portfolio in one share.
Yet the AIR executive has nearly all his risk in AIR.He is not only works there,but holds AIR shares as well.
Too many eggs in one basket.
Would make sense to sell down his "free" AIR shares and spread his risk.

[Bobdn]

Absolutely right Percy. Most economically rational thing to do is divest the shares ASAP.

[Raz]

I would suggest that 90% of those selling this week wouldn't have any logical reason for selling other than follow the leader, and with management taking the lead,you can see where the problem lies (It seems the fat cats are happy to lay on the porch getting fatter happy to watch the alley cats playing down below)

possibly they wanted to maintain their capital base, nothing worse than thinking you have a certain number to then lose it, easier to have never have had it at all.

[winner69]

We often talk on Sharetrader about risk,having too much of your portfolio in one share.
Yet the AIR executive has nearly all his risk in AIR.He is not only works there,but holds AIR shares as well.
Too many eggs in one basket.
Would make sense to sell down his "free" AIR shares and spread his risk.

They weren't really free - they sweated blood and tears to get them from doing a brilliant job and making shareholders rich. Probably spent weeks and months away from the family as well.

Just cashing in his 'pay cheque' -

[fiasco]

Agree winner, I have a feeling that may be the last of the selling pressure coming into May - I hope! Just purchased a small position. Talk about sheep follows sheep.

[percy]

They weren't really free - they sweated blood and tears to get them from doing a brilliant job. Probably spent weeks and months away from the family as well.

Just cashing in his 'pay cheque' -

And that is what it is about,the shares are HIS to do whatever HE wants,;buy a car,reduce HIS risk of having too many eggs in one basket,or whatever HE decides .

[RTM]

The selling by AIR staff is a concern. I don't think they would be doing this if they weren't sensing some turbulence ahead. I wonder if it is something to do with VAH as well as the other factors.
Nevertheless, I am going to sit it out, average buy 2.44, and they are 6% of my portfolio. If they stabilise at about current levels....may buy a few more.
Have a good weekend everyone.
RTM.

[babymonster]

Next major support is 2.35. After that is below 2. RSI suggest its over sold and at the level close to last 2.35 level. So I don't think it will go below 2.35.

[B747-419]

Oil still climbing. Wonder what AIR's hedging situation is

[couta1]

Stop torturing yourselves:) let's see where we at in a year's time. Spoken like a true Chorus surviver and good advice to boot, all the technicals may say oversold but don't expect any quick rises from the ashes this time, she's going to be a more arduous process requiring patience and a very long ride on the rollercoaster.:cool:

[Bobdn]

Spoken like a true Chorus surviver and good advice to boot, all the technicals may say oversold but don't expect any quick rises from the ashes this time, she's going to be a more arduous process requiring patience and a very long ride on the rollercoaster.:cool:

ha, exactly!

[Raz]

And that is what it is about,the shares are HIS to do whatever HE wants,;buy a car,reduce HIS risk of having too many eggs in one basket,or whatever HE decides .

Well that is the legal perspective however having worked as an executive three years ago at at fortune 500 no way would they allow you to sell material shares in this context without you knowing it will effect you job prospects. It is heavily frowned upon across all major companies. It is unusual in a downswing to see material parcels in the US or UK sold by executives, only on the up or when you exit.

[Raz]

http://www.stuff.co.nz/travel/news/79380764/air-new-zealand-says-southland-needs-to-pump-up-the-volume-on-tourism

Interesting, shows some barrier to growth and what they are trying to do.

[K1W1G0LD]

Spoken like a true Chorus surviver and good advice to boot, all the technicals may say oversold but don't expect any quick rises from the ashes this time, she's going to be a more arduous process requiring patience and a very long ride on the rollercoaster.:cool:

But Still, seems like a good old Warren Buffet style opportunity coming up here.

[winner69]

The CFO seems to be the biggest 'culprit' in hocking off his shares - nearly $3 million worth in recent times

The 'furore' over management selling shares is more about the (outrageous?) remuneration policy that AIR has than anything else.

Oh well, if shareholders dont mind paying these guys that much they also need to understand these guys need to monetize their pay somehow.

[macduffy]

But Still, seems like a good old Warren Buffet style opportunity coming up here.

Tongue firmly in cheek, presumably. I think we know WB's views on airline stocks!

AIR's still a great trading stock, IMO, but not for the bottom drawer.

[TheHunter]

I'm still baffled by this.

QAN although has taken a tumble is trading at a 2016 P/E just below 6, S&P 500 airlines index trade at a forward P/E of around 7.5.... AIR is trading at a P/E of around 4.5...

Sure, QAN has signaled softened demand & oil prices have risen... but relative to prior years, tourism is high & oil is still relatively cheap.

Is it just the market's expectation of these macro economic drivers to continue to get worse? Or is there something else driving this?

My apologies if these all seem blatantly obvious, still getting my head around airline stocks! The sell off just seems overdone IMO on the face of it all.

[Beagle]

I'm still baffled by this.
QAN although has taken a tumble is trading at a 2016 P/E just below 6, S&P 500 airlines index trade at a forward P/E of around 7.5.... AIR is trading at a P/E of around 4.5...

Sure, QAN has signaled softened demand & oil prices have risen... but relative to prior years, tourism is high & oil is still relatively cheap.

Is it just the market's expectation of these macro economic drivers to continue to get worse? Or is there something else driving this?

My apologies if these all seem blatantly obvious, still getting my head around airline stocks! The sell off just seems overdone IMO on the face of it all.

You're not the only one. Tourism is still growing strongly, circa 10%, migration is at yet another all time annual high to the year to 31 March, the latest operating stat's to March 31 looked fine, loads are still running at 84.5% YTD, the highest they've been in years, yields are still very good in the context of low oil prices and QAN announced a slight pullback in expansion for Q4 Fy16 but is still planning on fleet expansion of 6-7% next year in line with demand growth. Tourism growth to Australia was running at 8% per annum last time I checked.

But wait there's more. At the end of January 2016 AIR management locked in forward cover for the maximum allowable amount within their policy guidelines, this when oil was $30 barrel.

From a technical perspective things look truly shocking, in fact if we dip and stay below $2.40 next week it would appear the next support level is somewhere around $2.

From a fundamental perspective AIR has never traded on such compelling fundamentals to the best of my knowledge in its 76 year history, yes 76 years old today.

But that's not all. Our dollar has been rising since last balance date and if its somewhere around U.S.70 cents gearing will be lower, offshore financing and operating leases are converted at balance date at the spot rate and capex this year will also be lower in $N.Z.

SP dropped 32 cents in one week on no new news, go figure but here's my 2 cents worth. The market absolutely hates uncertainty and I guess this is as good an example as you'll ever see.
1. QAN's announcement appears to have been somewhat misinterpreted by the market and the massive downdraft in QAN's stock has rubbed off on AIR.
2. Secondly, the market hates the uncertainty surrounding AIR's VAH stake and wants the deal done yesterday. This surely isn't practical with regulatory consents and all required.
3. Once downward momentum started and technical support level's were broken fear started to grip shareholders, fear that was exacerbated by senior executives selling their shares.

In my view the fall looks overdone but there's plenty of negative sentiment at the moment so when it might recover is anyone's guess but in my view it would take a catalyst and that could well be the successful sell down of the VAH stake.

Based on closing prices on Friday and based on consensus analyst forecasts for FY16
AIR PE FY 16 4.35
QAN PE FY16 5.71

We all know there's more competition coming and such is the case for all airlines...why AIR's forward PE is so much lower than other airlines when AIR's performing so well, that's the real mystery.

[sb9]

SP dropped 32 cents in one week on no new news.

Hmmm...I'm sure those in the broker community have some news amongst themselves, all we retail investors know is of senior execs selling.

[Beagle]

Hmmm...I'm sure those in the broker community have some news amongst themselves, all we retail investors know is of senior execs selling.

I hear what you are saying. First N.Z. investment banking team are tasked in N.Z. with assisting AIR with their review of VAH. Supposed to be internal Chinese wall between investment banking division and the rest of the firm and between that firm and other brokers. I'm feeling the need for another Tui...

[TheHunter]

Appreciate your response Roger, greatly informative as always.

Screaming for a top up... unless there is some information not yet publicly available that says otherwise...

I'm unsure how much value TA really adds here in terms of medium/long term holding, I personally think of it on the basis of the random walk theory... Oh well, if logic always prevailed there would be less opportunity for arbitrage :t_up:

[skid]

You're not the only one. Tourism is still growing strongly, circa 10%, migration is at yet another all time annual high to the year to 31 March, the latest operating stat's to March 31 looked fine, loads are still running at 84.5% YTD, the highest they've been in years, yields are still very good in the context of low oil prices and QAN announced a slight pullback in expansion for Q4 Fy16 but is still planning on fleet expansion of 6-7% next year in line with demand growth. Tourism growth to Australia was running at 8% per annum last time I checked.

But wait there's more. At the end of January 2016 AIR management locked in forward cover for the maximum allowable amount within their policy guidelines, this when oil was $30 barrel.

From a technical perspective things look truly shocking, in fact if we dip and stay below $2.40 next week it would appear the next support level is somewhere around $2.

From a fundamental perspective AIR has never traded on such compelling fundamentals to the best of my knowledge in its 76 year history, yes 76 years old today.

But that's not all. Our dollar has been rising since last balance date and if its somewhere around U.S.70 cents gearing will be lower, offshore financing and operating leases are converted at balance date at the spot rate and capex this year will also be lower in $N.Z.

SP dropped 32 cents in one week on no new news, go figure but here's my 2 cents worth. The market absolutely hates uncertainty and I guess this is as good an example as you'll ever see.
1. QAN's announcement appears to have been somewhat misinterpreted by the market and the massive downdraft in QAN's stock has rubbed off on AIR.
2. Secondly, the market hates the uncertainty surrounding AIR's VAH stake and wants the deal done yesterday. This surely isn't practical with regulatory consents and all required.
3. Once downward momentum started and technical support level's were broken fear started to grip shareholders, fear that was exacerbated by senior executives selling their shares.

In my view the fall looks overdone but there's plenty of negative sentiment at the moment so when it might recover is anyone's guess but in my view it would take a catalyst and that could well be the successful sell down of the VAH stake.

Based on closing prices on Friday and based on consensus analyst forecasts for FY16
AIR PE FY 16 4.35
QAN PE FY16 5.71

We all know there's more competition coming and such is the case for all airlines...why AIR's forward PE is so much lower than other airlines when AIR's performing so well, that's the real mystery.

I would have thought a rising $Kiwi would hurt,more than help,making ticket prices even more expensive to foreigners or less profit for AIR(in the lower foreign currency) It normally hurts company's of a country with a high dollar.

I agree with the former poster that big management selling was a disaster for the SP and should have been handled in a much better way. The company should have rules in place that insure that the company comes first. Aside from the SP it has created a chink in the Armour of the notion that management are top of the line. (whether its deserved or not)
Now we are torn between two thoughts.... that the SP is ridiculously cheap compared to what we have gotten used to ..and..that there is some disaster around the corner

[winner69]

I think these managers selling is just noise - it has had no impact on the share price

thats how i see it anyway

[macduffy]

I think these managers selling is just noise - it has had no impact on the share price

thats how i see it anyway

Really? Noise or not, I agree with Roger that it's one of the contributory factors causing the shareprice weakness. I don't think it's realistic to expect executives to refrain from selling - within the allowable window - on the grounds that it may affect the shareprice. Shareholders should be aware of the possibility of this; after all, executive share schemes are a common feature of executive remuneration these days. Trading on insider knowledge is a different matter of course.

The "noise", if it exists, should die down quickly. On the other hand.......

[Bjauck]

I know that the execs selling their shares has been a bitter pill to swallow for some shareholders. However spare a thought for passengers http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11631378
There is a good reason why flight crew have different meals. It could still turn out to be bad airport food....

[workingdad]

I know that the execs selling their shares has been a bitter pill to swallow for some shareholders. However spare a thought for passengers http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11631378
There is a good reason why flight crew have different meals. It could still turn out to be bad airport food....

Passenger X vomiting at airport prior to boarding - doubt it has anything to do with the airport or airline for that matter.

[couta1]

The brokers consensus low target of $2.89 seems a bit meaningless right now, so looks like the high target of $3.45 has more substance to it, so we'll settle for that aye:cool:

[Bjauck]

Passenger X vomiting at airport prior to boarding - doubt it has anything to do with the airport or airline for that matter. According to the Herald story: five sick passengers and one crew member were assessed by St John ambulance with two being taken to Middlemore Hospital. Precautionary assessments probably...and as you say the vomiting passenger sounds like he became ill prior to boarding the plane in Singapore.

Stuff pulled no punches with its headline trying to be the first with a medical diagnosis: Air New Zealand passengers taken to hospital after food poisoning lock down http://www.stuff.co.nz/travel/travel-troubles/79475337/air-new-zealand-passengers-taken-to-hospital-after-food-poisoning-lock-down

[skid]

According to the Herald story: five sick passengers and one crew member were assessed by St John ambulance with two being taken to Middlemore Hospital. Precautionary assessments probably...and as you say the vomiting passenger sounds like he became ill prior to boarding the plane in Singapore.

Stuff pulled no punches with its headline trying to be the first with a medical diagnosis: Air New Zealand passengers taken to hospital after food poisoning lock down http://www.stuff.co.nz/travel/travel-troubles/79475337/air-new-zealand-passengers-taken-to-hospital-after-food-poisoning-lock-down

This is just a human interest story--It has nothing to do with the running of the airline or its service Imo,esp. since it was coming from Singapore--i think this is more in the s--t happens category.

with the exception .i guess,of not keeping passengers more informed when delayed on the runway.

[mikeybycrikey]

Reading the posts here over the past week, it seems to be a series of people trying to catch a falling knife. Something that I learnt not to do after I started reading ST (but often struggle to do).

I finally decided to do a bit of analysis on the operating stats. I have been expecting that AIR might reach the top of its rise at some point so thought I should understand the data that AIR publishes every month.

I threw the operating stats for the past three years into a spreadsheet and tried to understand them. I hadn’t thought too much about the drop in short-haul yield from -0.2% to -1.2%... then I read that this is the change in financial YTD yield compared with the same period in the previous year. Not just monthly change in yield but financial YTD change. Hmmm. 9 months into the financial year, a small change in YTD yield could lead to a big change in monthly yield.

A little bit of analysis showed me that domestic yield for March was 7.6% lower than March 2015, Tasman yield was down 9.3% and long-haul down 0.3%. This is yield falling off a cliff.

Obviously there is a large potential for this to be inaccurate since I’m inferring a lot from very little information and I’m not even 100% sure what all the terms that AIR use actually mean. But this a significantly larger drop in yield than in the past 3 years.

This is a bit of a concern and could have something to do with the latest drop in SP. Airlines operate on pretty thin margins and a drop in yield of this size (if I'm correct) is potentially a big problem, even with the low oil price.

[forest]

A little bit of analysis showed mikey that domestic yield for March was 7.6% lower than March 2015, Tasman yield was down 9.3% and long-haul down 0.3%. This is yield falling off a cliff.

Good post mikey.

[percy]

A little bit of analysis showed mikey that domestic yield for March was 7.6% lower than March 2015, Tasman yield was down 9.3% and long-haul down 0.3%. This is yield falling off a cliff.

Good post mikey.

Add to this the fact Easter fell in March this year,and you can understand there appears to be a problem.

[OldGuy]

Ummm...how about general market sentiment as a key driver of the SP fall? Nearly all the stocks I follow got hammered this week, not just AIR. IMHO, this is likely to be a significant piece of the puzzle....

[forest]

Maybe the ones you follow old guy but, NZX fell less than 1% last week, AIR down 11% plus.

[OldGuy]

Yes, I realise it fell quite hard. My point was that a lot of others did, too, and for no apparent reason.

AIR's significantly harder fall is likely to reflect its (presumably) high beta, but I agree that there are also other factors at play here...

[Beagle]

Reading the posts here over the past week, it seems to be a series of people trying to catch a falling knife. Something that I learnt not to do after I started reading ST (but often struggle to do).

I finally decided to do a bit of analysis on the operating stats. I have been expecting that AIR might reach the top of its rise at some point so thought I should understand the data that AIR publishes every month.

I threw the operating stats for the past three years into a spreadsheet and tried to understand them. I hadn’t thought too much about the drop in short-haul yield from -0.2% to -1.2%... then I read that this is the change in financial YTD yield compared with the same period in the previous year. Not just monthly change in yield but financial YTD change. Hmmm. 9 months into the financial year, a small change in YTD yield could lead to a big change in monthly yield.

A little bit of analysis showed me that domestic yield for March was 7.6% lower than March 2015, Tasman yield was down 9.3% and long-haul down 0.3%. This is yield falling off a cliff.

Obviously there is a large potential for this to be inaccurate since I’m inferring a lot from very little information and I’m not even 100% sure what all the terms that AIR use actually mean. But this a significantly larger drop in yield than in the past 3 years.

This is a bit of a concern and could have something to do with the latest drop in SP. Airlines operate on pretty thin margins and a drop in yield of this size (if I'm correct) is potentially a big problem, even with the low oil price.

YTD yield is down 1.2% average in $N.Z.(their reporting currency) across the network on RPK's flown which have grown at their fastest rate in the airlines 76 year history.
Did people really expect that yield would be up when they've got something like an extra 15% YTD extra capacity to fill and at a time when jet fuel is the cheapest its been in many many years ?
Did people really expect if QAN got belted down a whole dollar AIR would escape any fallout ?
We all know Jetstar's regional expansion would have some effect on domestic yields...surely this is not rocket science and something that the market already understands !

I know some of us would like to forget the world cup cricket last year, (well certainly the final) but the fact remains that boosted last year's traffic at this time of year and yet load factors despite fast route expansion have held at record high level's...surely a encouraging factor ! I'd suggest the timing of Easter is irrelevant.

[winner69]

This from Stats NZ re CPI for March quarter


International and domestic air fares made downward contributions, down 12 percent and 4.8 percent, respectively. International air fares tend to be affected by seasonal trends, for example, peak seasons and holiday periods.

[Beagle]

This from Stats NZ re CPI for March quarter


International and domestic air fares made downward contributions, down 12 percent and 4.8 percent, respectively. International air fares tend to be affected by seasonal trends, for example, peak seasons and holiday periods.

AIR's route wide network yield only falling 1.2% YTD in the context of ultra low oil prices and other airline's fare decreases is a truly stellar result !!

[Raz]

Given the 15% extra capacity I think they are working wonders although yields will start to fall on the AUK-LAX route in particular at some point overall, Rodger not sure when you are going to LA/Vegas however as at now pricing matching in November picking up flights 1049$ return economy with AIR. (It was September last two weeks ago) Qantas is discounting all over and AIR does follow just more limited seats) If I was you and had the time pick up the Honolulu current deal return with AIR, wide dates available, stop over and then look at Air Alaska or similar first class to the US West Coast. If I recall you want to go to Honolulu as well...

[winner69]

C'mon mickey - you are capable of doing better than that.

As you say a lot of data missing but i think some of 'inferences' you have made aren't that robust - even though a few posters believe (or want to) you.

[Beagle]

Thanks Raz, might look into that.

[forest]

AIR's route wide network yield only falling 1.2% YTD in the context of ultra low oil prices and other airline's fare decreases is a truly stellar result !!

True down 1.2% is not alarming but what mikey was pointing out I think is that the previous month Feb 16 it was down 0.7%.
This extra 0.5% reduction, is calculated as a Yield to date of the financial year. To drop halve a % between 7th and the 8th month of the financial year seems material. It either means March 16 had a very low yield or March 15 very high or as I suspect a combination of those two.

[boysy]

Plenty of holders here seem content to look the other way to the trifecta of rising oil, rising competitions and rising NZD. it would seem to be that air nz can only trade off their premium nz reputation for so long before punters jump ship to cheaper carriers (as many air holders have admitted to doing) are the yield decreases just beginning as the competition has yet to be reflected in the stats of say the nz usa route with AA and United due to commence later on this year.

[winner69]

True down 1.2% is not alarming but what mikey was pointing out I think is that the previous month Feb 16 it was down 0.7%.
This extra 0.5% reduction, is calculated as a Yield to date of the financial year. To drop halve a % between 7th and the 8th month of the financial year seems material. It either means March 16 had a very low yield for March 15 month very high or as I suspect a combination of those two.
Part (if not most) of the March month decline can be attributed to the mix of domestic, transtasman and international

Domestic (yield ~27 cents) RPKs were only up 0.3% while transtasman (yield ~12 cents) RPKs were up 1.8% and long haul (yield ~11 cents) RPKs were up a whooping 10.3%

While international travel (esp the long haul stuff) becomes a bigger and bigger part of the AIR business Group Yields will continue to drift down.

Remember yield is $ per RPK - longer the flight lower the yield

But those CASKs are looking bloody impressive - far more important metric than yields

[forest]

Part (if not most) of the March month decline can be attributed to the mix of domestic, transtasman and international

Domestic (yield ~27 cents) RPKs were only up 0.3% while transtasman (yield ~12 cents) RPKs were up 1.8% and long haul (yield ~11 cents) RPKs were up a whooping 10.3%

While international travel (esp the long haul stuff) becomes a bigger and bigger part of the AIR business Group Yields will continue to drift down.

Remember yield is $ per RPK - longer the flight lower the yield

But those CASKs are looking bloody impressive - far more important metric than yields

Thanks for the detailed explanation. Forest

[RTFQ]

Plenty of holders here seem content to look the other way to the trifecta of rising oil, rising competitions and rising NZD. it would seem to be that air nz can only trade off their premium nz reputation for so long before punters jump ship to cheaper carriers (as many air holders have admitted to doing) are the yield decreases just beginning as the competition has yet to be reflected in the stats of say the nz usa route with AA and United due to commence later on this year.

I doubt AA or United will be any threat to AIR. United makes more yield with AIR operating its services with code share arrangements than operating the route itself. American wage costs are significantly higher than AIRs. Australian QF's costs likewise.

AA and United re-entering the South Pacific I think is more about National strategy, maybe trying to block Emirates round the world ambitions.

Whenever capacity is increased yield will always suffer short term. Its all about the profit at the end of the day.

Given the amount of management selling lately its hardly likely that known bad news is around the corner, otherwise insider trading accusations will fly.


On the upturn I'll be back in.

[couta1]

The main reason for the price drop IMO is because of the Quantas drop off combined with the sheeple effect. Air is a much better business than Quantas in so many ways, in fact if it wasn't for the low oil prices they would still be deeply in the red, not to mention they pay no dividends and are not likely to. Expecting a good full year divvy from Air plus a special.

[winner69]

I think too much concern about this yield thing

A slide in the H1 profit announcement "Changes in Profitability' showed revenues were up $247m on pcp

They broke this down into $281m from 'Passenger Capacity' (ie flying more passengers further) off set by $49m less 'yield' (prices) and a +$15m 'Others" (cargo and stuff)

To put that yield impact in context - its $49m on $2,300m or just over 2% (lower prices). Hardly your 50% or 60% off discount sales at Briscoes or Kathmandu is it. Air NZ seem to managing 'pricing' very well.

AIR strategy re growth is to grow markets, fly to new places and all that of stuff. They seem to be succeeding with that revenue growth eh - and it isn't coming from buying market share

Those monthly stats - the key number is RPKs - if they are more than healthy things will be more than OK

That chart in the presentation also showed that fuel cost prices saved them $252m (and they did spend $68m more on fuel because they flew further). CASKs can wait for another day

[OldGuy]

A bit of positive news to help restore balance

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11631770

[Baa_Baa]

I think there's a far far too much volume in this sell off to attribute it to the sheeple, the flock cannot muster anywhere near enough shares (or cognisance) to account for the volume sold. This is big smart money aggressively taking profits, for whatever reasons, selling to the knife catchers, who one might argue are the sheeple.

BAA

[OldGuy]

With a 7% net dividend yield, I can sit on this for years at absolutely no direct financial outlay. Happy to wait for $4 to hit in the next 2 years or so, providing a 50% cap gain with no intermediary financial strain...

[Master98]

Given the amount of management selling lately its hardly likely that known bad news is around the corner, otherwise insider trading accusations will fly.
Agreed, if those high profile managers selling shares because of bad news coming ,then definitely in violation of related trading rules.

[couta1]

I think there's a far far too much volume in this sell off to attribute it to the sheeple, the flock cannot muster anywhere near enough shares (or cognisance) to account for the volume sold. This is big smart money aggressively taking profits, for whatever reasons, selling to the knife catchers, who one might argue are the sheeple.

BAA Big money is not always smart money and how do you know how many of them are taking profits as opposed to losses?

[winner69]

Good charts by baa_baa et al on another thread

I reckon that if they redraw them in a few months time they will be asking what was all the fuss about bzck in April

[Bjauck]

This is just a human interest story--It has nothing to do with the running of the airline or its service Imo,esp. since it was coming from Singapore--i think this is more in the s--t happens category.

with the exception .i guess,of not keeping passengers more informed when delayed on the runway.

How you deal with the unexpected is important. The airline industry is in the service industry and how it interacts with its customers is important, so human interest stories are important and have an impact. How should you deal with a passenger, who may have been seen by some other passengers being ill prior to boarding the flight? For a start, other paying passengers would be seated close to this ill passenger. How do you deal with a medical situation, even if it originated elsewhere, on board the plane? How do you deal with a situation requiring assessment and treatment of multiple people on board your plane? How does the company deal with the media?

[Carpenterjoe]

How you deal with the unexpected is important. The airline industry is in the service industry and how it interacts with its customers is important, so human interest stories are important and have an impact. How should you deal with a passenger, who may have been seen by some other passengers being ill prior to boarding the flight? For a start, other paying passengers would be seated close to this ill passenger. How do you deal with a medical situation, even if it originated elsewhere, on board the plane? How do you deal with a situation requiring assessment and treatment of multiple people on board your plane? How does the company deal with the media?

Yip, Bjauck very right, AIR lost my business/shareholding a few years ago, this was due to their arrogance and poor and inconsistent service.
Service levels and showing real interest in your customers complaints is important.

[OldGuy]

Good charts by baa_baa et al on another thread

I reckon that if they redraw them in a few months time they will be asking what was all the fuss about bzck in April

exactly this. I made a similar mistake with this stock a year back. Got in at $1.96, sold out in semi-panic a month later at $1.85. Two months later it was $2.80ish...

[mikeybycrikey]

To put that yield impact in context - its $49m on $2,300m or just over 2% (lower prices). Hardly your 50% or 60% off discount sales at Briscoes or Kathmandu is it. Air NZ seem to managing 'pricing' very well.

The $499 one way fares to Buenos Aires that AIR are currently advertising has a yield of 4.8c. That's a 56% discount to their long-haul international yield of 10.8c from the interim report. Sure that's only one fare and it's offset by the limited numbers at that price, and other fares with much higher yield than 10.8c, like business class (where yield is more like 40c)

That was sort of my point though. Until last month their yield management had been superb. But March was a bit of an anomaly. Will be interesting to see what April is like. Is last month's pricing really an anomaly or is it the new normal? Only time will tell. If the April figures show a domestic YTD yield change of -1.7% then it's the new normal. If it's -1% then it was just a one-off anomaly.

I am a little surprised that long haul yield hasn't been hit yet. I'm getting many emails from AIR with news about various sales (today it was Ho Chi Minh, Singapore, Shanghai, Tokyo, HK and BA). And the US tickets are going to get cheaper with new competition.

I think that yield is on seats flown during the month rather than seats sold but I couldn't find a way to confirm that. That means that cheaper seats sold today won't have an effect on yield until a later date. (Can anyone confirm this?)

Remember that the H1 2016 result was a profit before tax of $457m on revenue of $2698m. That's a profit margin of 16.9%. If yield falls by 17% then they are making a loss. I'm not suggesting that will happen any time soon. Just saying that a -8% change in yield in one month is uncomfortably large, no matter how much they grow RPK. (edit: that's not quite right is it. passenger rev was $2308m. So yield would need to drop by 20%, with all other things remaining equal).

[OldGuy]

Mikey - you're aware that AIR has maintained double digit EBITDA% since 2007, so managed to stay profitable even during the worst economic climate since the 1930s??

I'd call that quite resilient.

[Jantar]

............. That's a profit margin of 16.9%. If yield falls by 17% then they are making a loss. ....
No, no, no. That is an error in understanding just what the yield is.

The yield is the amount of profit per seat, so a seat costing the airline $1000 and being sold for $1169 gives a yield of $169 or 16.9%. If the yield drops by 17% then it has dropped to $141 and still has a yield of 14.1%
A drop in yield accompanied by an increase in load factor would equate to an increase in profit,
Now, if the revenue dropped by 17% with a similar drop in costs then AIR would make a loss.

[Beagle]

Too much focus on yield and especially the change from Feb stat's to March stat's.
But before we move away from that let's pose the question of why the change for that month. March 2015 N.Z. and Aust hosted the Cricket World cup and loads were unusually high for that month at 87.5%because of that. Naturally with higher loadings and many pax needing to travel on defined dates they were able to extract premium pricing in March 2015.

Now lets zoom out a little and look at the first half, impact on yield compression as it compared to pax revenue growth.
YTD yields for the first half to 31 Dec 2015 were down 1.1%. Pax revenue growth was $281m less yield compression of $49m gives net pax revenue growth of $247m
This on RPK (revenue passanger kilometres) growth of 17%.

Now let's look at CASK.
CASK (Cost per available seat kilometre) was down from 10.87 cpk to 9.44 cpk down 11% on an average oil price of $60 barrel and average exchange rate of 65 cents U.S.
(Oil is materially lower than this now and the exchange rate materially better)

Now lets compare all this to the latest YTD data.
YTD yields were down 1.2%,, (compared to 1.1% in the first half, hardly changed, (in fact probably not changed at all given more growth in long haul v short haul over the summer season) so no great momentous falling off a cliff on a network wide basis at some have incorrectly said, in fact barely changed despite extremely low fuel prices, which are far lower than those prevailing even as recently as the first half of this financial year. RPK growth 14.3%. No doubt substaintial further reduction in CASK this half.

Now lets look at the numbers for last half in terms of operating efficiencies.
Other points worth noting from the most recent analyst presentation at the time of the half year results announcement in Feb 2016 :-
Reduction in CASK delivered $227m in value and efficiencies from growth, fleet simplification e.t.c delivered $106m in value

Conclusion.
While everyone is well and truly entitled to their own opinion I feel based on the big picture the market has misinterpreted the March operating stat's and misinterpreted the seriousness of QAN's very slight rejigging of capacity. Many people seem to be inferring a substaintial fall off in yields and passanger demand and the operating stat's simply don't back that up.

Helpful Suggestion
Some people need to spend more time reading annual reports and analyst presentations and increasing their knowledge of the company before leaping to misguided conclusions.

[skid]

The main reason for the price drop IMO is because of the Quantas drop off combined with the sheeple effect. Air is a much better business than Quantas in so many ways, in fact if it wasn't for the low oil prices they would still be deeply in the red, not to mention they pay no dividends and are not likely to. Expecting a good full year divvy from Air plus a special.

As human beings ,we are always going to look for a reason,and should.(dreaming about $4 SP may be good for the spirit,but...) so here goes ,to me there are several factors--It all started with the Virgin air problem,that ,to me is when the doubt started to creep in,then a few anomalies in the figures(still stellar?) -Quantas takes a dive(obviously not good as those things inevitably rub off(remember market sentiment does not follow the hard set rules of mathematics and accounting) Then came management selling and the disastrous timing.
They may be just cashing in on some deserved income ,but if the Virgin thing is a bit of a dark cloud,they can sell with no conflict of interest(unless something has been finalized and they know about it) If they dont like where thats going ,there is no reason they cant sell,but in terms of the company and shareholders they could have handled it better.
Sheeple?.......well lets just say that ironically, I think that a poster named Baa Baa has got the best handle on that whole scenario.

PS--United code shares so I can understand that statement. But American Airlines having no affect on the mix with their cheaper prices and nice planes--dont agree with that.

[mikeybycrikey]

Mikey - you're aware that AIR has maintained double digit EBITDA% since 2007, so managed to stay profitable even during the worst economic climate since the 1930s??

I'd call that quite resilient.

I don't really like EBITDA as a measure. Especially in a capital intensive industry like an airline where D&A were 13% of revenue. To me ignoring D&A implies you're going to run the business into the ground (but maybe I misunderstand the measure). If you're talking about EBIT being double digits then that's a different story but I don't have those figures on me.

With my posts about yield, I'm not trying to say that AIR is badly run (quite the opposite in fact), just that the competitive environment might be getting tougher. As we have seen low oil prices are not necessarily good for airlines becasue they significantly increase competition. Interestingly this time has been different and yield has barely been hit with the drop in oil prices so there is fair bit of space for yields to fall to catch up to oil.

Enough about that from me now. I'm just going to hope that the SP comes back a little bit this week because even with my analysis I didn't sell out last week and am regretting that.

[couta1]

axe got greedy on close :) I've got the feeling that your greediness was timed to perfection.:cool:

[OldGuy]

Great post, Roger. I'm certainly not afraid to buy more this week!

[OldGuy]

I don't really like EBITDA as a measure. Especially in a capital intensive industry like an airline where D&A were 13% of revenue. To me ignoring D&A implies you're going to run the business into the ground (but maybe I misunderstand the measure). If you're talking about EBIT being double digits then that's a different story but I don't have those figures on me.

With my posts about yield, I'm not trying to say that AIR is badly run (quite the opposite in fact), just that the competitive environment might be getting tougher. As we have seen low oil prices are not necessarily good for airlines becasue they significantly increase competition. Interestingly this time has been different and yield has barely been hit with the drop in oil prices so there is fair bit of space for yields to fall to catch up to oil.

Enough about that from me now. I'm just going to hope that the SP comes back a little bit this week because even with my analysis I didn't sell out last week and am regretting that.

Ok, well that EBIT% has also stayed in a pretty good range, too. Happy?

[couta1]

The Sheep have been shorn, the rest of us are happy we kept our fleeces, bounce time:cool:

[Beagle]

Great post, Roger. I'm certainly not afraid to buy more this week!

You're not the only one with the finger hovering over the buy button I can assure you of that mate.

[winner69]

No, no, no. That is an error in understanding just what the yield is.

The yield is the amount of profit per seat, so a seat costing the airline $1000 and being sold for $1169 gives a yield of $169 or 16.9%. If the yield drops by 17% then it has dropped to $141 and still has a yield of 14.1%
A drop in yield accompanied by an increase in load factor would equate to an increase in profit,
Now, if the revenue dropped by 17% with a similar drop in costs then AIR would make a loss.

Jantar - yield is revenue per RPK (bums on seats) - not profit

[OldGuy]

You're not the only one with the finger hovering over the buy button I can assure you of that mate. Another 32 cent fall this week would see me throw the rule book on diversification into the round filing system if you catch my drift :)

haha, I LOVE that filing receptacle!

[couta1]

Come on Roger, you know you want to join me at 20% of portfolio allocation:cool:

[winner69]

Must go for a wander along the waterfront again .....and take a photo later today of the ticker showing $2.69 again

And plan on another visit in a week or so tosee it tick over $3

[Beagle]

Well lets just say that ironically, I think that a poster named Baa Baa has got the best handle on that whole scenario.

PS--United code shares so I can understand that statement. But American Airlines having no affect on the mix with their cheaper prices and nice planes--dont agree with that.

Just as well this lamb isn't thirsty for some milk...went looking for any recent insights and if I was a lamb looking for a feed I'd be bleating like there was no tomorrow :D
On the American airlines thing...this is by no means set in stone..I am looking for AIR to match and the other thing is I tried a variety of dates just flying to LAX in their summer, (renting a Mustang and driving to Las Vegas) and it was generally approx $400 dearer ($1600 to $1700 flying to LAX only) than flying to Las Vegas at $1,222, go figure ?
The other thing these are launch specials by AA to kick off their service which starts in June. Its easy to read too much into initial launch specials in terms of ongoing competition and effect on yields.
AA want to make a sustainable profit on this route just as much as AIR do.

[mikeybycrikey]

No, no, no. That is an error in understanding just what the yield is.

The yield is the amount of profit per seat, so a seat costing the airline $1000 and being sold for $1169 gives a yield of $169 or 16.9%. If the yield drops by 17% then it has dropped to $141 and still has a yield of 14.1%
A drop in yield accompanied by an increase in load factor would equate to an increase in profit,
Now, if the revenue dropped by 17% with a similar drop in costs then AIR would make a loss.

No, I pretty sure I'm not wrong about that. Yield, in airlines terms, is the average revenue per passenger per kilometre, before taking out any costs. Some random internet site tells me that it's a "Measure of average fare paid per mile, per passenger, calculated by dividing passenger revenue by revenue passenger miles (RPMs)"

Costs in relation to airlines are really difficult to calculate in a meaningful way. Arguably, the first seat on a flight from AKL-WLG might cost the airline $5,000. Every seat thereafter costs very close to $0.

Current yields at H1 2016 were 27.5c/km (domestic), 12.2c/km (Tasman and Pacific), 10.8 (International), 13.7 (overall group)

It's measured in cents per kilometre or cents per RPK. For example, taking WLG-AKL at 480 km and 27.5c/km that's $132, or AKL-EZE at 10334 km and 10.8 c/km, that's $1,116. These are very rough estimates at revenue per passenger on certain routes to illustrate.

A drop in yield accompanied by an increase in load factor might equate to an increase in profit.

[Beagle]

Come on Roger, you know you want to join me at 20% of portfolio allocation:cool:

Transferring more funds over into my ANZ securities call account today and then I'm off to the doctor and getting some stronger blood pressure meds in anticipation. This roller coaster getting very exciting...

[couta1]

Transferring more funds over into my ANZ securities call account today and then I'm off to the doctor and getting some stronger blood pressure meds in anticipation. This roller coaster getting very exciting... Take high potency garlic for your blood pressure and I'll send you a free bottle of sleep drops, there your all sorted without leaving your office.

[Balance]

Transferring more funds over into my ANZ securities call account today and then I'm off to the doctor and getting some stronger blood pressure meds in anticipation. This roller coaster getting very exciting...

Some big crossings were done on Friday including a line after market close at $2.46. I would say the big seller (s) have been taken out.

[Raz]

Just as well this lamb isn't thirsty for some milk...went looking for any recent insights and if I was a lamb looking for a feed I'd be bleating like there was no tomorrow :D
On the American airlines thing...this is by no means set in stone..I am looking for AIR to match and the other thing is I tried a variety of dates just flying to LAX in their summer, (renting a Mustang and driving to Las Vegas) and it was generally approx $400 dearer ($1600 to $1700 flying to LAX only) than flying to Las Vegas at $1,222, go figure ?
The other thing these are launch specials by AA to kick off their service which starts in June. Its easy to read too much into initial launch specials in terms of ongoing competition and effect on yields.
AA want to make a sustainable profit on this route just as much as AIR do.

The domestic lowest cost usually from LAX to Vegas is 60$ one way, so minimum extra cost 120$ to Vegas, lowest cost retail.

If you are flexible on dates then prices will be lower with competition however if seasonal or peak times they will compete less unless they are not meeting load factor benchmarks. I think Qantas is suffering as we went over for the school holidays on $1000 seats. Been along time since i have been on Qantas and never had that price for school holidays since the GFC. They have offered the same for the September holidays. Noted less Aussies in the tourist traps in great LA and the flights were far from full. Instead AIR matched for September so with AIR next time. Qantas service and product on our flights was inferior to AIR. The other items not picked up yet is AA is likely to offer a superior product with the 787 on the route however for $20 full internet access for the trip is a real entertainment factor point of different. AIR in time will need to act upon that aspect.

[couta1]

I see the Chinese are now taking to skiing like ducks to water and they are heading our way this winter(Some of the fields have hired Mandarin speaking hosts in readiness for this influx)coupled with the intro of night flights into Q/town, we should see some excellent monthly stats from Air this coming winter(The only downside is I will have to fight for more field space with the Auckland/Aussie and Chinese invasion) never mind you can't always have your cake and eat it to aye.

[Raz]

I see the Chinese are now taking to skiing like ducks to water and they are heading our way this winter(Some of the fields have hired Mandarin speaking hosts in readiness for this influx)coupled with the intro of night flights into Q/town, we should see some excellent monthly stats from Air this coming winter(The only downside is I will have to fight for more field space with the Auckland/Aussie and Chinese invasion) never mind you can't always have your cake and eat it to aye.

It is a pain though, limited capacity is a big problem..have to book way ahead...then fight through the crowds...

[Balance]

It is a pain though, limited capacity is a big problem..have to book way ahead...then fight through the crowds...

Nothing to be concerned about - the country is due for a major tourism infrastructure upgrade for years and with confidence, businesses will take up the challenge and upgrade and increase capacity to meet the demand. This is (and has always been) how tourism works in NZ.

[Beagle]

Double checked on AA website this morning. Launch special for their new service now gone since we're now in May and now charging $2,100 return to Las Vegas...same as AIR N.Z.
I think this highlights the fallacy of thinking you can make a judgement call on future yields just based off a competitors initial very limited time launch special.
As I said earlier this morning, you can be sure AA want this to be a sustainable and profitable route for them...no point flying a route that loses you money.

[Beagle]

Some big crossings were done on Friday including a line after market close at $2.46. I would say the big seller (s) have been taken out.

I'm following this weeks price movements like a hawk. Has consistently been weaker in the afternoon last week so that suggest selling emanating from offshore, probably Asia.
Not too worried if they want to whack it down further, $2.30 would be nice :D...massive opportunity for those confident in their own analysis of this fine company :)

[Raz]

Double checked on AA website this morning. Launch special for their new service now gone since we're now in May and now charging $2,100 return to Las Vegas...same as AIR N.Z.
I think this highlights the fallacy of thinking you can make a judgement call on future yields just based off a competitors initial very limited time launch special.
As I said earlier this morning, you can be sure AA want this to be a sustainable and profitable route for them...no point flying a route that loses you money.

It not just a launch special, its dynamic pricing. Qantas and AIR are at it continually..it hasn't mattered so much as Qantas did not have a comparable route/product.

ps also make sure they don't cookie you otherwise they know you plans from prior searches.

[777]

ps also make sure they don't cookie you otherwise they know you plans from prior searches.

ie. always do your final booking on another computer.

[Mickey]

From the NBR today:

The New Zealand dollar jumped 3.3% against the Australian dollar and 1.9% against the US dollar last week and is now up nearly 2.3% against the US dollar since the beginning of this year. So it’s unsurprising that the country’s flagship carrier, Air New Zealand, was the week’s biggest decliner after holding that unenviable position the previous week as well. Its shares fell 11.5% last week after dropping 7.3% the previous week.


Craigs Investment Partners’ head of wealth research, Mark Lister, says investors are wondering if it’s the end of the golden weather for the airline. “Air New Zealand’s had a bit of a rough period over the last few weeks,” he says. “The factors that have driven that fall have been rising oil prices, which is obviously a key input cost.” Brent crude oil rose 5.1% last week to $US47.37.


“A stronger currency is an interesting one because, on the one hand, a higher New Zealand dollar means Kiwis can travel more, but it does make it a little bit more expensive for offshore travellers to come here,” Mr Lister says. “The key thing, though, for Air New Zealand, is just nervousness about what we’re seeing in terms of passenger yields and some of those operating statistics that they release on a month-to-month basis,” he says. “People are getting a little bit cautious about whether all of those stars which have been in alignment for Air New Zealand over recent years are just starting to show a few cracks.”

[777]

They must have read sharetrader before writing their article.

[couta1]

They must have read sharetrader before writing their article. When you read the daily share report from NBR and the reasons they give for certain share price drops I think to myself c'mon guys you can do better than that. I reckon they have only got about 3 reasons and they do a daily draw from the hat to decide which one of those they will use for the day, so if they did some reading on here for a change that's a good thing.

[Leftfield]

Virgin Australia struggling...... interesting comment that Singapore Airlines may purchase AIR's stake.

http://www.bloomberg.com/news/articles/2016-05-02/virgin-australia-sees-lower-than-expected-profit-as-demand-falls

[OldGuy]

ie. always do your final booking on another computer.

or just use chrome's incognito mode

[Schrodinger]

or just use chrome's incognito mode

Apologies if this has been mentioned but who is going to fly the extra 700k Chinese to NZ over the next 2 years?

[stoploss]

Apologies if this has been mentioned but who is going to fly the extra 700k Chinese to NZ over the next 2 years?

It could be China Air , but AIA will do well whatever :) Also if they take any domestic flights AIR.NZ onto a winner ........

[Zaphod]

No, I pretty sure I'm not wrong about that. Yield, in airlines terms, is the average revenue per passenger per kilometre, before taking out any costs. Some random internet site tells me that it's a "Measure of average fare paid per mile, per passenger, calculated by dividing passenger revenue by revenue passenger miles (RPMs)"

Yes, you're correct.

I'd hasten to add that it's much more difficult to compare yield between markets (long haul, short haul, or specific sectors flown) or between airlines that it would appear at first glance, due to differences in stage length. That's where alternative measures such as PRASM come into play which incorporates load factor and stage length into the mix.

[Raz]

It could be China Air , but AIA will do well whatever :) Also if they take any domestic flights AIR.NZ onto a winner ........

Also where will they all stay unless you can get them here in the offseason...believe that number when I see it.

[Zaphod]

It not just a launch special, its dynamic pricing. Qantas and AIR are at it continually..it hasn't mattered so much as Qantas did not have a comparable route/product.

ps also make sure they don't cookie you otherwise they know you plans from prior searches.

Regarding the cookie issue, what are your concerns? That AirNZ are adjusting the final ticket prices based on your previous searches on theirs or a competitor's website?

[winner69]

Good story this one. Hasnt happened to me for years

http://www.stuff.co.nz/travel/news/79522269/the-a380-superjumbo-that-flew-almost-empty


How metrics work -

Yield on this fight not affected by the low passenger number
Capacity pretty ****ty

[skid]

Just as well this lamb isn't thirsty for some milk...went looking for any recent insights and if I was a lamb looking for a feed I'd be bleating like there was no tomorrow :D
On the American airlines thing...this is by no means set in stone..I am looking for AIR to match and the other thing is I tried a variety of dates just flying to LAX in their summer, (renting a Mustang and driving to Las Vegas) and it was generally approx $400 dearer ($1600 to $1700 flying to LAX only) than flying to Las Vegas at $1,222, go figure ?
The other thing these are launch specials by AA to kick off their service which starts in June. Its easy to read too much into initial launch specials in terms of ongoing competition and effect on yields.
AA want to make a sustainable profit on this route just as much as AIR do.

Roger ,Your a Hoot--Maybe Ill come too and we can do a ''fear and loathing in Vegas'' I believe that many things incl flights are subsidized by Vegas (anything to get them to the gambling tables!)

[skid]

When you read the daily share report from NBR and the reasons they give for certain share price drops I think to myself c'mon guys you can do better than that. I reckon they have only got about 3 reasons and they do a daily draw from the hat to decide which one of those they will use for the day, so if they did some reading on here for a change that's a good thing.

Do they talk about sheep Couts?

[skid]

Meanwhile is 100,000 shares big enough to be management?

[couta1]

Do they talk about sheep Couts? I wish they would, it would make their reasons more believable.

[sb9]

Looks like 250 level might be support for now..

[skid]

I wish they would, it would make their reasons more believable.

Those sheep did some running this morning!

[workingdad]

Meanwhile is 100,000 shares big enough to be management?

Yeah I saw that too after watching things closely today. Didn't impact on SP as much as I would have thought though so plenty of buyers around the 2.50 mark got mopped up when it was dropped.

Quite a few other packets dropped of some substance throughout the afternoon as well, I was going to do something additional with AIR today to negate some of the losses last week but a bit hesitant without seeing how it holds for a couple of days.

[couta1]

WD that 100K was an off market sale so had no effect on market, so didn't mop up any buyers:cool:

[BeeBop]

Wondering if I might get back in, sold close to $3....might buy again for the yield.

[Balance]

I think there's a far far too much volume in this sell off to attribute it to the sheeple, the flock cannot muster anywhere near enough shares (or cognisance) to account for the volume sold. This is big smart money aggressively taking profits, for whatever reasons, selling to the knife catchers, who one might argue are the sheeple.

BAA

Going back up on volume. So are the buyers 'smart money' or the sellers 'smart money' today?

[workingdad]

WD that 100K was an off market sale so had no effect on market, so didn't mop up any buyers:cool:

Looking again at it now, share price dropped 2c when it happened so coincidental I guess. I was watching it closely as it was dropping from holding around the 2.55 mark most of the morning to 2.50, I was looking at buying more and noticed the sudden change in volume between refreshing data and decided to sit back for a bit more so there was a change in SP at the time.

[skid]

Well...My ''gutometer'' says the worst is behind us. I could be wrong but with all my posts i guess i should be a participant.
Ive still got a bad feeling about the market in general,and Im not one to be a member of the ''high five club'',but this has been a relatively healthy correction so im in @151.5 (I only wish they would give a discount on air tickets:))

A relatively modest parcel by some of your standards

[777]

@151.5. Another edit coming up me thinks.

[skid]

@151.5. Another edit coming up me thinks.

Ha Ha your right 77.....I mean 777:)---Ill let it sit for awhile just to keep the others amused

Spose after buying I should have said 351.5

[Beagle]

Anyone notice that VAH announced a third quarter loss today and expectations of a profit for the year which at mid point of $45m implies a loss in Q4 too ?
Can't help wondering who knew late last week that VAH's shocking Q3 result and outlook announcement was coming...surely there's no leaks in the investment banking team at First N.Z assisting AIR with their disposal of the VAH stake ?
Looks to me like insiders were selling last week which paints a dim view of management selling doesn't it ! Maybe the market isn't quite so irrational after all. If VAH can't make money in the current low oil price environment then what's AIR's stake worth and is that 12 month short term loan they made even recoverable ?

Just as well with C.L.'s resignation from the board AIR don't have to consolidate VAH's financial's anymore. Very pleased AIR won't be supporting Ansett Mk2 anymore, opps sorry meant Virgin Australia :D

[winner69]

Just as well with C.L.'s resignation from the board AIR don't have to consolidate VAH's financial's anymore. (Roger)

Convenient eh and good timing ...hmmm

[Beagle]

Yes mate...expect truck loads, (should that be plane loads ?), more restructuring costs at VAH driving their full year statutory results deep into the red. Good AIR don't have to consolidate those results but might we see some write down in the value of their stake in VAH in their forthcoming accounts...that being an extraordinary item so doesn't affect underlying profit so again we're all good.
Not to worry though because Mr market is already saying that AIR shares in, and loan advanced to VAH, is close to worthless. Any clean extrication from this mess will no doubt be very warmly welcomed by the market.

[couta1]

Hey couts - talking of animals i wonder what the rats and mice shareholders are doing at the moment? Last time I made comments regarding rats and mice shareholders, I copped a one month ban so I'll stick to the Sheep Mate.

[winner69]

Last time I made comments regarding rats and mice shareholders, I copped a one month ban so I'll stick to the Sheep Mate.

Sorry mate

Should have said the small mum and dad retail investors like my neighbour Mike (and a lot of his mates down at the bowling club)

they are in a real tiz at the moment

They been sucked in with the hype that as term deposits aren't worth much they need to invest in high yield stocks.

He got a good divie out of HLG but lost 40 cents a share in the process when he cut his losses. mike and others then piled into AIR and but are really worried at the moment.

Silly buggers - my advice to them is if they don't understand what they doing stick to term deposits.

[winner69]

Anyone notice that VAH announced a third quarter loss today and expectations of a profit for the year which at mid point of $45m implies a loss in Q4 too ? (Roger)

Poor Virgin

Underlying profit - Q1 8m profit Q2 $73m profit Q3 19m loss and Q4 likely 33m loss

Seems to be going the wrong way

[Beagle]

Anyone notice that VAH announced a third quarter loss today and expectations of a profit for the year which at mid point of $45m implies a loss in Q4 too ? (Roger)

Poor Virgin

Underlying profit - Q1 8m profit Q2 $73m profit Q3 19m loss and Q4 likely 33m loss

Seems to be going the wrong way

The way VAH are retrenching ATR aircraft leases gives an insight into just how bad some parts of Australia have been hit by the mining downturn. The shocking statutory loss this third quarter includes restructuring costs extricating themselves from surplus leases. Reported loss $18.6m statutory loss $58.8m. Just as well the dairy downturn doesn't seem to be affecting AIR at all eh and just as well AIR doesn't have to consolidate its share of that loss anymore given C.L.'s board resignation. FAR more robust picture of domestic demand in N.Z. thank goodness.
AIR's management have absolutely made the right call to review their stake in Virgin. Borgatti must go and by resigning accept the ultimate responsibility for mismanagement of VAH. C.L. is bang on the money with his call for him to fall on his sword IMO.

[Baa_Baa]

WD that 100K was an off market sale so had no effect on market, so didn't mop up any buyers:cool:

Who bought them then, if they weren't a buyer?

[Baa_Baa]

Going back up on volume. So are the buyers 'smart money' or the sellers 'smart money' today?

What do you think Balance? Smart buyers or smart sellers? Unusual not to have a viewpoint.

[Baa_Baa]

Anyone notice that VAH announced a third quarter loss today and expectations of a profit for the year which at mid point of $45m implies a loss in Q4 too ?
Can't help wondering who knew late last week that VAH's shocking Q3 result and outlook announcement was coming...surely there's no leaks in the investment banking team at First N.Z assisting AIR with their disposal of the VAH stake ?
Looks to me like insiders were selling last week which paints a dim view of management selling doesn't it ! Maybe the market isn't quite so irrational after all. If VAH can't make money in the current low oil price environment then what's AIR's stake worth and is that 12 month short term loan they made even recoverable ?

Just as well with C.L.'s resignation from the board AIR don't have to consolidate VAH's financial's anymore. Very pleased AIR won't be supporting Ansett Mk2 anymore, opps sorry meant Virgin Australia :D

As the clouds gather and the winter of VAH sets in, what is the poosibility AIR can't find a buyer and get stuck with this piglet for the long term? Like a drogue slowing the dreamliner.

[Baa_Baa]

Yes mate...expect truck loads, (should that be plane loads ?), more restructuring costs at VAH driving their full year statutory results deep into the red. Good AIR don't have to consolidate those results but might we see some write down in the value of their stake in VAH in their forthcoming accounts...that being an extraordinary item so doesn't affect underlying profit so again we're all good.
Not to worry though because Mr market is already saying that AIR shares in, and loan advanced to VAH, is close to worthless. Any clean extrication from this mess will no doubt be very warmly welcomed by the market.

This assumes AIR want to sell it and that there is a buyer who actually buys it. No evidence that points strongly to either of those scenarios, only speculation here.

[Balance]

What do you think Balance? Smart buyers or smart sellers? Unusual not to have a viewpoint.

Sellers today are the smart ones as they bought off those who were 'smart' to sell down to $2.45 last week?

Air NZ has been a lovely trading stock and imo, will continue to be for a while yet.

[couta1]

Who bought them then, if they weren't a buyer? Come on Baa Baa your slipping up, I clarified to WD that the sale didn't mop up any on market buyers as he thought it had, you must read the prior posts properly.

[Baa_Baa]

Come on Baa Baa your slipping up, I clarified to WD that the sale didn't mop up any on market buyers as he thought it had, you must read the prior posts properly.

Oh, 'on market buyers', good you clarified else the off market sellers or buyers might be sheeple eh? Lol. Got to have a sense of humour when your pet company gets gutted in the market for no apparent reason. Well, none I can see anyway, but it has been. Hopefully tomorrow confirms the daily bottom/low is in, then it's happy times again.

[couta1]

Sellers today are the smart ones as they bought off those who were 'smart' to sell down to $2.45 last week?

Air NZ has been a lovely trading stock and imo, will continue to be for a while yet. I'm sure today's buyers will be feeling pretty smart when the price hits $3 again.

[dobby41]

I'm sure today's buyers will be feeling pretty smart when the price hits $3 again.

Could be a while.
Meanwhile maybe they have better uses for their money?

[winner69]

What are these 'off market' sales anyway?

[OldGuy]

Thoughts???

https://www.nzx.com/files/attachments/234648.pdf

[workingdad]

Interesting reading

https://www.nzx.com/files/attachments/234648.pdf

• From 30 March 2016, our investment in Virgin Australia will be recognised as an investment in quoted equity instruments
– Fair value movements will be recorded in the profit and loss


New Zealand overseas visitor growth vs Air New Zealand international ASK growth was an interesting chart, AIR has excelled in ASK growth substantially more than the NZ visiter growth. Must be a lot of NZers traveling as well to quantify this.

[couta1]

Thoughts???

https://www.nzx.com/files/attachments/234648.pdf Well positioned comes to mind,certainly no reason for the recent price drop in this presentation.

[OldGuy]

Couldn't resist and bought another 30k yesterday at $2.52, bringing me to a total of 80k at an average price of $2.60. Keen to see where this gets in the next 2 or 3 years!

[workingdad]

Couldn't resist and bought another 30k yesterday at $2.52, bringing me to a total of 80k at an average price of $2.60. Keen to see where this gets in the next 2 or 3 years!

I'm interested in seeing where it goes in the next couple of days :eek2: