AIR - Air NZ.

[OldGuy]

Agreed re the endless regurgitation of that insolvency quote.

[biker]

Buying AIR today at 2.31 and VAH @ .28

[sb9]

230 is the key support by the looks, if that breaches expect further weakness.

[Beagle]

If the price is anywhere near this level when my IFT goes ex divvy, I'll be buying a whole lot more. PS-Ive always thought that saying about the market staying irrational longer than you can stay solvent a bit silly for those prepared to hold a stock for the long term and don't need to use the money elsewhere.


Agreed re the endless regurgitation of that insolvency quote.

Totally agree and bordering on inappropriate gloating by one or two who recently sold. Hardly any of us have borrowed to buy our shares so the question of solvency is completely irrelevant.

[Tony Two Gloves]

Thought i caught the falling knife on Friday at $2.36 - guess not - Bugger!

[blockhead]

Thought I did orright less than a week ago @ 2.58....and, in case anyone is worried, the fallback won't cause insolvency !

[see weed]

Don't worry. Did the same 3 or 4 years ago and kept on buying from $1.13c right down to about .87c, then it took off back up to over $1.80, it will go back up and all will be happy. Nearly bought some today but thought might wait.

[skid]

Skid, calling 'weak holders' that sell 'smart non holders ' is a paradox IMO. It's the weak holders that cause the share price to continue to drop by lining up to sell at lower and lower prices.(It would be interesting to see what percentage of these sellers are making any profit, I would hazard a guess that the majority are losing) so not really that smart when it comes to a blue chip, divvy paying stock like Air. PS-Ive been one of those smart non holders before that wasn't so smart after all, when selling other stocks.

its an ''either or situation'' depending on the SP---My main point is that we just (imo) cant label any buyers or sellers at this stage--Those weak holders may actually be ''brave (and smart)sellers'' if they buy back X more shares with the same dosh if it hits $2(on the way back up from less than that if your a chartist)---or they may be the weak(not so smart)if it rockets.
I suppose the real paradox may be between the fact that as it goes down one would think the odds increase that its getting closer to the bottom,but at the same time the odds (as you say)increase of holders selling into any rise,which makes it hard to get ''legs''
I dont think anyone would deny that the tide is going one way atm,but eventually it must turn--what stops the momentum?
My guess(and of course its just a guess)is that at this stage it will take some news like VAH or something.
At this stage -those who sold @around $3 and are just waiting for a confirmed turn are the real smart ones (thats not me--(I did the same as you,only at a cheaper price and still lost)

PS-From hoop on the TA thread

Chartwise.. the bull/bear line shows where feelings may reverse....If the price bounces off upwards the Stock stays in a Bull Market cycle (higher highs/higher lows) a bull market correction has played out and a bottom is set in place...
If the price falls below the bull bear line it means the bull market cycle may be over ..if the price falls to the next support $2.25 (an old support 2yrs) and bounces up (respects) this may not be a bottom as AIR could be in bear market cycle (lower highs/lower lows) and that support respect maybe temporary

You can see the whole thing on the thread (theres alot of valuable stuff) For reference 2.35 is the point he is referring to (bull-bear line)

[skid]

Just stumbled across this---maybe we have been missing the bigger picture

http://money.cnn.com/video/news/2016/05/05/why-airline-profits-are-good-for-everyone.cnnmoney/index.html?iid=V_Top

[babymonster]

I just got told that air has hired more than 100 customers service staff recently

[Vaygor1]

Hi Roger.

Remember this post?

http://www.sharetrader.co.nz/showthread.php?10514-Auckland-Meeting-Brunch-in-the-Sky-!-Sunday-6-March-11-30-Orbit-Restaurant&p=610830&viewfull=1#post610830

My prediction about scuba diving one of my better ones don't you think?

Anyway I thought a 2-monthly update might be in order regarding our wager on Saturday 6th March on which company's SP would gain the most percentage-wise over the next 6 months.

Vaygor1
RYM close 4th March $8.19
RYM close today $9.10
Up 11.1%

Roger
AIR close 4th March $2.74
AIR close today $2.30
Down 16%

So T1 bragging rights to me :D(T1 = 1st Third.... a welcome change from the old H1 and Q1).
Assuming RYM freezes at $9.10, AIR SP required to get to +11.1% = $3.04

When's the next ST meeting up our ways?
Put some thought into a double-or-quits option on close of trading 6th Sept which ever way it might end up.. hopefully a draw with both of us in the black. :t_up:

[Beagle]

Ouch putting down 16% in red...that hurt like a dagger through my heart LOL. Gotta keep smiling...I feel a big opportunity developing here once the price stops falling. Yeah I remember mate and congrats on T1 result.. more than happy to honour the bet if it works out for you, just as well we didn't bet our private jets on it eh :) I reckon we should have another meeting in early spring, right after all the annual results are out so there's plenty of interesting talking points. Hopefully by then AIR will have sold VAH, SP recovered and a special dividend so I can afford the beer. Must admit a draw sounds much better though :D

[babymonster]

forsyth barr has a new client only report. Anyone has it?

[Fox]

See tj's post a few days ago:

http://www.sharetrader.co.nz/showthread.php?1088-AIR-NZ&p=618666&viewfull=1#post618666

[Snow Leopard]

I just got told that air has hired more than 100 customers service staff recently

They have this to deal with:


I sent this communication to investor@airnz.co.nz this evening, (acknowledge this is probably not my best work because I am tired and its a Sunday night but I have given it my best shot) and would encourage you to add your thoughts in support to the same e.mail address so hopefully we can effect a positive change.



I still have the upmost respect for the board so hopefully this is a catalyst for positive change. If not maybe another New Zealand Shareholder association tandem effort is required.

Please folks, if you want change and a more level playing field, PLEASE make the effort to add a few words. Even a simple e.mail to the e.mail address noted above saying you support Roger's recent communication might be what it takes to make a positive difference.

Best Wishes
Paper Tiger

[Snow Leopard]

...My normalised Capex should be equivalent to normalised depreciation when calculating profit. I have chosen not to normalise interest charges. I'll accept we may have low interest rates for longer.


The table below normalises NPAT using the average EBITDA margin of 16% and depreciation of $675m as calculated above. This is much higher than the analyst forecast of just $420m in FY16....

You have been caught out by AIR going on a multi-year spending spree and dragging the fleet from over-aged to under-aged.

A Depreciation charge for FY2016 of $420m is reasonable.

The stay-in-business CAPEX to maintain the fleet at the same age and size is likely to be around $500m (because new planes are more expensive than the ones you bought a few years ago).

So a bonus issue is that you have a $80m profit on which tax needs to be paid.

But in addition there are Rental & Lease payments of, say, $190m which need to be paid.

So the total 'cost' of just standing still is around $690 + some tax.

[Op Earnings - Rental& Lease = EBITDA]

Best Wishes
Paper Tiger

[percy]

You have been caught out by AIR going on a multi-year spending spree and dragging the fleet from over-aged to under-aged.

A Depreciation charge for FY2016 of $420m is reasonable.

The stay-in-business CAPEX to maintain the fleet at the same age and size is likely to be around $500m (because new planes are more expensive than the ones you bought a few years ago).

So a bonus issue is that you have a $80m profit on which tax needs to be paid.

But in addition there are Rental & Lease payments of, say, $190m which need to be paid.

So the total 'cost' of just standing still is around $690 + some tax.

[Op Earnings - Rental& Lease = EBITDA]

Best Wishes
Paper Tiger

$690mil + some tax is a lot to spend a year to just stand still.!!
An awful lot.!!
Big CAPEX every year.

[janner]

Flew two weeks ago on Air Asia. ( Well you do have to try new things )..

Auck. - Kl. it was full. the service received was what was paid for.. Cheap.

Flew today HK. - Dubai. Emirates.. Service excellent. The aircraft was a dubious 1/3 full..

Competition is definitely going to hurt ....

[couta1]

$690mil + some tax is a lot to spend a year to just stand still.!!
An awful lot.!!
Big CAPEX every year. Big spending is the name of the game in this industry if you want the youngest most efficient fleet around.

[percy]

Big spending is the name of the game in this industry if you want the youngest most efficient fleet around.

Exactly.
And that is "the nature of the beast".
Problem is it will always be the case.
Bit different from your experience in the retirement village sector?

[Beagle]

Exactly.
And that is "the nature of the beast".
Problem is it will always be the case.
Bit different from your experience in the retirement village sector?

No it won't Percy. Capex is circa only $175m in FY20 and that only moves the average fleet age from a record low of 6.2 years to only 6.9 years, still a full three years younger than the average worldwide fleet age according to IATA which is 9.9 years old.

Surely you and some other naysayers can understand that AIR are in the middle of a major fleet expansion and renewal programme. (please read the presentation that accompanied the investor day presentation so you have a basic grip on the facts). https://nzx.com/companies/AIR/announcements/281646

But I tell you what seeing as some appear struggle with this let me make it simple.

AIR could spend nothing on capex for FY21, FY22, FY23 and their average fleet age would still be less than the average aircraft age according to official IATA data and still running a far bigger fleet than what they were ten years ago, that would be fourteen years ago by 2024.

"There is tremendous potential for free cash flow generation later this decade" Quote Rob McDonald CFO at the analysts briefing that accompanies February 2016 half year profit announcement.

People who are fixated with excess capex really don't even appear to have the most basic understanding about the airline.

[Beagle]

Big spending is the name of the game in this industry if you want the youngest most efficient fleet around.

Some people don't understand that AIR are setting up the business to be sustainable when $100 oil comes along. Those same people don't seem to understand that AIR are presently growing at the fastest rate in over 75 years...you'd think those people would understand you have to invest capex for business growth wouldn't you...go figure :rolleyes:

[skid]

Flew two weeks ago on Air Asia. ( Well you do have to try new things )..

Auck. - Kl. it was full. the service received was what was paid for.. Cheap.

Flew today HK. - Dubai. Emirates.. Service excellent. The aircraft was a dubious 1/3 full..

Competition is definitely going to hurt ....

Other than ''user pays on food'' was Air Asia bearable?

Its obviously just one case but if its a reflection of things generally it sounds like people are going for economy.

Ive noticed some cheap prices with AIR--I personally think they are going to have to do some serious ''meeting the market''.
Cheaper prices will affect the balance sheet,but filling planes is still the best option(If thats what it takes)--Its a new game now and the trick will be whether management adapts. Im sure they have the computer program that determines ticket price according to how much of the plane is booked-but they may have to ratchet it down,if they start getting higher vacancy--especially on long haul

Even in rental accommodation there are similarities--2-3 weeks of vacancy can quickly eat up any profits from looking for higher rents.

[Zaphod]

Air Asia X certainly fits the low cost carrier (LCC) category and even some of our young cost-conscious staff have vowed to avoid flying with them again. Having said that, there's always a segment of the market that will choose their carrier purely on cost who IMO, are well catered for by the myriad of LCC's in the marketplace today. At this point I can't see Air NZ choosing to cater for this market outside of the existing seats-to-suit product, but if they do it would represent a race to the bottom.

[Baa_Baa]

Technically yesterday's $2.30 close is really ugly, a triple bottom break-down on top on a 4-year rising support trend line break-down (log and arithmetic scales), both previous supports now resistance. The bat spread it's wings and the head and shoulders break-down is firmly in play.

p.s. Winner asked about the OBV (On Balance Volume), some sort of 'smart money' indicator (not sure about that ..) ... but it's plunging off the cliff as well.

[Beagle]

http://www.nbr.co.nz/article/qatar-airways-delays-launch-doha-auckland-service-ng-188788

Qatar delay's launch.

[OldGuy]

wow, some of the financial "analysis" on these boards makes my head hurt...

[skid]

http://www.nbr.co.nz/article/qatar-airways-delays-launch-doha-auckland-service-ng-188788

Qatar delay's launch.

I still think 18hrs in the air is pushing it,unless maybe they install a gym

[Beagle]

I still think 18hrs in the air is pushing it,unless maybe they install a gym
I just hope they've done their fuel burn calculations right and don't encounter headwinds :eek2:

[winner69]

In the words of Mark Knopfler

Why worry
There should be laughter after pain
There should be sunshine after rain
There should be a rise in AIR shares again
These things have always been the same
So why worry now
Why worry now

[winner69]

wow, some of the financial "analysis" on these boards makes my head hurt...

Mine too - panadol please

[noodles]

I just hope they've done their fuel burn calculations right and don't encounter headwinds :eek2:
Better hope it is not a Candian pilot
"The amount of fuel that had been loaded was miscalculated because of a confusion as to the calculation of the weight of fuel using the metric system (https://en.wikipedia.org/wiki/Metric_system), which had recently replaced the imperial system (https://en.wikipedia.org/wiki/Imperial_system) for use with the 767."

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

[skid]

Better hope it is not a Candian pilot
"The amount of fuel that had been loaded was miscalculated because of a confusion as to the calculation of the weight of fuel using the metric system (https://en.wikipedia.org/wiki/Metric_system), which had recently replaced the imperial system (https://en.wikipedia.org/wiki/Imperial_system) for use with the 767."

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

I like this sentence describing the landing without power (therefore making no noise to warn people on the ground

Captain Pearson would later remark that the boys were so close that he could see the looks of sheer terror on their faces as they realized that a commercial airliner was bearing down on them.

I believe,that although it was probably the stupidest mistake ,getting them in to that situation--It was said to be one of the all time great landings of a commercial airline in trouble.

[couta1]

Weak holders up nice and early this morning, they probably read that non newsworthy article in the herald this morning about a fare not being honoured and had a wee panic, herald staff probably having a good buy up at the moment:cool:

[Beagle]

Better hope it is not a Candian pilot
"The amount of fuel that had been loaded was miscalculated because of a confusion as to the calculation of the weight of fuel using the metric system (https://en.wikipedia.org/wiki/Metric_system), which had recently replaced the imperial system (https://en.wikipedia.org/wiki/Imperial_system) for use with the 767."

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

On a brief read that looks like a pretty good script for a movie.

[noodles]

On a brief read that looks like a pretty good script for a movie. I need some Panadol too.
I first heard about it in a comedy sketch by a Canadian comedian.

[see weed]

Are we there yet? ...$2.285c

[Raz]

Are we there yet? ...$2.285c

looks like plenty of time before buying back in.

[couta1]

In the words of Mark Knopfler

Why worry
There should be laughter after pain
There should be sunshine after rain
There should be a rise in AIR shares again
These things have always been the same
So why worry now
Why worry now Indeed winner, this current situation is a Chorus mark2, the successful sale of Virgin is like when Chorus holders were waiting for the ComCom to rule on the copper price(Hopefully not that level of incompetence here) Chorus went to $1.30 and is now a steady $4 in a two and a half year timeframe, we will look back on this period in the same light in a shorter timeframe. PS-When I say successful sale of Virgin, I mean just getting rid of the mutt not at a premium price although that would be ideal.

[BIRMANBOY]

Yes a healthy reminder that even good financial analysis is always going to appear be trampled when the market is in rampant stampede mode either up or down. Traders who rely predominantly on financial analysis will be adjusting methodologies one might think. Eventually stampedes peter out in most cases but Teflon underpants are recommended for those of tender disposition. Not holding but getting interested.
wow, some of the financial "analysis" on these boards makes my head hurt...

[OldGuy]

That's not really the problem I was alluding to, Birmanboy. The issue is that a lot of the financial analysis and comments made on these boards is divorced from reality. For example, including capex in profit calculations, not understanding how depreciation effects P&L, not understanding the difference between NPAT and underlying earnings, etc etc etc.

Its quite scary to see people post this stuff and for others to potentially make significant financial decisions on the basis of it. Tagging DYOR doesn't really stop people relying on the information provided, consciously or otherwise...

[Beagle]

Perhaps its time for a reminder that the consensus analyst fair value is $2.82...these are highly paid professionals who value companies for a very good living.

[IAK]

Rod Oram's take on Air New Zealand on this mornings Nine to Noon business programme (9.08 mins into the podcast). Air NZ facing increased competition but strategically sound.

http://www.radionz.co.nz/national/programmes/ninetonoon/audio/201800127/business-commentator-rod-oram

[Tony Two Gloves]

Good news, the bottom has been found and now its up, up and away! (fingers and everything else crossed as I am now 0.5 of a cent in profit excl brokerage lol)

[OldGuy]

I can see why this stock has such a high beta - its all over the show!

[skid]

So we are back(almost) to that important 2.35 again------300.000 shares in one go (will we see a management notice tomorrow)--if so ,Geeze,how many do they have?

[noodles]

Noodles - Firstly let me say I normally have the upmost respect for your analysis but I am sorry but in my opinion in this particular instance your figures are fundamentally flawed in a number of ways.

First things first I recommend you should revisit the investor day briefing for an accurate guide to scheduled capex for the next 3 years, the data on 4 traders is woefully inaccurate and at a material divergence to the companies own information provided last Tuesday in their investor day material. I know because I looked into this matter on Friday and noted some major discrepancies.

Secondly if you look at the graph of scheduled committed capex as shown in the investor day presentation you'll realise that AIR is half way through a complete modernisation of its fleet that incorporates significant fleet expansion and by FY19 will have an extremely young average fleet age of only 6.2 years that will be materially expanded from its present capabilities.

My contention is that normalising earnings based on depreciation being normalised because AIR are both significantly expanding and dramatically modernising its entire fleet is a grossly misleading methodology to analyse normalised earnings so I am sorry Noodles but in this case I believe you analysis is fundamentally flawed and without merit.

I note AIR have a policy or writing off their aircraft over their useful life and from time to time when necessary make such revaluations either up or down as considered necessary to ensure their balance sheet values of fixed assets and aircraft show a true and fair view. I have no qualms whatsoever about AIR's depreciation as disclosed in their financial statements and accept it has historically been an accurate guide to the actual utilisation rate of its capital equipment and thus I contend any attempt to normalise earnings on the basis that current and expected depreciation is not a fair representation of asset utilisation is wholly inappropriate. Trust me on this, the accountant in me has been all over this issue like a hawk looking for a feed and there isn't any problem here.

Put more succinctly, if you spoke with AIR management and got the data from them I am 100% confident you would find that if you normalised capex over the years taking out the capex costs of the dramatic fleet expansion and modernisation I am sure you would find that normalised capex was accurately reflected by normal depreciation. If anything normalised capex could be slightly less than depreciation as AIR write their fleet off over 18 years normally but we have a bunch of 21 year old 767-300's still flying well and earning AIR good money that will have extremely low or no remaining book value.

Surely people can understand that when you both substantially modernise and grow your fleet this requires billions of dollars of additional capex. If it were not so AIR would not be presently growing at its fastest pace in its 76 year history while contemporaneous aiming for one of the youngest and most fuel efficient fleets in the world. The PE of 4.2 stands as far as I am concerned...just waiting for the bottom...quite when that is...is the $64,000 question.
Ok, I accept my method of depreciation is flawed. After checking the total assets and depreciation and rate on the plans in the annual report, I think the analysts probably have it right. So depreciation will be $450m this year and tick up is over $500m in 2018. Assuming the new growth initiatives stop and capex falls (as suggested by the presentation), we should see depreciation fall off as well.
Whichever way you look at it, $675m depreciation is too high.

But not wanting to ignore the ebitda margin normalisation aspect of the analysis, I have plugged in a average depreciation of $450m to see what this does to my spreadsheet

For at 16% EBITDA margin


Year
Revenue
Actual EBITDA
Normalised EBITDA
Normalised EBIT
Interest
NPBT
NPAT
eps
EV/EBITDA
EV/EBIT
PE


2018
5818
1157
937
487
87.0
399.8
287.9
0.256
4.0
7.8
9.2


2017
5565
1293
896
446
41.0
405.1
291.7
0.260
4.2
8.5
9.1


2016
5336
1361
859
409
62.0
347.2
250.0
0.223
4.4
9.2
10.6



And then at 19%


Year
Revenue
Actual EBITDA
Normalised EBITDA
Normalised EBIT
Interest
NPBT
NPAT
eps
EV/EBITDA
EV/EBIT
PE


2018
5818
1157
1105
655
87.0
568.4
409.3
0.364
3.4
5.8
6.5


2017
5565
1293
1057
607
41.0
566.4
407.8
0.363
3.6
6.2
6.5


2016
5336
1361
1014
564
62.0
501.8
361.3
0.322
3.7
6.7
7.3




And just for completion Fy16 forecast EBITDA margin of 25.5%



Year
Revenue
Actual EBITDA
Normalised EBITDA
Normalised EBIT
Interest
NPBT
NPAT
eps
EV/EBITDA
EV/EBIT
PE


2018
5818
1157
1484
1034
87.0
946.6
681.5
0.607
2.5
3.7
3.9


2017
5565
1293
1419
969
41.0
928.1
668.2
0.595
2.7
3.9
4.0


2016
5336
1361
1361
911
62.0
848.7
611.0
0.544
2.8
4.1
4.3



So can the discussion now move onto what a sustainable EBITDA margin is? Can we expect 20%+ EBITDA margins going forward. Alternatively, should we expect a contraction back to 9% that was experienced post GFC?

[Baa_Baa]

So we are back(almost) to that important 2.35 again------300.000 shares in one go (will we see a management notice tomorrow)--if so ,Geeze,how many do they have?

The close at 5:02pm was shaping up to be $2.326 with 61k through, then that 300k parcel trumped it at 5:09pm $2.358 a smidge above the resistance! (stockness data). Nevertheless all day it recovered from the Monday close and since 2:30pm it traded above resistance so there sure is a bull/bear battle going on right around where the TA's would expect to be. Bulls will interpret as a price bottom forming for the up-leg, bears will interpret it's a backtest on the way to next level support. Fascinating.

[babymonster]

a bit hard to say what will happen tomorrow. Still in oversold territory.

[trader_jackson]

Not sure if its already been posted, but the holders etc might be interested:

http://www.afr.com/street-talk/cathay-swoops-on-virgin-sales-process-20160509-goplu2

Bit of talk on the street (or should I say the runway? ;))
Link gives the gist of it away, remember to do the old stop refreshing/loading trick...

"some think Air New Zealand's timetable for receiving $300 million or more from the sale of the Virgin stake might be overly ambitious now that the federal government has gone into caretaker mode. Many of the deal permutations would need the approval of the Foreign Investment Review Board and the Federal Treasurer, whether that is Scott Morrison or Labor's Chris Bowen."
- Remember guys, its election time in aussie as well...

[Beagle]

Not sure if its already been posted, but the holders etc might be interested:

http://www.afr.com/street-talk/cathay-swoops-on-virgin-sales-process-20160509-goplu2

Bit of talk on the street (or should I say the runway? ;))
Link gives the gist of it away, remember to do the old stop refreshing/loading trick...

"some think Air New Zealand's timetable for receiving $300 million or more from the sale of the Virgin stake might be overly ambitious now that the federal government has gone into caretaker mode. Many of the deal permutations would need the approval of the Foreign Investment Review Board and the Federal Treasurer, whether that is Scott Morrison or Labor's Chris Bowen."
- Remember guys, its election time in aussie as well...

Fascinating, thanks for posting. Maybe this Virgin stake is worth something after all ?

Noodles. Starting point for EBITDA margin has to be the ten year average in your original analysis 16.1. When then need to consider that this includes several years of the GFC which is arguably the most serious financial crisis since the great depression. We also need to consider going forward that AIR will have a very very young and fuel efficient fleet, for example the new Dreamliners require no heavy maintenance for the first 9 years. I would think if we took out the effect of one year of the GFC on the basis that the length and depth of the GFC was so severe its very unlikely to repeat going forward, some would actually say the current operations are still affected by the GFC, low world growth e.t.c., (travel is very cheap now in real terms) I would suggest taking out the 9.8 EDITDA of 2011 and replace with another 19.9 for FY19 the ten year average becomes 17.1%. Add another 1-2% because AIR will have one of the youngest most fuel efficient fleets in the world by FY19 and I think an average EDITDA of 18-19% is a reasonable assumption going forward.

Ten year average PE is 11 and we have interest rates at 60 year lows so maybe a slightly higher PE is currently warranted based on normalised earnings at normalised EDITDA margins.

Interested to hear your updated thoughts on CVT if you have the time in that thread mate.

All the talk by some people about how the world is changing to budget carriers...honestly I think you can discount all that as simply people speaking their own book in terms of how they fly.
As I've said before, there is no actual data to back up such spurious claims. Actual operating statistics show loads YTD are at close to record level's and yields are holding up extremely well considering how dirt cheap jet fuel is. By now most people who fly from time to time have had truly horrible experiences on sardine can budget carriers and most people have worked out you get what you pay for.

[babymonster]

Anyway, more buyers will be good. And they are all cash up buyers too. Hopefully air can get a better price.

[Raz]

Anyway, more buyers will be good. And they are all cash up buyers too. Hopefully air can get a better price.


The Cathay potential interest has been around for a long time, the share price was 2.88 and on its way up when this hit the rumour mill. That was the the last reason i bought in and then sold at 3.02 $ when I went on holiday....believe it was the reason for the up swing between brokers comments on this...

[couta1]

Buy side strengthening now.

[blockhead]

Buy side strengthening now.

Would you be game to back up the truck and do a bit of averaging down though ??

[vin]

^ That's what I've been contemplating!

[couta1]

Would you be game to back up the truck and do a bit of averaging down though ?? Definately,see my comment on post # 6260, would need to double down though to get some real benefit due to the number I'm holding.

[stoploss]

Would you be game to back up the truck and do a bit of averaging down though ??

I broke all the rules and did that last week ...lucky KW isn't around to tell me off ....

[Beagle]

I broke all the rules and did that last week ...lucky KW isn't around to tell me off ....

She'd give you a damm good roasting mate especially if she did it in person. You be careful Couta1 you are already holding truckloads, don't do anything too rash, you hear me !

[couta1]

She'd give you a damm good roasting mate especially if she did it in person. You be careful Couta1 you are already holding truckloads, don't do anything too rash, you hear me ! I'm hearing ya, wouldn't mind getting my average down into the $2.50 ies though, I'm confident in the way Air are positioning themselves in the market even with the increased competition.

[777]

From stuff

http://www.stuff.co.nz/travel/news/79858762/air-new-zealand-to-introduce-7879-dreamliner-on-buenos-aires-route

[Balance]

Double down = dumbing down imo.

Double up on the way - you are then investing in more and more of a good thing.

Rule does not apply to traders.

[Robomo]

From stuff

http://www.stuff.co.nz/travel/news/79858762/air-new-zealand-to-introduce-7879-dreamliner-on-buenos-aires-route

Using the 787 with its 20% lower cost per seat/km and similar capacity to the 777 will improve profitability. AIR will be pleased with the new Buenos Aires and Houston routes with both being profitable from the start and rapidly having to increase services to keep up with demand.

Whats the bet that the 777-200 services to Houston will soon be upgraded to the 777-300 if the AKL-LAX competition starts to bite into AIRs capacity?

[Beagle]

Using the 787 with its 20% lower cost per seat/km and similar capacity to the 777 will improve profitability. AIR will be pleased with the new Buenos Aires and Houston routes with both being profitable from the start and rapidly having to increase services to keep up with demand.

Whats the bet that the 777-200 services to Houston will soon be upgraded to the 777-300 if the AKL-LAX competition starts to bite into AIRs capacity?

Pretty sure they were talking about that the other day mate. As you suggest, there's a pretty useful handle they can pull in terms of tweaking of capacity with the lower seat count in a 777-200 312 pax v 332 pax in a 777-300.

Good move putting one of the new Dreamliners on the Bounes Aires route because LAN (or whatever they will be called when that merger goes through) are using a 787 on their service..besides that we need to keep Iceman in the luxury and comfort of which he is well deserving on his regular trips over there.

[RTFQ]

Using the 787 with its 20% lower cost per seat/km and similar capacity to the 777 will improve profitability. AIR will be pleased with the new Buenos Aires and Houston routes with both being profitable from the start and rapidly having to increase services to keep up with demand.

Whats the bet that the 777-200 services to Houston will soon be upgraded to the 777-300 if the AKL-LAX competition starts to bite into AIRs capacity?

The 772 if full with its extra premium seats, the revenue more than offsets the 787 fuel saving. Plus the 787 is a dog longhaul with freight. 773 hasn't got the range to operate Houston Auckland in a descent headwind, full, I'm told. This reschedule is probably more about utilizing the 772 capacity into a growing market, probably Asia. The PR spin is all about the 787.
Not sure the 787 has the required EDTO cert yet for direct EZE, this is why LANCHILE have to fly the curve to NZ, an hour longer than AIR

[Beagle]

^^ Maybe they reconfigure the seating mix for one or two of the new 787's due this year.

Fascinating battle between the bulls and bears. Long term support at $2.35 holding at this stage on massive volume. Technically not looking quite as grim as it was.

[Balance]

^^ Maybe they reconfigure the seating mix for one or two of the new 787's due this year.

Fascinating battle between the bulls and bears. Long term support at $2.35 holding at this stage on massive volume. Technically not looking quite as grim as it was.

I suspect Forsyth Barr client portfolio service is still selling - they probably obtained a big allocation when the government sold down at $1.65 (?) and there's still plenty of profits/gains for clients to book. A change in their recommendation usually triggers such wholesale sell down and/or de-weighting of portfolio.

[Beagle]

I suspect Forsyth Barr client portfolio service is still selling - they probably obtained a big allocation when the government sold down at $1.65 (?) and there's still plenty of profits/gains for clients to book. A change in their recommendation usually triggers such wholesale sell down and/or de-weighting of portfolio.

Appreciate your comment mate. From 4 traders, presently only four analysts providing coverage, (maybe First N.Z.'s coverage presently suspended seeing as they're appointed to act in the VAH sale process), consensus view, all on hold and consensus valuation $2.80, same as Forbarr's assessment. Why would they be selling in the 230's if the house view is its worth $2.80 ? Maybe they were heavily overweight before ? Guess I just answered my own question...

[Balance]

Appreciate your comment mate. From 4 traders, presently only four analysts providing coverage, (maybe First N.Z.'s coverage presently suspended seeing as they're appointed to act in the VAH sale process), consensus view, all on hold and consensus valuation $2.80, same as Forbarr's assessment. Why would they be selling in the 230's if the house view is its worth $2.80 ? Maybe they were heavily overweight before ? Guess I just answered my own question...

When the button is pushed on a portfolio change with broking firms, they go for broke - plenty of brokerage to be made by the house brokers.

[777]

Another from Stuff

http://www.stuff.co.nz/business/industries/79861781/air-new-zealand-faced-up-to-12-billion-in-damages-in-cargo-cartel-case

[Kelvin]

The 777 will go into daily Tokyo flights from 30 October while Shanghai gets 3 extra 787 services a week from 17 December

[B747-419]

Another from Stuff

http://www.stuff.co.nz/business/industries/79861781/air-new-zealand-faced-up-to-12-billion-in-damages-in-cargo-cartel-case

The only good thing in that article is the photo!!

[Beagle]

When the button is pushed on a portfolio change, they go for broke - plenty of brokerage to be made by the house brokers.

Of course...I used to be one of their clients many years ago. Thank you for reminding me...a leopard doesn't change its spot's does it !

[couta1]

The only good thing in that article is the photo!! Yeah, just another sensational article full of ifs, buts and maybes.Nothing to read here, let's move on.:cool:

[Beagle]

I think they did the right thing here in settling. They really had no other option after in March 2016 the ACCC successfully appealed the earlier federal court's ruling...a matter that is yet to be settled. I recall that in the earlier Federal court decision AIR was awarded $3m in costs, something that will of course be reversed unless AIR win a higher appeal ? With that recent surprise in the Australian judicial system its no surprise that they wanted to mitigate risks in America the most litigious country in the world.

[Baa_Baa]

Yeah, just another sensational article full of ifs, buts and maybes.Nothing to read here, let's move on.:cool:

Good grief, just sweep it aside like it's not happening, when it's been happening for 5 years!

Now hopefully resolved with only a $35 million payment :eek2: to wiggle out of a stupid US law that says (in plain english) "even though you've won the court cases saying you're innocent, if we fry any of the so called cartel that you've been indicted with, then you AIR are jointly and severally liable, for upto 3 times the total settlement = $8 billion". I thought it was good article and thank goodness the Directors flicked em $35 big ones and this is the end of it, hopefully. :ohmy:

It's alright to be an eternal optimist but pretending to be blind and that that somehow immunises oneself from reality seems pretty foolish for a shareholder.

[Balance]

Of course...I used to be one of their clients many years ago. Thank you for reminding me...a leopard doesn't change its spot's does it !

Hard to ever forget (or forgive) Forsyth Barr for loading up their clients' portfolio with Feltex to the gunners (public information from Feltex court case).

[couta1]

The chances that Air would have had to pay 8 billion is about the same as you winning the major lotto prize two weeks running Baa Baa.PS-They still got US35 mill of our money for jam, the buggers.

[Beagle]

Maybe, maybe not, Couta1. Mate we don't know all the facts of the case. There has to be a reason so many other airlines settled as well....where there's smoke...

BUT mate its like one of those really bad advertorial shows on T.V. But wait there's more ! The Australian jurisdiction has yet to be settled "extract from above article"
In Australia 13 airlines have settled for an average A$7.6m (NZ$8.2m), with Qantas paying A$20m. If they settled for the average that's another $8.2m Kiwi plus the reversal of the previously awarded costs by the federal court $3m plus any award of the ACCC costs, say another $3m so about another $14.2m Kiwi.

One could also ponder if AIR's senior management knew the company was looking to settle this freight case in mediation in America at the time they sold their shares and ponder if they knew it would be for a material amount, doctrine of materiality is >5% of expected net profit after tax for the year, which it was. We have a "lovely level playing field" and I'm signing off for the day to enjoy a couple of well earned Tui's.

[Baa_Baa]

The chances that Air would have had to pay 8 billion is about the same as you winning the major lotto prize two weeks running Baa Baa.PS-They still got US35 mill of our money for jam, the buggers.

Not exactly, AIR couldn't pay $8b, they would be ruined and all shareholders lose everything (like last time for different reasons). So there's $35m paid out that won't be in the Dividend. And the Class Action successfully scours $1.2 billion out of all those airlines as compensation. They wouldn't pay if it 'wasn't ever likely' to have gone the full distance. Surprising how the vermin lurking under the floorboards of AIR take years to come to light and be resolved, but the rats nest can't be ignored.

[Baa_Baa]

[snip] One could also ponder if AIR's senior management knew the company was looking to settle this freight case in mediation in America at the time they sold their shares [end snip]

Precisely. What else don't shareholder know?

[couta1]

Yes Baa with a market cap of around 2.7 billion,I'm quite aware they couldn't pay it.:cool:

[Joshuatree]

Sounds like happy juice euphoria from the poster couta who is singing "The only way is up". I hope its not a suckers rally and recovery is not far away. Holding since my margin of safety entry of low $2.40's ,some time ago unfort, opportunities lost..

[RTFQ]

I believe, RR are having to repair their 787 engines under warranty, this may hinder the 787 certification for extended diversion twin operation into EZE.

The problem with having different seat configs on a fleet, is the headache in scheduling and marketing, specific airframes to specific destinations. Synergies' are lost.

[777]

I believe, RR are having to repair their 787 engines under warranty, this may hinder the 787 certification for extended diversion twin operation into EZE.

The problem with having different seat configs on a fleet, is the headache in scheduling and marketing, specific airframes to specific destinations. Synergies' are lost.

If that was the case then they would not have announced the change.

[skid]

Yes Baa with a market cap of around 2.7 billion,I'm quite aware they couldn't pay it.:cool:

Thats absolutely right Coutts--do you realize what a close call that was--a potential penalty 3 times the company value? and your wondering why the backlash from brushing this off as a ''nothing to see here-no news'' folks.
Guilty or not,they got swept up in the mess as a participant,whether they knew or not.
They may not of instigated it but one has to wonder if their management ,looked the other way.
This would have been the ''Pike river'' economically speaking.
They may still keep their part of VAH as well ,according to the article,nothing is certain.



PS-think about this,next time you hear JK or anyone trumpeting the value of the free trade agreement ,with its multitude of strings attached.

[biker]

The only good thing in that article is the photo!!

Very well said. Long may it last that a 747-400 is the archive photo used for aviation related articles.

[Beagle]

One alternative could be for Air NZ to sell 20 per cent of its stake, leaving it with a 6 per cent shareholding.

This a good thing that was in that article. Seen this on NBR too. One way for AIR to structure a sale of VAH is to sell 19.9% to a new shareholder which wouldn't require Canberra's consent. Other airline shareholders have creep provisions which enable them to buy up to 3% extra so AIR could sell its remaining 6% stake to its existing partners. Horribly inefficient those 747's. I reckon all future photo's in press articles should be of the new all black Dreamliner which is a truly beautiful piece of engineering and design.

[skid]

This a good thing that was in that article. Seen this on NBR too. One way for AIR to structure a sale of VAH is to sell 19.9% to a new shareholder which wouldn't require Canberra's consent. Other airline shareholders have creep provisions which enable them to buy up to 3% extra so AIR could sell its remaining 6% stake to its existing partners. Horribly inefficient those 747's. I reckon all future photo's in press articles should be of the new all black Dreamliner which is a truly beautiful piece of engineering and design.

I noticed ours (to BKK) is an A300--im not sure how efficient they are but i really love the ''2 seats by the window''set up --so much better than 3.
It will be interesting to someday fly in one of the 2 new ones

[Nasi Goreng]

I don't see many posts on here that look at Fibonacci numbers but what the heck, with so many other theories out there, why not throw this in the mix.

Yesterday was the 21st trading day since the recent highs so potential for today to provide a rebound. It doesn't look like a rebound will happen today so on the daily chart, the next day could be day 34 which means more short term pain.

Alternatively, a lower close this week will be 5 consecutive weeks of price falling. So there could be potential for a rebound next week, if not, lets look towards day 34 being the next low or week 8 being the time for a rebound.

Now some of you may see this as tea leave stuff but what you don't realise is that the koru on the air new zealand emblem is an illustration of fibonacci numbers expanding. Coincidence you say... hmmm I'm not sure.

[OldGuy]

its a shame that the predictive power of TA is generally so low, otherwise I might have actually read your post! :p

[workingdad]

I sold out circa 2.39 yesterday. Gave back the market a fair chunk of my gains this year and licking my wounds a bit.

I hung in there for as long as I could but when bourbon doesn't soothe the mind I had to do what felt right at the time - guess that makes me a weak holder and another shaken lose.

I still have thoughts of AIR being worth a lot more than what it is trading at but the sentiment just isn't there and I took a chance thinking it wasn't a strong recovery. My intention is to try to pick the bottom better this time and perhaps even recover the loss but at least I am avoiding losing any more in the meantime which judging by today has been a reasonable call but only time will tell if it is sustained. Either way I can come back in on the way back up and still be better off if its below the 2.39 level.

Re the email to investor relations I got a reply saying they will get back to me as the person has been out of the office.

[skid]

if you want to do the glass half full--This is fabulous compared to what could have happened with the price fixing problem.

You are not alone WD--theres a whole crowd of us--its just a matter of degrees

[vin]

Ahh well, I'm just going to sit on my holding for the next couple of years. Decent dividends coming my way, I'll ride it out.

[dobby41]

if you want to do the glass half full--This is fabulous compared to what could have happened with the price fixing problem.

It was never going to be $8billion!

[sb9]

It was never going to be $8billion!

Could've been a whole lot more though (than what they paid $52ml)...

[Mickey]

I sold out circa 2.39 yesterday. Gave back the market a fair chunk of my gains this year and licking my wounds a bit.

I feel your pain WD and everyone must follow their own strategy - so nothing wrong with what you've done as it's your decision.

Here's how I'm approaching it. I have about 8-10 years before I need any of the money I've invested in shares - possibly longer - so while I don't like seeing the price so low - I'm not losing sleep.

There's a couple of Buffet quotes I use as guiding principles:

"Rule No.1 - Never lose money
Rule No.2 - Don't forget Rule No.1"

The other is:
"Unless you can watch your stock holdings decline by 50% without becoming panic-stricken, you should not be in the stock market."

So, for me - as long as my timeframe permits and those 2 principles hold true - I'm holding and possibly accumulating once there's a change in direction. And there's also the dividends....

All the best to you.

[mayday]

looks AIR a bit oversold now, I will take a risk by buying a small parcel (not for long term holding though ;))

[BIRMANBOY]

As much as I hate to mention this term....
http://neoavatara.com/blog/wp-content/uploads/2012/09/DEAD-CAT-BOUNCE-44712975426.jpeg (http://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwi5wdnc4NPMAhVCmJQKHXUyBFEQjRwIBw&url=http%3A%2F%2Fneoavatara.com%2Fblog%2F%3Fp%3D14 209&psig=AFQjCNE2EsimTI7tThwgH6J-JijqfupGEw&ust=1463115508355272)
Good news, the bottom has been found and now its up, up and away! (fingers and everything else crossed as I am now 0.5 of a cent in profit excl brokerage lol)

[workingdad]

looks AIR a bit oversold now, I will take a risk by buying a small parcel (not for long term holding though ;))

I think there will be a bounce but not sure how long it will hold. Just on closing some large orders being placed with some big aftermarket trades going through around 2.295/2.30.

Perhaps this 2.27 support level is going to be hard to break through.

Monthly operating stats out next week maybe which could be good for AIR.

[winner69]

I don't see many posts on here that look at Fibonacci numbers but what the heck, with so many other theories out there, why not throw this in the mix.

Yesterday was the 21st trading day since the recent highs so potential for today to provide a rebound. It doesn't look like a rebound will happen today so on the daily chart, the next day could be day 34 which means more short term pain.

Alternatively, a lower close this week will be 5 consecutive weeks of price falling. So there could be potential for a rebound next week, if not, lets look towards day 34 being the next low or week 8 being the time for a rebound.

Now some of you may see this as tea leave stuff but what you don't realise is that the koru on the air new zealand emblem is an illustration of fibonacci numbers expanding. Coincidence you say... hmmm I'm not sure.

Spooky eh

I love the way nature works

[Baa_Baa]

Hat tip to Hoop and Xerof, only 10c or so away from their TA calculated price targets after the Head & Shoulders breakdown. http://www.sharetrader.co.nz/showthread.php?9176-Using-TA-to-time-entries-and-exits&p=618025&viewfull=1#post618025

Well done guys, outstanding insights. :t_up:

[Snow Leopard]

As you all should be aware I think that anyone buying airline shares is several sandwiches short of a picnic but I must say I find this recent descent more horrifying than yesterdays approach to Kuala Lumpur International through a thunderstorm (never seen an air-hostess look so terrified).

One wonders whether the combination of a decline of the NZD against the USD, higher oil prices and that Emirates have changed from handing out those nice hot real hand towels before take-off to a cold moist disposable tissue (started May 1st apparently) is adding to the woes of AIR's own particular situation.

But on a more upbeat note the strawberry and pomegranate smoothies (topped with whipped cream for an extra 4 dirhams) from Pinkberry in Terminal B at Dubai International are as good as ever.


Best Wishes
Paper Tiger

[skid]

This is one of those share atm that if you put in a buy order and have to go out for the day,with no way to check--you'd better cancel it first....wait till your right there,on deck. Your either not going to get it going one way ...or get burned if it goes the other.

[Baa_Baa]

This is one of those share atm that if you put in a buy order and have to go out for the day,with no way to check--you'd better cancel it first....wait till your right there,on deck. Your either not going to get it going one way ...or get burned if it goes the other.

Some people use stops, others might even use limit stops (and limit buys). Then spend the day doing whatever they want to rather than watching with a finger on the trigger.

[Lewylewylewy]

But that's like buying a lottery ticket and not watching the draw. Where's the fun in that? ;)

[couta1]

Some people use stops, others might even use limit stops (and limit buys). Then spend the day doing whatever they want to rather than watching with a finger on the trigger. And some may use none of the above and just buy at whatever the price was at the time and hold, collect divvys and spend the day doing what they want. PS-Stops and limit stops are terms I use only on the ski slopes.:cool:

[Baa_Baa]

And some may use none of the above and just buy at whatever the price was at the time and hold, collect divvys and spend the day doing what they want. PS-Stops and limit stops are terms I use only on the ski slopes.:cool:

Do you ski naked like you invest naked? ;)
Lol. Have a nice day.
:)

[couta1]

Do you ski naked like you invest naked? ;)
Lol. Have a nice day.
:) Would love to but Kathmandu need as much help as they can get so I keep buying their gear, and that's the naked truth :cool:

[axe]

next batter up is support @ 2.25.

[Beagle]

Would love to but Kathmandu need as much help as they can get so I keep buying their gear, and that's the naked truth :cool:

Nice one mate. Looking forward to seeing your technique on the slopes in Queenstown in September. VAH be all sorted by then and we'll be enjoying the slopes together and a few bevvies afterwards courtesy of our jumbo sized special dividend from AIR.

[couta1]

next batter up is support @ 2.25. Hard to determine any firm support level while Instos are still off loading, volume of over a million shares before 10.30 tells you the big boys are in the control of the share price for now.

[sb9]

Hard to determine any firm support level while Instos are still off loading, volume of over a million shares before 10.30 tells you the big boys are in the control of the share price for now.

This also won't help the sp either...

"Air New Zealand is facing more direct competition on an international route when Chinese-owned Hong Kong Airlines (HKA) launches a new service in mid-November."

http://www.nbr.co.nz/article/hong-kong-airlines-compete-new-auckland-service-ng-p-188981

[axe]

Hard to determine any firm support level while Instos are still off loading, volume of over a million shares before 10.30 tells you the big boys are in the control of the share price for now.

yep - already smashed through - big morning so far - $$$3.5mill through and its before lunch. is it NZ insto's selling - ozzies won't be at work this early :)

[babymonster]

This also won't help the sp either...

"Air New Zealand is facing more direct competition on an international route when Chinese-owned Hong Kong Airlines (HKA) launches a new service in mid-November."

http://www.nbr.co.nz/article/hong-kong-airlines-compete-new-auckland-service-ng-p-188981

i knew the news a few weeks ago but didn't think it would make too much impact on the sp.. but now think back, it might trigger instos sell out, maybe adding to the generally picture of tougher competition.,...

[couta1]

Hey OG, bet you never thought you'd get such a wild ride when you climbed aboard this roller coaster, the descents have been spine tingling and the climbs pretty ho hum, could even surpass the Xrocoaster for wildness aye.:cool:

[OldGuy]

haha, yeah. What a ride!!

But, to be honest, I not really fussed. I know this will be back over $3 within 12 months. And, in the meantime, the divvy's more than cover my cost of capital. :)

(having said that, I obviously would have been even happier to buy in at these lower prices, but them's the breaks!)

[forest]

So can the discussion now move onto what a sustainable EBITDA margin is? Can we expect 20%+ EBITDA margins going forward. Alternatively, should we expect a contraction back to 9% that was experienced post GFC?[/QUOTE]

Noodles, according to the ASB site the last 9 years had EBITDA margin at 14% avarage. Including the last 9 years were some years that AIR had minimal competition on some routes. Therefor I would not go above the 14% myself but no doubt some will strongly disagree.

[skid]

Just wondering if anyone knows what the of div % is at this SP level.

[Beagle]

Just wondering if anyone knows what the of div % is at this SP level.

Consensus average dividends for the next three years off 4 traders is 22 cps fully imputed so 22/ 0.72 = 30.56 cps = 13.52%.

[Beagle]

Noodles, according to the ASB site the last 9 years had EBITDA margin at 14% avarage. Including the last 9 years were some years that AIR had minimal competition on some routes. Therefor I would not go above the 14% myself but no doubt some will strongly disagree.

Noodles took the current year's forecast and incorporated the next two based on consensus broker forecasts so he made some attempt to measure an across the cycle average arriving at 16.1% EDITDA margin whereas your approach is purely backward looking and incorporates all of the years of the GFC since 2007 By doing that, in my opinion you are effectively assuming the effects of the GFC are going to repeat themselves over and over again in the future. When people are experiencing financial duress during what is undoubtedly the worst financial crisis since the great depression of 1929 they don't spend up on expensive travel and naturally that has had a significant effect on AIR for many years during the depth's of the great recession. To suggest the effects of the GFC are going to be felt perpetually going forward and no attempt should be made to capture the peak of the cycle's earnings in FY16, 17 or 18 is...shall I just say "its an interesting viewpoint" and leave it at that.

[Joshuatree]

Yes, leave it at that, good idea.But thats impossible for you ehh:).
Sensible conservative margin forest imo. A good safe benchmark to work from esp on such a volatile , surprising and a so many parts to stock.
So many fingers and hands and limbs lopped off buyers this week . Katmandhu have some sleeveless down jackets on special still.:)

[mikeybycrikey]

By doing that, in my opinion you are effectively assuming the effects of the GFC are going to repeat themselves over and over again in the future. When people are experiencing financial duress during what is undoubtedly the worst financial crisis since the great depression of 1929 they don't spend up on expensive travel and naturally that has had a significant effect on AIR for many years during the depth's of the great recession. To suggest the effects of the GFC are going to be felt perpetually going forward and no attempt should be made to capture the peak of the cycle's earnings in FY16, 17 or 18 is...shall I just say "its an interesting viewpoint" and leave it at that.

Considering that I feel like the GFC largely bypassed NZ, I don't think it's that unreasonable to include the margins from 2007.

In places like the United States, Ireland, Spain, etc, etc the property market fell like never before, dropping up to 50% in some places. In New Zealand and Australia we didn't even come close to that. Did property prices even fall at all in NZ?

How much has dairy dropped by? Maybe our GFC is still coming?

[Beagle]

Mikey, perhaps try telling the people that lost serious money in the finance company fiasco's, ($6 billion in total apparently), that the GFC bypassed us.

I think rather than engage in debate with those who appear to have their own agenda and are making their own amateur efforts to predict future margins its overdue we considered what the professionals are predicting.

First lets take a simple reality check. We all know lots more competition is coming and some is here already. We all know the effects of this are already being felt and will largely be in effect for much of FY17 and will be in full effect for the entire FY18 year. Analysts are also predicting fuel prices to return to some sense of normality by Fy18..we know yields move with fuel prices so even if they're different from the so called normal level, yields will adapt themselves so profit won't be materially different.

http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/financials/ Here we see the professional analysts are predicting, two years after the so called peak of the cycle that EDITDA margins will be 19.89% with all the effects of the extra competition. We can also see they're predicting EPS of 38.8 cps. 10 year average PE is 11 and interest rates are at 60 year lows so there's an argument for some PE expansion. If we attach an average PE of 12 to say average earnings of say 38.8 cps, (I will leave you folks to do the maths) we can see the potential for a steep recovery in the SP once all the uncertainty of extra competition and the VAH matter is successfully concluded.

Consensus broker valuation is $2.82.

[Snow Leopard]

Mikey, perhaps try telling the people that lost serious money in the finance company fiasco's, ($6 billion in total apparently), that the GFC bypassed us.

I think rather than engage in debate with those who appear to have their own agenda and are making their own amateur efforts to predict future margins its overdue we considered what the professionals are predicting.

First lets take a simple reality check. We all know lots more competition is coming and some is here already. We all know the effects of this are already being felt and will largely be in effect for much of FY17 and will be in full effect for the entire FY18 year. Analysts are also predicting fuel prices to return to some sense of normality by Fy18..we know yields move with fuel prices so even if they're different from the so called normal level, yields will adapt themselves so profit won't be materially different.

http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/financials/ Here we see the professional analysts are predicting, two years after the so called peak of the cycle that EDITDA margins will be 19.89% with all the effects of the extra competition. We can also see they're predicting EPS of 38.8 cps. 10 year average PE is 11 and interest rates are at 60 year lows so there's an argument for some PE expansion. If we attach an average PE of 12 to say average earnings of say 38.8 cps, (I will leave you folks to do the maths) we can see the potential for a steep recovery in the SP once all the uncertainty of extra competition and the VAH matter is successfully concluded.

Consensus broker valuation is $2.82.

Good to see that whilst not wanting to engage with 'amateurs' with 'agendas' in the same post we then get the agenda of this particular amateur.

We are asked to consider what the professionals are predicting including their consensus valuation of $2.82 whilst at the same time this amateur, with very little knowledge of how to value airlines, says they are wrong and it should be $4.65.

So, has he wishes, no debate with Roger, ignore his constant stream of ill-informed posts.

But maybe the rest of us can educate ourselves on the airline industry in general, Air New Zealand in particular and the dark secrets of real fundamental analysis of this sector of the share-market.

Best Wishes
Paper Tiger

[winner69]

I can sense Carters outrage at the temerity of a shareholder casting aspersions on senior managers behaviour re their share dealing (assuming he's to actually see the email)

The response will be all approvals have given and they are totally confident that management do the right things.

Whatever, management have been pretty canny/clever/lucky this time around at selling at very good prices before the 'collapse ' of the share price.

Shareholders should be pleased that top management are so canny/clever/lucky - good attributes to have in running a business

[h2so4]

Perhaps we should be doing the opposite of what the professionals are predicting. LOL!

[Jay]

Consensus average dividends for the next three years off 4 traders is 22 cps fully imputed so 22/ 0.72 = 30.56 cps = 13.52%.

At that rate something has to change - surely, either the sp increases or the dividend will not be as high, if only we could predict which one!

[777]

I can sense Carters outrage at the temerity of a shareholder casting aspersions on senior managers behaviour re their share dealing (assuming he's to actually see the email)

The response will be all approvals have given and they are totally confident that management do the right things.

Whatever, management have been pretty canny/clever/lucky this time around at selling at very good prices before the 'collapse ' of the share price.

Shareholders should be pleased that top management are so canny/clever/lucky - good attributes to have in running a business

It will still inform them that there are shareholders out here that watch what they do and not all are in agreement with their actions. If top management in NZ were so fantastic then the Shareholders Association would never have been formed.

Emails such as Roger's at least makes them have a look at what has taken place and they can perhaps do better next time.

Shareholders own the company not the managers. They are just employees of the company.

[Joshuatree]

How To Lose Friends And Influence People by Roger Ramjet
What a condescending post!
Note all the "WE's" (I count 7 )as if he is speaking for all of us!!!. Speak only for yourself!!
Speaking of Agendas never has one been so driven as him ; many hundreds of posts on here; many back up the truck and load up in the high $2..A stopped clock is right twice a day!.

Whats the finance fiasco got to do with anything including HBL!!!.

Good point H2SO4 Doing the opposite to the" professionals" is often a good tactic.they have so many agendas of their own like looking after the "smart" money above all else.

AIR has always been a traders cyclic dream and if Instos have made the decision to sell down/out they will keep going until they've finished regardless of the s/p.Then just maybe one can hope for a new cycle and make some dough.

Its great to have ALL opinions on here esp conservative balanced ones

Mikey, perhaps try telling the people that lost serious money in the finance company fiasco's, ($6 billion in total apparently), that the GFC bypassed us.

I think rather than engage in debate with those who appear to have their own agenda and are making their own amateur efforts to predict future margins its overdue we considered what the professionals are predicting.

First lets take a simple reality check. We all know lots more competition is coming and some is here already. We all know the effects of this are already being felt and will largely be in effect for much of FY17 and will be in full effect for the entire FY18 year. Analysts are also predicting fuel prices to return to some sense of normality by Fy18..we know yields move with fuel prices so even if they're different from the so called normal level, yields will adapt themselves so profit won't be materially different.

http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/financials/ Here we see the professional analysts are predicting, two years after the so called peak of the cycle that EDITDA margins will be 19.89% with all the effects of the extra competition. We can also see they're predicting EPS of 38.8 cps. 10 year average PE is 11 and interest rates are at 60 year lows so there's an argument for some PE expansion. If we attach an average PE of 12 to say average earnings of say 38.8 cps, (I will leave you folks to do the maths) we can see the potential for a steep recovery in the SP once all the uncertainty of extra competition and the VAH matter is successfully concluded.

Consensus broker valuation is $2.82.

[stoploss]

It will still inform them that there are shareholders out here that watch what they do and not all are in agreement with their actions. If top management in NZ were so fantastic then the Shareholders Association would never have been formed.

Emails such as Roger's at least makes them have a look at what has taken place and they can perhaps do better next time.

Shareholders own the company not the managers. They are just employees of the company.
But in this case the problem is the managers are shareholders ......

[mayday]

How To Lose Friends And Influence People by Roger Ramjet
What a condescending post!
Note all the "WE's" (I count 7 )as if he is speaking for all of us!!!. Speak only for yourself!!
Speaking of Agendas never has one been so driven as him ; many hundreds of posts on here; many back up the truck and load up in the high $2..A stopped clock is right twice a day!.

Whats the finance fiasco got to do with anything including HBL!!!.

Good point H2SO4 Doing the opposite to the" professionals" is often a good tactic.they have so many agendas of their own like looking after the "smart" money above all else.

AIR has always been a traders cyclic dream and if Instos have made the decision to sell down/out they will keep going until they've finished regardless of the s/p.Then just maybe one can hope for a new cycle and make some dough.

Its great to have ALL opinions on here esp conservative balanced ones

Good point, Josh. I remember how ATM sp was being traded at the same time last year, once it had reached as low as 0.485 cents before jumping over $2 within less than 12 months......down was driven by NZ first captial and milford asset management and some other instos (can't remember their names) selling off their stakes in company yet it also created one unique opportunity for buyers....luckily I bought a few 'falling knives' at that time...me think AIR sp will be re valued and stablise within next couple of weeks. IMHO, DYOR :)

[Beagle]

Happy for all the naysayers to run rampant. Hammer on standby :)

[couta1]

While there are over 3 thousand members on the forum,only a tiny percentage of that number bother to contribute, so without posters like Roger who are willing to put in a considerable effort, this forum would be a pretty dull place.

[Joshuatree]

Contributions and all opinions are welcome ; attempts to influence and inferring only one person is correct and everyone else is wrong, acting like a qualified financial advisor:cool: isn't nor is being the acting spokesman for those 3000 or preaching in an autocratic style. An open moving discussion is great..

[hamish]

FYI - Article on AIR NZ Exec's Share Trades and Special Dividend Possibility (re-typed from from NBR May 6)

Air New Zealand executives have sold $5 million of their company shares this year even as analysts look forward to a special dividend from the sale of its Virgin Australia stake.
The biggest seller was chief financial officer Rob McDonald, who sold shares and cashed in options to realise $1.8 million.
The long-serving CFO also sold shares and cashed in options in December to realise $1.16 million, bringing his total share sales in the last six months to almost $3 million.
Views on the significance of executive share sales are mixed.
One analyst, who asked not to be named, said airline executives worked in a volatile industry where share price appreciation was relatively rare.
“I don’t begrudge them selling stock on that basis,” he said. “We need to be a little more forgiving based on the history of the business and the airline sector.”
Although executive share transactions could be seen as a signal of company fortunes, he did not see it as an indicator in this case.
“I don’t think this management team or any airline management have a strong ability to forecast the future,” he said.
Fund managers had another perspective on the sales.
“You’d always rather see people buying shares than selling them,” said one, although “everyone’s aware the business of airlines is extraordinarily cyclical.”
Andrew Bascand of Harbour Asset Management said whatever the reason for the sales some investors would draw conclusions.
“Is this a positive or a negative signal?” he said. “Globally, quantitative analysis does indicate that on average significant selling by executives can be a signal for underperformance in out years.”
Globally, there could be investors who use that as a signal and do respond themselves, and that itself can create weakness in the share price.”
However, “they’ve created shareholder wealth haven’t they – no doubt about that.”
On Tuesday an Air NZ investor presentation said the company saw lower profits in 2017, based on the impact of competition and the absence of favourable foreign exchange hedges affecting the 2016 result.
“Expect 2017 earnings to be be solid while not at the level of 2016,” the company said.
In February Air NZ said its pretax earnings were expected to be more than $800 million for the year to June, well ahead of the comparable 2015 figure of $496 million.
All the executive share sales occurred before Air NZ’s market update but investors said they were already aware the airline’s 2017 performance would not match the particularly high level seen this year.
“That was already in everyone’s forecasts,” said a fund manager.
Special dividend
An Air NZ spokesperson said executives were not permitted to trade during the preparation of the half-year results and during discussions of its Virgin Australia selldown, announced on March 30. “The recent increase in executive trade sales disclosed to the NZX reflects a small backlog that might have otherwise been spread more evenly across this period.”
All the 2016 trades disclosed to the NZX took place since March 31.
This week’s presentation also highlighted Air NZ’s ability to attach imputation credits for a dividend of up to $750 million, seen by some as indicating a special dividend is in the offing.
The source of the money would be Air NZ’s pending sale of its 25.9% stake in Virgin Australia, which at current prices is worth about $300 million.
The analyst said the implication of Air NZ’s comment on imputation credits was clear.
“You can draw the dots quite quickly.”
Mr Bascand said Harbour analyst Shane Solly, who was at the airline’s presentation, drew clear conclusions.
“Shane’s strong impression was unless they find something to do with that capital you should expect a special dividend or a more progressive dividend policy. I think with airlines, because of the volatility of their earnings, a special dividend’s more appropriate.”
For the year to June 2015 Air NZ paid ordinary dividends of 16c a share, or about $180 million.

[hamish]

Contributions and all opinions are welcome ; attempts to influence and inferring only one person is correct and everyone else is wrong, acting like a qualified financial advisor:cool: isn't nor is being the acting spokesman for those 3000 or preaching in an autocratic style. An open moving discussion is great..

Surely, everyone reading these forums takes would / should take all posts as 'info from like minded informed amateurs' and seek financial advise as needed. I enjoy everyone's diverse views. Adds to the colour

[workingdad]

Nothing wrong with differing opinions but I have found some comments over the last couple of weeks poor form and really would prefer if those with an agenda of taking a personal dig keep it to themselves. I value all the view points of various posters and appreciate the time some put into analysis and charts, thank you for that.

On AIR. The headwinds with competition as I see it, even if it eats into 10% of AIR's market in the next year with a 10% increase in tourism surely that's merely a break even point from the current climate of increased sales.

Fridays trading was interesting, shortly after opening a sharp drop associated with a large parcel of shares and the subsequent panic sell off an hour or so later it had all but recovered and traded in that 2.26 range for the majority of the day, not as many sellers coming in as in previous days so perhaps a reluctance for the remaining holders to sell. Doesn't rule out institutions selling but perhaps from my perspective there is some merit in stating the drop is nearing a conclusion and perhaps more likelihood of starting to recover next week? I am wanting to buy back in but being a bit more cautious than I have been in the past with taking a hit of AIR in the last couple of weeks.

I agree with some others that VAH is the monkey on the back at present and this would be the catalyst for a strong recovery if its a reasonable outcome.

Until then, I have a day trip to wellington with AIR on the 23rd so will take note of how full the A320 is. Yes there are cheaper fares available but Koru will keep me AIR as I enjoy the downtime it offers and of course the snacks and coffee :)

[Baa_Baa]

It's understandable that there would be a few frayed nerves when AIR share price comprehensively breaks down after so recently exciting holders with news highs, a 30% fall from grace!

But break down it did, big time, through all notable short and medium term technical supports. The one technical glimmer of hope at the moment is the Friday probe below long term support from Jun'14 and Sep'14 and recovering to close right on it.

Otherwise it's a mess and buyer or seller right now might as well be in a casino rolling the dice.

8036

[Leftfield]

Thanks Baa Baa...... much is resting AIR's exit from VAH and that is a rolling dice (BTW check out the similarities in VAH's SP graph.)

[mikeybycrikey]

After reading a post from Roger yesterday stating that the PE across the long-term cycle should be about 11 or 12, it got me thinking about what the longer-term profit estimates might be, given the current SP of 226.

That means I'm looking for a total discounted profit over ten years of 205 cps (average 20.5 cps or (226/11) per year). If we've got high profit now, we should be expecting lower profit in the future. But how much lower? This obviously assumes the market is correctly pricing things, of course. That's a big "if".

From 4-traders, the profit estimates for 2016-2018 are 56.0, 52.1 and 38.8, respectively.

After factoring in a little growth and a reasonable discount rate, the profit would need to be 16 cps for the 7 years after 2018 to justify the current SP.

I've only got profit figures going back to 2010 on me but 16 cps is higher than the profit for every year from 2010-2012. And only just lower than 2013.

To justify a SP of 300, we're looking at on-going profit from 2019-2025 of 30 cps. Correct me if I'm wrong but I think that is a higher profit than AIR have ever reported before (although this year is going to surpass that in a few weeks).

Based on this, I'd say that to justify a higher SP in the longer term, AIR needs to prove that they can keep profits up in the bad times as well as the good. It's really easy to say that "this time is different" when we're at the top of a boom. Only time will tell if they really are.

[Snow Leopard]

So here is the latest Tiger Take on the medium term future of AIR. Calculated value is based on a cash flow model.

NPAT for 2016 - 2020 is derived from EBITDA figures from the brokers, AIR Announcements & Investor Presentations and the holes are filled with Educated Guessing.

Post 2020 everything is normalised long-term assumptions including that gearing is 50%, that AIR maintains fleet size, the average average fleet age is 9 years and normalised capex exceeds normalised depreciation by 20% - that digs into the available cash to give away a bit.

Another assumption is that from 2016 a total ordinary dividend of $0.20 raising at 3% pa thereafter is paid.

I have ignored VAH completely: if it is sold it is a one off; if it is kept then it may be a benefit, or not.

As you can see, I am slightly currently above current broker consensus of $2.82, but my value actually drops over the next two years and then ends up at $2.92 in June 2020.

http://i7.photobucket.com/albums/y269/TheTigerWithNoName/SharetraderImages/NZX-AIR/NZX-AIR-20160514-Val-Sum_1.png

Obviously a lot of people are not going to like the above but that is how I see it at the moment.

Do Do Your Own Research.

Best Wishes
Paper Tiger

[Snow Leopard]

After reading a post from Roger yesterday stating that the PE across the long-term cycle should be about 11 or 12, it got me thinking about what the longer-term profit estimates might be, given the current SP of 226.

That means I'm looking for a total discounted profit over ten years of 205 cps (average 20.5 cps or (226/11) per year)....

I firmly believe that a PE ratio should never, ever be used as an input into a calculation of future value, profits etc.

Best Wishes
Paper Tiger

[Baa_Baa]

@PT that would seem to be a remarkable achievement, to basically flatline Value$ while almost halve NPAT?

[James108]

Not at all, why would a company be valued based on a $600M NPAT when 4 years later you know NPAT will almost half (for the purposes of his model).

On a per share basis $300M (half of $600M) is only 22 cents and not all of this will leave the business in the form of dividends. So you would expect the value of the company to drop by less than 20 cents/share over 4 years.

[Snow Leopard]

@PT that would seem to be a remarkable achievement, to basically flatline Value$ while almost halve NPAT?

Good spotting - Neat eh?
I did say that the valuation was based on a cash flow model but put up profits (the difference is related to the capex).

So for FY2016 to FY2020 the cash numbers go:
2016: $419;
2017: $453;
2018: $312
2019: $269;
2020: $498;
and then (with a change to normalised years)
2021: $313;
2022: $322;
2023: $332; etc.
(DO NOT READ the above numbers if you believe there is any possibility of being confused).

So with my model (as with lots of model) the value is based on the sum of the individually weighted values of future years cash flows (the actual details are secret, if I told you I would have to eat you :D).
So simply this means that any one year does not cause a drastic jump in value.

Now the actual reason I settled on presenting the results of a cash flow model is that the results for a profit based model are a lot more scary and more in line with what you are obviously expecting. :t_down:

Best Wishes
Paper Tiger

[Snow Leopard]

Not at all, why would a company be valued based on a $600M NPAT when 4 years later you know NPAT will almost half (for the purposes of his model).

On a per share basis $300M (half of $600M) is only 22 cents and not all of this will leave the business in the form of dividends. So you would expect the value of the company to drop by less than 20 cents/share over 4 years.

If $300M is $0.22 per share then that implies 1.364 billion shares as opposed to the current 1.123 billion and thus an increase of 240 million.

Is there really that much in management incentives kicking around?

Best Wishes
Paper Tiger

[James108]

You are right, that is the problem with using your mouse to operate a calculator.

[Snow Leopard]

You are right, that is the problem with using your mouse to operate a calculator.

Good, I can stop having a heart attack then !

Best Wishes
Paper Tiger

[Baa_Baa]

@PT sure is an interesting model, so the only thing propping up the value is the dividend? Like buying a property that doesn't increase in value but is fully leased, generating a modest (albeit desirable) yield with no capital growth despite underlying deterioration in earnings. Notwithstanding the incalculable cyclical gyrations in the share price, which clearly have little correlation to fundamental value, that will invariably screw any analysts FA model.

[James108]

@PT sure is an interesting model, so the only thing propping up the value is the dividend? Like buying a property that doesn't increase in value but is fully leased, generating a modest (albeit desirable) yield with no capital growth despite underlying deterioration in earnings. Notwithstanding the incalculable cyclical gyrations in the share price, which clearly have little correlation to fundamental value, that will invariably screw any analysts FA model.

What else would give you (the shareholder value)? The only things that give a company value to a shareholder is

a) the dividend
and
b) the ability to pay future dividends

The reason growth is desirable is because in the future greater dividends will be received. It looks like PT has used a cyclical average cash flow after 2020 increasing at a modest rate of growth.

Cyclical variations in share price have nothing to do with the value of the company and therefore will not "screw up" FA models and will provide an opportunity to sell when SP exceeds value or buy when SP is less than value.

[Baa_Baa]

@James good points, except a lot of shareholders look for capital growth as well. Arguably most (but not all) do.

To buy a share that fluctuates +/- 30% or more in capital value for the reward of a dividend seems isolated to just a few around here, though they argue a good rationale for their decisions as well.

It seems the FA inclined are generally not willing to do what you suggest to buy/sell the over/under SP performance in value. I accept that some are so loaded that buying or selling a whole holding is cumbersome and expensive, which is a problem I can only wish for some day.

So far on here we've had a no FA's who have foreseen the current share price decline, let alone predicted the current SP, yet many still hold and hope, though two TA's who have generously shared with us, have picked the share price as of Friday within a few cents, and might be bang on next week.

FA seems to mean bugger all when it comes to wildly fluctuating share prices. Though it doesn't work for those who have and can justify a focus on capital management.

[James108]

@James good points, except a lot of shareholders look for capital growth as well. Arguably most (but not all) do.

This is an important distinction. As as I discussed earlier the only way a company can have value to a shareholder is by returning cash to the shareholder over its life (discounted appropriately). When the share price exceeds the expected discounted dividend flow (i.e. the value) it is probably a good time to realise a capital gain. As you can see investors also like to make capital gains.

I agree that no analysis is very useful when predicting short term share price movements as evidenced by the chart you posted with a lot of lines drawn on it a few pages ago. However short term shareprice movements certainly give the agile investor opportunity to profit.

[Hectorplains]

This is an important distinction. As as I discussed earlier the only way a company can have value to a shareholder is by returning cash to the shareholder over its life (discounted appropriately). When the share price exceeds the expected discounted dividend flow (i.e. the value) it is probably a good time to realise a capital gain. As you can see investors also like to make capital gains.

I agree that no analysis is very useful when predicting short term share price movements as evidenced by the chart you posted with a lot of lines drawn on it a few pages ago. However short term shareprice movements certainly give the agile investor opportunity to profit.

This is looking like deja vu. The hard ramping of a stock by a few, based mostly on dividend levels, even in the face of falling share price and ever more difficult trading conditions for the stock. Only for the main player to much later admit they'd bailed out - apparently long ago - from said share. Check PGW thread.

[James108]

You have completely misinterpreted my post.

I have not made any analysis of AIR and I do not think I have the skills or knowledge to put a value on AIR, therefore I do not have a holding in AIR. Generally I try and be the smartest guy in an empty room and avoid any company in the NZX10. However any share that has 25% drop in SP over such a short time is interesting.

From what I have seen PT has made a decent attempt to value the company, based on his analysis AIR may be trading at a small discount to value.

Also I agree with you, the ramping on here is pretty ridiculous.

[Snow Leopard]

@PT sure is an interesting model, so the only thing propping up the value is the dividend? Like buying a property that doesn't increase in value but is fully leased, generating a modest (albeit desirable) yield with no capital growth despite underlying deterioration in earnings. Notwithstanding the incalculable cyclical gyrations in the share price, which clearly have little correlation to fundamental value, that will invariably screw any analysts FA model.


@James good points, except a lot of shareholders look for capital growth as well. Arguably most (but not all) do.

To buy a share that fluctuates +/- 30% or more in capital value for the reward of a dividend seems isolated to just a few around here, though they argue a good rationale for their decisions as well.

It seems the FA inclined are generally not willing to do what you suggest to buy/sell the over/under SP performance in value. I accept that some are so loaded that buying or selling a whole holding is cumbersome and expensive, which is a problem I can only wish for some day.

So far on here we've had a no FA's who have foreseen the current share price decline, let alone predicted the current SP, yet many still hold and hope, though two TA's who have generously shared with us, have picked the share price as of Friday within a few cents, and might be bang on next week.

FA seems to mean bugger all when it comes to wildly fluctuating share prices. Though it doesn't work for those who have and can justify a focus on capital management.

Firstly the sarcastically amusing bit:

Typical TA attitude basically caused by the fact that they are rather upset that despite spending all day pouring over data, turning charts sideways, searching for hidden tea-cup patterns and drawing lines all over their multi-thousand dollar computer screens they have for the umpteenth time just had to buy back at a much higher price something they got whip-sawed out of a few days ago and they not be able to admit that what is really really annoying them is that their neighbour bought the same damn stock years ago, as never ever sold any, and not only spends his days walking the beach with his family and dog whilst they plan where they are going to go on holiday with all the dividends they get but also the b*****d has just replaced his three year old Porsche for a new one.

Secondly a serious bit:

I am sure that there are a large number of people who genuinely will buy AIR because the current price appears to provide a good discount to fair value and be perfect happy to then completely ignore the price going up and down and just take the dividends. They may well sell if the fundamentals of the company change or if they need/want some cash and AIR strikes them as the most overvalued item in the basket at that time.

But fascinatingly enough buying and holding a diverse portfolio is a usually as valid and successful investment strategy as any other over time, and fits some people like a glove.

Thirdly another serious bit:

Despite it being a $2.90 value on special at $2.26 I will not buy it. Not only is the share price all over the place (in a way that neither fundamental or technical analysis predict) but fundamentals & fundamental valuations can and do change drastically, on a too frequent basis and too often to the down size.
Add in that I do not see this as a long term growth stock.
That does not suit this investor.

Best Wishes
Paper Tiger

[Snow Leopard]

This is looking like deja vu. The hard ramping of a stock by a few, based mostly on dividend levels, even in the face of falling share price and ever more difficult trading conditions for the stock. Only for the main player to much later admit they'd bailed out - apparently long ago - from said share. Check PGW thread.

We were having such a nice discussion...

Grrrhhh & Best Wishes
Paper Tiger

[Beagle]

It doesn't really matter what valuation methodology one uses its extremely hard to predict the future other than death, taxes, the sun coming up tomorrow morning and the fact that some people will always be argumentative...the rest is almost pure conjecture and speculation. The company itself cannot give guidance beyond FY17 so estimates out past that date are at very best an educated guess and often a lot worse.

I am happy to stick with the professionals consensus valuation from here which I feel is very conservative at $2.82. That said its interesting to note that despite QAN growing at a slower pace than AIR and presently earning at ostensibly the same rate their consensus valuation is presently $4.49. Speculation on what is a sustainable EDITDA margin beyond the current analysts projection horizon is almost a meaningless exercise as nobody can reliably predict the operating environment in FY19 let alone FY20 or beyond. That said I remain of the view that the effects of the GFC in terms of its impact on margins and demand since 2007 will not last forever despite the present flow on effect of very low worldwide economic growth and I remain of the view that with an average fleet age of only 6.2 years projected by the company in FY19, AIR are extremely well positioned to compete and the resulting efficiencies from such a modern fleet auger well for margins going forward from there.

AIR's response to the recent e.mail I sent through and possible subsequent follow up with the NZX and FMA is what I am presently focusing my attention on. I feel it is far more productive and useful to other shareholders that I expend my energy on that than trade blows with those making personal attacks on here.

[OldGuy]

I wouldn't let the haters bother you, Roger.

I, for one, highly value your posts.

[Beagle]

I wouldn't let the haters bother you, Roger.

I, for one, highly value your posts.

Thanks mate, I believe Taylor Swift says it well, wonder which airline she flies when downunder ? https://www.youtube.com/watch?v=nfWlot6h_JM

Had an interesting chat with the owner of one of the leading boat manufacturing companies based in Napier while at the boat show on Friday. Got onto the topic of how Jetstar has been performing with it flights too and from Napier. Completely unacceptable reliability (and punctuality when they do fly) was the gist of his comments.

[trader_jackson]

Nothing wrong with differing opinions but I have found some comments over the last couple of weeks poor form and really would prefer if those with an agenda of taking a personal dig keep it to themselves.

Is AIR the new PEB thread? ;) That one has been unusually quiet recently...

At least on the AIR thread, nobody seems to have been driven to leave...;)

[skid]

Is AIR the new PEB thread? ;) That one has been unusually quiet recently...

At least on the AIR thread, nobody seems to have been driven to leave...;)

Thats because things have been so wild here lately TJ--much more action over here (although everyones gotten excited over a tweet over there at PEB) SP dropped 2c though---If something actually happens (peb) they'll come back Im sure
Someday maybe.....

[Beagle]

http://www.nbr.co.nz/article/carry-air-nz-boosts-routes-new-iran-service-and-more-ng-188984

We keep hearing the naysayers talking about all the increased competition but isn't it funny we never hear from them discussing how AIR is expanding at its fastest rate in 76 years while still maintaining load factors at near record level's.

[stoploss]

Is AIR the new PEB thread? ;) That one has been unusually quiet recently...

At least on the AIR thread, nobody seems to have been driven to leave...;)
I don't think so . Last time I looked Air.nz made a profit and paid a dividend .

[iceman]

NBR´s Carry On is a great weekly read. Very informative.

I agree about competition Roger. The air travel growth is happening at a fast pace worldwide, US, Europe, Asia and Oceania all growing fast.
I am very pleased to see AIR increasing capacity on my frequentely traveled route to Buenos Aires and introducing the Dreamliners. Missed them after switching from LAN.

As I have told you, I think AIR is doing very nicely on this route with good loads on all the flights I have been on and apparently much more freight than they expected.


http://www.nbr.co.nz/article/carry-air-nz-boosts-routes-new-iran-service-and-more-ng-188984

We keep hearing the naysayers talking about all the increased competition but isn't it funny we never hear from them discussing how AIR is expanding at its fastest rate in 76 years while still maintaining load factors at near record level's.

[Beagle]

I can sense Carters outrage at the temerity of a shareholder casting aspersions on senior managers behaviour re their share dealing (assuming he's to actually see the email)The response will be all approvals have given and they are totally confident that management do the right things.

Whatever, management have been pretty canny/clever/lucky this time around at selling at very good prices before the 'collapse ' of the share price.

Shareholders should be pleased that top management are so canny/clever/lucky - good attributes to have in running a business

I'm not so sure mate. He seems ready willing and able to engage openly and honestly with shareholders and I enjoyed a good chat with him after the last annual meeting. Struck me as a straight shooter.
Won Chairman of the year at last year's Deloitte top 200 awards and this from the N.Z. shareholders association

NZSA has announced that Mr Tony Carter is the recipient of its 2015 Beacon Award. Tony has been chosen for his unwavering commitment to best practise corporate governance, high ethical standards and willingness to engage fairly and openly with all shareholders .

Their response will be interesting. At least they have acknowledged my communication so that's something but I await their formal response with interest. I don't have the time or tenacity of Max Gunn or Bruce Sheppard but someone has to do something now their guns are silent so its worth a shot and might be worth a shot through the FMA if they don't take shareholders concerns seriously.
Got more fire in my belly now regarding this matter seeing the extent of the SP decline post the investor day briefing. That and I think its not unreasonable to assume that senior management would also have known that they were looking to settle that freight dispute imminently at the time they sold so in effect they had the jump on regular shareholders in that regard as well.

Hi Iceman, I'm sure AIR will look after you in business class on their new Dreamliner...sounds like a "very tough" way to start your work assignments over there :)

[Raz]

I'm not so sure mate. He seems ready willing and able to engage openly and honestly with shareholders and I enjoyed a good chat with him after the last annual meeting. Struck me as a straight shooter.
Won Chairman of the year at last year's Deloitte top 200 awards and this from the N.Z. shareholders association


Their response will be interesting. At least they have acknowledged my communication so that's something but I await their formal response with interest. I don't have the time or tenacity of Max Gunn or Bruce Sheppard but someone has to do something now their guns are silent so its worth a shot and might be worth a shot through the FMA if they don't take shareholders concerns seriously.
Got more fire in my belly now regarding this matter seeing the extent of the SP decline post the investor day briefing. That and I think its not unreasonable to assume that senior management would also have known that they were looking to settle that freight dispute imminently at the time they sold so in effect they had the jump on regular shareholders in that regard as well.

Hi Iceman, I'm sure AIR will look after you in business class on their new Dreamliner...sounds like a "very tough" way to start your work assignments over there :)

Surely someone on that Board or management knows better and has worked for a F500 company at some point. They then would know in the international market place they would be looked at sideways for their actions. It come down to leadership, do they want to be a world class company or not.

[Raz]

NBR´s Carry On is a great weekly read. Very informative.

I agree about competition Roger. The air travel growth is happening at a fast pace worldwide, US, Europe, Asia and Oceania all growing fast.
I am very pleased to see AIR increasing capacity on my frequentely traveled route to Buenos Aires and introducing the Dreamliners. Missed them after switching from LAN.

As I have told you, I think AIR is doing very nicely on this route with good loads on all the flights I have been on and apparently much more freight than they expected.

Also their marketing is doing well, their latest marketing to US is clever with the "go further" concept. They are not discounting their international flights as much as the competition however their add on flights wrt domestic USA are priced well and made easy to consider. They are using their strategic alliances well, minimising their revenue share to them while maximising their gain.

AA and qantas should poach someone from AIRs marketing department as their are not highlighting their advantages and points of difference well enough beyond price.

They are offering wifi, the 787 product, a clear product which is advantageous currently to AIRs offering on the routes, plus the hold fares feature via Qantas which allow you to defer paying for months now if you work it right:-)

Great marketing case study.

Now back to Manhattan or will the AIR share price be more exciting today :-)

[mikeybycrikey]

I firmly believe that a PE ratio should never, ever be used as an input into a calculation of future value, profits etc.

You're right, looking at the future based on PE is a bit of a pointless activity. I've just seen so many posts here about how AIR currently has a PE of 5 (or even worse, bringing up the dividend yield) and surely that means it's undervalued. I'm only trying to bring up a scenario where the current PE of 5 is reasonable and it doesn't mean that the stock is undervalued. I'm certainly not thinking that I'm predicting profit with it!

I'm aware that the P/E ratio is more useful as a rule of thumb than as an actual predictive measure although I feel like this analysis helped me visualise better what an SP of 300 really means for AIR desite the high profits in 2016 and 2017.

[Beagle]

Dear Roger and associated shareholders,

Thank you for your email and we acknowledge your concern over the senior management share sales in recent weeks. Per your request, I am able to schedule a call with yourself and Mr. Carter for this Thursday, 19 May at 12:30pm NZT, so that he can provide more specifics around the procedures that we go through at Air New Zealand. Please let me know if this time will work for you and also the phone number that Mr. Carter can use to call you directly?

In the interim, I did want to provide you with information on Air New Zealand’s Securities Trading Policy, as well as briefly address some of your comments related to Virgin Australia and our recent Investor Day event.

Firstly, be assured that we take insider trading and unauthorised staff (including executive and senior management) trading of Air New Zealand shares very seriously, hence the reason for our Securities Trading Policy, which you can access by clicking the below link.
http://www.airnewzealand.co.nz/assets/PDFs/Securities-Trading-Disclosure-Policy-April-2016.pdf

Under this Policy, all the executives and senior management who undertake share sales which you see disclosed on the NZX, are classified as “Restricted Persons”. Under this policy, all Restricted Persons must have a signed Consent to Trade signed by an authorised approver before participants sell or buy shares, which must then be disclosed. In each and every case of executive share sales in recent weeks which you are referring to, the executive for whom a disclosure has been made has requested, signed and received a Consent to Trade.

By signing this Consent to Trade the participant is confirming that they do not have access to information which is not generally available to the market and would have a material effect on the price of Air New Zealand shares if it were generally available to the market.

In the case of recent executive share sales, this would include any information they believed could be market sensitive in relation to any information disclosed on the Investor Day and any information in relation to the possible sale of Virgin Australia.
- In relation to the Virgin Australia announcement, Christopher Luxon stepped down as Director of Virgin Australia on 30 March 2016, and therefore was not privy to the Q3 results announcement or the outlook statement prior to this being made public and certainly not in the time leading up to any share sales, nor were any other Air New Zealand executive.

- The Investor Day did not include any further information that specifically resulted in a profit downgrade for FY17 which was not already public information. Market consensus of broker forecasts were already forecasting that FY17 earnings would be lower than that of FY16, and we affirmed this position during the Investor Day, including information about the competitive environment and FX impact which were already public information.

Finally, I thought it might be helpful to provide some insight on what is occurring within the global airline industry, as we feel it has been impacting our share price within the past few weeks. As you know, Air New Zealand is an airline, and to that effect, our share price can react with volatility that is not simply explained by our own financial performance or news. In fact, it was the traffic report released by Qantas in mid-April that initiated weakness in our stock price. Looking at the broader industry, quite a few of the global airlines have also seen declines in their share price ranging from -10% to -15% over the same time period. Air New Zealand does have a significant portion of institutional shareholders based in the U.S., therefore it is not surprising that our share price would experience similar volatility to these global airlines.

I hope that this information is helpful to you and that you find your conversation with Mr. Carter later this week beneficial as well. Again, please confirm that Thursday at 12:30pm is a good time to reach you and provide the best phone number to call.



Best regards,

[couta1]

Nice work Roger, and the second to last paragraph hits the nail on the head as to why the share price has fallen IMO.

[Beagle]

Dear Leila,

Thank you for your e.mail and information and for the opportunity to speak with Mr Carter on Thursday 19th 1.15 p.m. (Note she subsequently suggested 1.15p.m. as a better time for Mr Carter)
That time suits fine and I look forward to discussing this matter further with him at that stage. My office number is noted below.

I know the directors and senior managers are extremly busy people so its perhaps helpful in terms of time saving to mention I'm fully cognisant of the Qantas report and outlook statement, its impact on QAN's share price and the fact that globally many airlines share prices have come under pressure in recent times for a range of reasons including the threat of increased competition.

I accept the explanation of the Virgin position at face value so its perhaps best if we concentrate on the issue of whether the investor day presentation contained any material information of which the market wasn't already aware. Leaving out the part cents, based on my observations on the 4 traders website, see link below, consensus market forecast before and after the investor day presentation were for earnings per share as follows:-
Forecast year Before After (This formatted better in my e.mail)
FY 16 56 56
FY17 55 52
FY18 42 38

You can see these consensus forecast changes by clicking on the Consensus and Revisions tabs towards the top of the page in the link below to the 4 traders website.

While it is accepted that consensus market expectation was for a very slight decline in FY17 earnings before the investor day release this was only by 1 cent per share from 56 cps in FY16 to 55 cps in FY17 but after the investor day release these expectations were lowered by a further 3 cps to 52 cps for FY17. I also note FY18 consensus view was lowered by 4 cps and consensus valuation was lowered from $3.26 to $2.82.

The fact that several analysts changed their recommendation rating on AIR stock after the investor day briefing and the fact that the company itself marked the release of same as price sensitive in my opinion is prima facie evidence that the information contained therein was not already totally in the public domain.

It might appear that I am splitting hairs here however whilst it is conceded that these downgraded earnings post investor briefing are not huge in absolute terms in the context of known additional competition forthcoming, in my opinion they are nonetheless real and certainly do leave open the perception that management took advantage of the situation and as you know I am certainly not alone in my view on that.

The main thrust of my effort as expressed before is aimed at the question of is there a better way to handle this sort of thing in the future so that restricted persons are both seen to be acting with 100% integrity and perceived to be ?

I am sure it goes without saying that many shareholders are very disappointed in the present share price of AIR and were shocked earlier this year when Virgin required shareholder support at a time when oil prices are so low. For what it's worth from what I hear most shareholders are looking forward to AIR extricating themselves from their stake in Virgin.

http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/revisions/

Anything else interested parties in this matter want me to bring up with Mr Carter ?

[RTM]

Yes, thanks for taking this on Roger. Appreciated.
RTM

[sb9]

Great work there Roger, well done.

[Biscuit]

Great to see a proactive approach. One small point:

"...... that restricted persons are both seen to be acting with 100% integrity and perceived to be...""seen to be" and "perceived to be" are the same thing. Otherwise good stuff.

[Joshuatree]

Yes ,great stuff Roger. Am looking forward to when the Insto churn dies down and hopefully some retrace in the s/p.

[IAK]

Appreciate your efforts Roger.

[Jay]

Thanks Roger - interesting to hear the outcome of your call

[freddagg]

Anything else interested parties in this matter want me to bring up with Mr Carter ?[/QUOTE]

There is the issue of the cargo settlement Roger.
Obviously it was price sensitive and the executive must have known about it.

[Beagle]

Anything else interested parties in this matter want me to bring up with Mr Carter ?

There is the issue of the cargo settlement Roger.
Obviously it was price sensitive and the executive must have known about it.[/QUOTE]

Agreed, I will definitely raise that issue. I checked and its good that their general counsel involved in the settlement negotiations wasn't one of the sellers. If he had of been we'd have a real mess here.

Thanks for your encouragement folks. Feels good to at least try and make a difference.

[skid]

There is the issue of the cargo settlement Roger.
Obviously it was price sensitive and the executive must have known about it.

Agreed, I will definitely raise that issue. I checked and its good that their general counsel involved in the settlement negotiations wasn't one of the sellers. If he had of been we'd have a real mess here.

Thanks for your encouragement folks. Feels good to at least try and make a difference.[/QUOTE]
************************************************** ************************************
And when do we start getting some travel discounts as share holders:):):)

Also one thing of note that jumped out of the letter(well done Roger) is just how closely have any of us been following the USA airlines?
It appears with institutions over there involved in AIR, it is worth keeping abreast of.

There have been countless companies who consider themselves to high and mightly to communicate with its Share Holders(owners) so this is a feather in their cap in that regard

[Yoda]

Dear Leila,

Thank you for your e.mail and information and for the opportunity to speak with Mr Carter on Thursday 19th 1.15 p.m. (Note she subsequently suggested 1.15p.m. as a better time for Mr Carter)
That time suits fine and I look forward to discussing this matter further with him at that stage. My office number is noted below.

I know the directors and senior managers are extremly busy people so its perhaps helpful in terms of time saving to mention I'm fully cognisant of the Qantas report and outlook statement, its impact on QAN's share price and the fact that globally many airlines share prices have come under pressure in recent times for a range of reasons including the threat of increased competition.

I accept the explanation of the Virgin position at face value so its perhaps best if we concentrate on the issue of whether the investor day presentation contained any material information of which the market wasn't already aware. Leaving out the part cents, based on my observations on the 4 traders website, see link below, consensus market forecast before and after the investor day presentation were for earnings per share as follows:-
Forecast year Before After (This formatted better in my e.mail)
FY 16 56 56
FY17 55 52
FY18 42 38

You can see these consensus forecast changes by clicking on the Consensus and Revisions tabs towards the top of the page in the link below to the 4 traders website.

While it is accepted that consensus market expectation was for a very slight decline in FY17 earnings before the investor day release this was only by 1 cent per share from 56 cps in FY16 to 55 cps in FY17 but after the investor day release these expectations were lowered by a further 3 cps to 52 cps for FY17. I also note FY18 consensus view was lowered by 4 cps and consensus valuation was lowered from $3.26 to $2.82.

The fact that several analysts changed their recommendation rating on AIR stock after the investor day briefing and the fact that the company itself marked the release of same as price sensitive in my opinion is prima facie evidence that the information contained therein was not already totally in the public domain.

It might appear that I am splitting hairs here however whilst it is conceded that these downgraded earnings post investor briefing are not huge in absolute terms in the context of known additional competition forthcoming, in my opinion they are nonetheless real and certainly do leave open the perception that management took advantage of the situation and as you know I am certainly not alone in my view on that.

The main thrust of my effort as expressed before is aimed at the question of is there a better way to handle this sort of thing in the future so that restricted persons are both seen to be acting with 100% integrity and perceived to be ?

I am sure it goes without saying that many shareholders are very disappointed in the present share price of AIR and were shocked earlier this year when Virgin required shareholder support at a time when oil prices are so low. For what it's worth from what I hear most shareholders are looking forward to AIR extricating themselves from their stake in Virgin.

http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/revisions/

Anything else interested parties in this matter want me to bring up with Mr Carter ?

good one Roger , well done, and to everyone else that takes the time to post good stuff here.

Ask them why they have removed ( or not put in...) the foot rests in the new Economy class seats ..... I was very disappointed and after traveling back fro uk the back of my legs were throbbing. With your feet flat on the floor now the risk of DVTs is much higher IMHO in the medical profession. Cut costs, yes but this puts lives at risk. FYI 1:3000 people get DVTs from Long flights . I'll have to take a box next time ..... to put my feet on, hopefully not a coffin box... Recently lost a friend to DVTs after a flight.... Mmmmm

[Yoda]

Do i see a slight turn in the MACD , flattening off?

[Beagle]

good one Roger , well done, and to everyone else that takes the time to post good stuff here.

Ask them why they have removed ( or not put in...) the foot rests in the new Economy class seats ..... I was very disappointed and after traveling back fro uk the back of my legs were throbbing. With your feet flat on the floor now the risk of DVTs is much higher IMHO in the medical profession. Cut costs, yes but this puts lives at risk. FYI 1:3000 people get DVTs from Long flights . I'll have to take a box next time ..... to put my feet on, hopefully not a coffin box... Recently lost a friend to DVTs after a flight.... Mmmmm

DVT a genuine concern for sure but more an operational issue and the footrest issue would make for a good follow-up question for the forthcoming annual meeting I reckon. For reasons I am sure you can appreciate I want to keep the discussion focussed on the main issue with Mr Carter on Thursday.

[workingdad]

Good stuff Roger. As per others question remains on the cargo settlement and with so much $ on the line I would expect they were aware of this a week out.

DVTs are often associated with medical predispositions and flying cops the blame. Simply activating the lower leg muscles to contract is a simple answer to avoid stagnant venous blood flow ;)

Good to see less turnover today and more settled green arrows. Bought back in and hope I timed it better this time.

[Beagle]

Good stuff Roger. As per others question remains on the cargo settlement and with so much $ on the line I would expect they were aware of this a week out.

DVTs are often associated with medical predispositions and flying cops the blame. Simply activating the lower leg muscles to contract is a simple answer to avoid stagnant venous blood flow ;)

Good to see less turnover today and more settled green arrows. Bought back in and hope I timed it better this time.

Absolutely I will express the view that there's a fairly widely held view that senior management would have known that the company was in the process of trying to settle the freight dispute. Whether they would have known the quantum of the possible settlement is another matter and can only be pure speculation on my part.

Realistically without going to the FMA, (which frankly is something I am very reluctant to do after being ignored by them with the SUM complaint), I didn't even get the courtesy of a reply to my formal complaint, I think its highly unlikely he will concede they did anything wrong but perhaps I can ask them as a board to review this whole matter carefully and consider amending their restricted persons trading policy in similar circumstances going forward from here.

One other thing I will also be at pains to point out is that senior management collectively through their incentive scheme including options still to be exercised control or will control approximately 8% of the free market float of AIR shares (About 45m shares outstanding under the incentive scheme as at 30 June 2015) so management actions absolutely do have a significant bearing on the SP especially when being dumped by several mangers contemporaneously.

[Yoda]

Good stuff Roger. As per others question remains on the cargo settlement and with so much $ on the line I would expect they were aware of this a week out.

DVTs are often associated with medical predispositions and flying cops the blame. Simply activating the lower leg muscles to contract is a simple answer to avoid stagnant venous blood flow ;)

Good to see less turnover today and more settled green arrows. Bought back in and hope I timed it better this time.

Sure ,aspirin compression socks, flexing the hammies etc. all good. Fluids , don't sleep.......Flying doesn't cop the blame, its the match that lights the fire due to venous stasis . A foot rest helps. However there has not been a double blinded randomised trial on airlines DVTs and foot rests and i haven't got time to do one. :D

So back to the main point, anybody buying back in yet?

[workingdad]

Sure ,aspirin compression socks, flexing the hammies etc. all good. Fluids , don't sleep.......Flying doesn't cop the blame, its the match that lights the fire due to venous stasis . A foot rest helps. However there has not been a double blinded randomised trial on airlines DVTs and foot rests and i haven't got time to do one. :D

So back to the main point, anybody buying back in yet?

And for every peer reviewed journal article advocating one thing there is another advocating the exact opposite but with medical terms like stasis my guess is you know this also.

How many people per capita basis with DVTs that don't fly?

Bought back at half the holdings I had and a bit sooner than I expected....

[Beagle]

Sure ,aspirin compression socks, flexing the hammies etc. all good. Fluids , don't sleep.......Flying doesn't cop the blame, its the match that lights the fire due to venous stasis . A foot rest helps. However there has not been a double blinded randomised trial on airlines DVTs and foot rests and i haven't got time to do one. :D

So back to the main point, anybody buying back in yet?

Not buying yet but my gut-o-meter tells me we are close to the bottom of this violent downdraft...better be over soon as I have run out of sick bags near my seat and I'm pretty sure there's none left in the other aisles either :) Anything is possible in the short term though but on the other hand my gut says they'll probably resolve the Virgin matter sometime in the next few months which all other things being equal should lead to calmer flying conditions at a higher altitude. My guess is the TA people would advise us to wait until there's a definite new support confirmed and new uptrend established but while waiting they could easily announce a positive VAH resolution any day...bit like being at the casino really isn't it. Disc: Presently hold only a very modest stake.

[Raz]

http://www.stuff.co.nz/business/opinion-analysis/80052362/cas-carter-there-is-plenty-of-room-at-the-nz-summer-inn

Although an opinion piece, when reading it, does it convince you we will be able to keep tourism growth at 10% pa?

[Jantar]

...
Ask them why they have removed ( or not put in...) the foot rests in the new Economy class seats ..... I was very disappointed and after traveling back fro uk the back of my legs were throbbing. .....
I am just the opposite. I have fairly long legs, and I am pleased that the foot rests have been removed. Much more leg room to stretch out a bit.

[blackcap]

I am just the opposite. I have fairly long legs, and I am pleased that the foot rests have been removed. Much more leg room to stretch out a bit.

Ditto on that one. I always hated that the footrests got in the way of being able to stretch out the legs. That said, I normally take an aisle seat and go walkabout quite a lot so the DVT is not an issue as far as I am concerned.

[Joshuatree]

Int development. Google RPT-UPDATE1-Eight Asian budget carriers share booking platforms in landmark pact

Includes Virgin Aus's Tiger Airways Aust

[winner69]

Why $3 will never be a sustainable price for AIR

Insight 1: The top 10 or so shareholders are the ones who influence medium to long term price movements. Traders create the short term noise - the day to day ups and downs.

Insight 2: In the NBR article somebody posted last week it mentioned one analyst who pointed out that airlines are a volatile industry where share price appreciation was relatively rare - and suggesting you couldn't begrudge anybody (including management) selling out when the price appears to be at a cyclical high. Those that do so have an appreciation of how cyclical stocks (esp airlines) behave

Insight 3: While walking around Lake Hayes the other day had a chat with a retired fund manager. He made the point that when the government sold a lot at $1.65 the price was probably a bit on the light side but not by much. He went on to say that Air NZ future strategy and pans were well known at that time and these were implicitly priced in to the $1.65 they got. All thats changed since is cheaper fuel which has lead to more competition but net net positive for Air NZ, but not a long term positive meaning that about $1.80 to $2.00 is about the 'right price' today.
He knew of some funds/instos who bought at the $1.65 and have cashed in at the high recent prices. His sage advice was 'winner, airline stocks can be very rewarding but only buy at the bottom of the inevitable cycle and never never buy near the top' (short term trading doesn't count)

So 1 and 2 and 3 together says that AIr NZ share price is heading down to a cyclical low over the next year or so but short term 'traders' will create some dips and spikes upward (we may even see $3 again). It does seem that airline stocks are a different beast than other stocks and medium to long term the price is driven by the sentiment of the larger shareholders (government excluded)

I only been interested in airline stocks recently after ignoring them for decades. I now see why not a good long term investment .....but heck you can have fun doing short term trading (unless caught out holding the day the plane crashes)77

[h2so4]

Why $3 will never be a sustainable price for AIR

Insight 1: The top 10 or so shareholders are the ones who influence medium to long term price movements. Traders create the short term noise - the day to day ups and downs.

Insight 2: In the NBR article somebody posted last week it mentioned one analyst who pointed out that airlines are a volatile industry where share price appreciation was relatively rare - and suggesting you couldn't begrudge anybody (including management) selling out when the price appears to be at a cyclical high. Those that do so have an appreciation of how cyclical stocks (esp airlines) behave

Insight 3: While walking around Lake Hayes the other day had a chat with a retired fund manager. He made the point that when the government sold a lot at $1.65 the price was probably a bit on the light side but not by much. He went on to say that Air NZ future strategy and pans were well known at that time and these were implicitly priced in to the $1.65 they got. All thats changed since is cheaper fuel which has lead to more competition but net net positive for Air NZ, but not a long term positive meaning that about $1.80 to $2.00 is about the 'right price' today.
He knew of some funds/instos who bought at the $1.65 and have cashed in at the high recent prices. His sage advice was 'winner, airline stocks can be very rewarding but only buy at the bottom of the inevitable cycle and never never buy near the top' (short term trading doesn't count)

So 1 and 2 and 3 together says that AIr NZ share price is heading down to a cyclical low over the next year or so but short term 'traders' will create some dips and spikes upward (we may even see $3 again). It does seem that airline stocks are a different beast than other stocks and medium to long term the price is driven by the sentiment of the larger shareholders (government excluded)

I only been interested in airline stocks recently after ignoring them for decades. I now see why not a good long term investment .....but heck you can have fun doing short term trading (unless caught out holding the day the plane crashes)77

Insights 1 and 2 says it for me and with professional accountants throwing up all over the forum it's not wonder I have been uncomfortable holding AIR.

I have been in balls deep (technical term) for a period of 18 months and the only way I have managed a satisfactory return is by trading plus dividends.

I have a complete lack of confidence in any sort of predictability with AIR.
That does not suit this investor.

So for those reasons I'm out and have been for a while.

[winner69]

Insights 1 and 2 says it for me and with professional accountants throwing up all over the forum it's not wonder I have been uncomfortable holding AIR.

I have been in balls deep (technical term) for a period of 18 months and the only way I have managed a satisfactory return is by trading plus dividends.

I have a complete lack of confidence in any sort of predictability with AIR.
That does not suit this investor.

So for those reasons I'm out and have been for a while.

That's how cyclicals, esp airlines, work

Talking of predictability - that unnamed analyst in the NBR story about AIR posted said “I don’t think this management team or any airline management have a strong ability to forecast the future,”

[mikeybycrikey]

That's how cyclicals, esp airlines, work

Talking of predictability - that unnamed analyst in the NBR story about AIR posted said “I don’t think this management team or any airline management have a strong ability to forecast the future,”

Ouch!

That does seem to be the way with airlines: either the oil price is too high or there is too much competition. We've just transitioned from one of those states to the other, causing a brief interlude of profit.

[Biscuit]

I only been interested in airline stocks recently after ignoring them for decades. I now see why not a good long term investment .....

Yes, unless you're a trader you're better off holding growth companies, like Ryman, than cyclicals - at least this far from the bottom of the cycle

[Joshuatree]

Int development. Google RPT-UPDATE1-Eight Asian budget carriers share booking platforms in landmark pact

Includes Virgin Aus's Tiger Airways AustThe goal, instead, is to bring together smaller airlines as an alternative to the AirAsia and Jetstar branded groups across the region, according to people in the industry.In a single transaction, travellers can select seats, meals and baggage allowances across the websites.
But the cooperation will not be as extensive as full-service partnerships such as Star Alliance, Oneworld and SkyTeam. Those programmes feature extensive codes haring agreements, access to a network of waiting lounges and the ability to redeem points on partner flights.
Deeper partnerships including cooperation across frequent flyer programmes, joint sales and marketing, and coordination on network and prices requires regulatory approval, and are not on the cards, Wilson said.
Asian budget carriers are looking to take advantage of a travel boom in the region, placing orders for several hundred aircraft from Airbus Group SE and Boeing Co.
Boeing's 2015 global market outlook showed Asian low-cost carriers generated average annual growth of 24.5 percent over the previous decade. By comparison, European peers grew 13.4 percent.
The U.S. planemaker also forecast 100 million new passengers entering the Asian market annually for the foreseeable future, creating demand in the next 20 years for 10,370 single-aisle planes such as Boeing's 737 and Airbus' A320. (Reporting by Siva Govindasamy;

[janner]

That's how cyclicals, esp airlines, work

Talking of predictability - that unnamed analyst in the NBR story about AIR posted said “I don’t think this management team or any airline management have a strong ability to forecast the future,”

Must agree with the analyst.

Reported that Emirates was a dubious one third full HK to Dubai .. on 9/05/16

I now see Emirates offering NZ to Singapore for $390 RETURN..

Is AIR going to match that ???

Disc. Not a holder.

[blackcap]

I now see Emirates offering NZ to Singapore for $390 RETURN..


Disc. Not a holder.

Where did you find that? I can only get $1200 return. My partner is looking at visiting friends there and would welcome a heads up :)

But if Emirates are 1/3 full and looking to discount... cannot help AIR much.
Was impressed with AIR when I did fly them last on my Europe return. So much better than KLM on the Schiphol legs, better service, better plane, just more pleasant all round experience. Wonder what the cost is of having a newer fleet and if an older fleet (like the KLM one) actually saves the airline money or not?

[Snow Leopard]

...I now see Emirates offering NZ to Singapore for $390 RETURN...

What dates and how do you book them? I would be seriously interested.

Best Wishes
Paper Tiger

[janner]

Unable to open my Slingshot account

Captcha .. Never can get that to work..

It was on WEBJET ..

Will confirm when Slingshot lets me back in..

[Snow Leopard]

Unable to open my Slingshot account

Captcha .. Never can get that to work..

It was on WEBJET ..

Will confirm when Slingshot lets me back in..

Well the cheapest I can find on Webjet is for Mid June at $398 each way via Shanghai with China Eastern, with a 9h layover (05:55 - 14:45) out :( and a 19h (04:55 - 00:20) layover coming back.

But 19h would be OK, they will give you a free transit visa.

You could have an early breakkie at the airport, then ride the Maglev (starts at 7am, if you can wait till 9am you can have a 430km/h ride as opposed to the slow 300km/h normal ride) and then the Metro into the city.
Walk the Bund, go up one of their tall towers, museums, lots of possibilities.
I can also recommend a few restaurants for you.

You will have to take a taxi back to the airport for your 00:20 departure and then you can have a nice sleep on the flight to AKL.

Webjet says AIR is $2,437 out, $3,330 back, but AIR website says $859 & $799 so maybe Webjet not totally reliable?

Best Wishes
Paper Tiger

Disclaimer ad nauseam : Don't hold AIR.

[janner]

Well the cheapest I can find on Webjet is for Mid June at $398 each way via Shanghai with China Eastern, with a 9h layover (05:55 - 14:45) out :( and a 19h (04:55 - 00:20) layover coming back.

But 19h would be OK, they will give you a free transit visa.

You could have an early breakkie at the airport, then ride the Maglev (starts at 7am, if you can wait till 9am you can have a 430km/h ride as opposed to the slow 300km/h normal ride) and then the Metro into the city.
Walk the Bund, go up one of their tall towers, museums, lots of possibilities.
I can also recommend a few restaurants for you.

You will have to take a taxi back to the airport for your 00:20 departure and then you can have a nice sleep on the flight to AKL.

Webjet says AIR is $2,437 out, $3,330 back, but AIR website says $859 & $799 so maybe Webjet not totally reliable?

Best Wishes
Paper Tiger

Disclaimer ad nauseam : Don't hold AIR.

This is all I get from Slingshot

Oops! We're currently experiencing technical difficulties, please try again later.
Homepage

So unable to confirm..
Will do so ASAP..

Not think about travelling . Will be here for quite a few months..

[Raz]

Insights 1 and 2 says it for me and with professional accountants throwing up all over the forum it's not wonder I have been uncomfortable holding AIR.

I have been in balls deep (technical term) for a period of 18 months and the only way I have managed a satisfactory return is by trading plus dividends.

I have a complete lack of confidence in any sort of predictability with AIR.
That does not suit this investor.

So for those reasons I'm out and have been for a while.

Totally agree..and your not alone...trading has been the only way for an effective return over the past twelve months and now it requires even more effort and monitoring in the current environment to hope to achieve that return, so for me, who values my time, it doesn't add up.

Had 350,000 share a couple of months ago which I sold out in the 2.95-3.02 range and now sitting with only 20,000 which i have recently purchased. I think point 1 is important - it reminds me we have more potential shaking out of the Inst. who bought really low... so now wondering if we have bottomed out.

[Beagle]

Insights 1 and 2 says it for me and with professional accountants throwing up all over the forum it's not wonder I have been uncomfortable holding AIR.

I have been in balls deep (technical term) for a period of 18 months and the only way I have managed a satisfactory return is by trading plus dividends.

I have a complete lack of confidence in any sort of predictability with AIR.
That does not suit this investor.

So for those reasons I'm out and have been for a while.

Its only natural that when the SP declines people will be looking for someone to blame, I guess that's the flip side, the ugly side of human nature.

Many are happy when I'm expending heaps of unpaid hours trying to improve the companies restricted persons insider trading policies for everyone's benifet but if I think they're good buying in the mid - late $2 range, (goes without saying they were better buying in late 2014 at $2 when I am very enthusiastic and bought up large), and the price comes back from there its my fault...go figure...

I get PM's and e.mails from time to time, (as I am sure many other regular contributors do), thanking me for my insights and posts when SP's of companies go up but its not unexpected that none arrive when the SP goes down.

If anyone's interested I remain confident AIR can earn an average across the cycle of 30 cps with their expanded modern fleet and when the dust settles and AIR extricate themselves from VAH I remain of the view that SP will more accurately reflect the underlying value of the business. I remain of the view that the consensus analyst valuation at $2.82 is conservative.

(Not to be considered professional advice DYOR "mate").

[skid]

Its only natural that when the SP declines people will be looking for someone to blame, I guess that's the flip side, the ugly side of human nature.

Many are happy when I'm expending heaps of unpaid hours trying to improve the companies restricted persons insider trading policies for everyone's benifet but if I think they're good buying in the mid - late $2 range, (goes without saying they were better buying in late 2014 at $2 when I am very enthusiastic and bought up large), and the price comes back from there its my fault...go figure...

I get PM's and e.mails from time to time, (as I am sure many other regular contributors do), thanking me for my insights and posts when SP's of companies go up but its not unexpected that none arrive when the SP goes down.

If anyone's interested I remain confident AIR can earn an average across the cycle of 30 cps with their expanded modern fleet and when the dust settles and AIR extricate themselves from VAH I remain of the view that SP will more accurately reflect the underlying value of the business. I remain of the view that the consensus analyst valuation at $2.82 is conservative.

(Not to be considered professional advice DYOR "mate").

Your the king Roger in terms of the numbers(you've obviously got that covered) and the time is appreciated--but lets not forget the other factors at work here.
It was pretty plain in your letter that foreign institutions have had an affect on things and airlines in the US have also had good numbers but have dropped (which may have influenced these institutions.
Many believe oil will stay at reasonable levels and US airlines will turn back upward--(well ,the debate I saw 1 for -1 against--but the one for a turn for the better,had the last word if that means anything.)
This is something pretty influential that most of us have missed,so rather than place blame,perhaps its just a case that your hard work gave us an excellent picture of part of the equation---FA is a complicated beast.
I have said before that although nothing is certain ,the longer we go along this path ,the greater the odds must be of a bottom. Even Hoop with his fibs was tempted.
With the summer travel season coming up in the States lets hope US airlines improve and we get some of the benefit.

[Beagle]

Thanks for your vote of confidence Skid but I can't accept the king title, just have a love of aviation, like crunching numbers and like doing my best to understand it and like trying to make a difference for the benefit of others. When you put yourself out there I suppose its only natural that some people will take pot shots and you'll make both friends and enemies. Vince once told me, not everyone is going to like you, its a public forum, that's just the reality of how it is and of course he's absolutely right. That said there shouldn't need to be snide thinly disguised contemptuous remarks made on a public forum or overt non disguised ones for that matter either.

I keep an eye on the fundamentals of the U.S. Carriers and there's plenty of pressure on them from competition and yet the fundamental's AIR trade on compared to say Delta or American airlines makes AIR look like a screaming bargain, also by comparison to QAN. Everyone is down in the mouth with sentiment at the moment, annoyed with the company having to support VAH and then the back-flip of wanting to sell and the management selling hasn't helped either. Then there's a raft of new competition coming and everyone seems to be focused on that rather that the actual operating stat's themselves and seems to forget any positive influences, like AIR expanding into new routes. "Its always darkest before the dawn" that old cliché probably says it best.

[Nasi Goreng]

While there were risks when the share price was around $3, you could see a case for $3 being fair value. So when we look at the price today being sub $2.30, you have to ask if the recent news is really worth the $800M which has been wiped off the market cap in the space of 5 weeks.

It looks like fear of competitive environment is driving down expectations of prices and profitability. Its AIR's job to fight this battle with competitors but its not uncommon for market and media to make this sound like its bigger than what it is.

While Competition is something most people get scared of, a worse situation is a decrease in demand or over supply. Something that isn't even on the horizon here with tourist numbers up 7% year on year and no slow down on the horizon. The other thing to consider is that while it may get more competitive in the international flights arena, Air NZ have a moat around their business in NZ with the infrastructure to cater for all those travelers. It might be easy to introduce a new route from Asia to NZ but its been proven over and over again its hard to compete with Air NZ domestically.

We are also in a completely different market to what we have had in the last few decades. Bank deposits don't quite get the return they once did so at these levels with the potential for imputed dividends in excess of 10% and a business that is not likely to stop performing any time soon, its looking like a good entry opportunity here.

Technically, it does look a bit ugly right now. There was a death cross a few days ago which is normally a sell signal but I think in this case, the price has fallen so fast that it took some time for the averages to catch up with the steep price decline. If you look at downside risk, I don't see a big risk of this falling below $2 and we may be forming a base right now but there is opportunity for it to find a footing and start to climb back to $2.60-2.80.

As in all cases, DYOR and don't rely on what I or anyone else here is saying.

[Raz]

Its only natural that when the SP declines people will be looking for someone to blame, I guess that's the flip side, the ugly side of human nature.

Many are happy when I'm expending heaps of unpaid hours trying to improve the companies restricted persons insider trading policies for everyone's benifet but if I think they're good buying in the mid - late $2 range, (goes without saying they were better buying in late 2014 at $2 when I am very enthusiastic and bought up large), and the price comes back from there its my fault...go figure...

I get PM's and e.mails from time to time, (as I am sure many other regular contributors do), thanking me for my insights and posts when SP's of companies go up but its not unexpected that none arrive when the SP goes down.

If anyone's interested I remain confident AIR can earn an average across the cycle of 30 cps with their expanded modern fleet and when the dust settles and AIR extricate themselves from VAH I remain of the view that SP will more accurately reflect the underlying value of the business. I remain of the view that the consensus analyst valuation at $2.82 is conservative.

(Not to be considered professional advice DYOR "mate").

You thoughts are always valued, I had not considered that message was directed at you...you sure it is?

[Beagle]

You thoughts are always valued, I had not considered that message was directed at you...you sure it is?

Thanks Raz. How many other accountants do you know with a keen interest in AIR that post regularly ?

Nice post N.G.

[h2so4]

Thanks Raz. How many other accountants do you know with a keen interest in AIR that post regularly ?

Nice post N.G.

Nooooo! Your at the wrong end of the stick.

Never mind. Thanks for your post mate.

[Biscuit]

Thanks Raz. How many other accountants do you know with a keen interest in AIR that post regularly ?

Nice post N.G.

I think most people on here value your posts Roger. Your enthusiasm is likely to lead some, who don't do their own thinking, to disappointment, but that is their failing not yours.

[garfy]

I have appreciated your comments on AIR thread, as well as others, and find your nonjudgmental observations and opinions most valuable. Many thanks. G.

[vin]

Thanks Raz. How many other accountants do you know with a keen interest in AIR that post regularly ?

Nice post N.G.

Really appreciate your posts Roger, AIR thread wouldn't be the same without you. Cheers

[Joshuatree]

There is some great research and analysis on here from Roger and others AIR wouldn't be the same or held to account without it. If i sniff any over enthusiastic"promoting" up or down ramping or influencing attempts rather than opinions which I value, for and against, then respond i must. Hopefully most people don't mean to overdo it and stray ; keeping a moat between this forum and that other Hot one where anything goes is the point of difference in this forum which i value and is worth fighting for .

[OldGuy]

well its a shame that you appear to be one of the most inflammatory posters on here, Joshuatree...

[skid]

OK guys..break it up..:)

Just as a sidebar--has anyone confirmed that that Emirates ''to good to be true'' flight was a misprint--id be willing to bet that no one would be that ruthless in a price war.

[Biscuit]

well its a shame that you appear to be one of the most inflammatory posters on here, Joshuatree...

That seems an unnecessarily inflammatory post? Room for all views eh? Roger has never held back from expressing his opinions on "naysayers" etc and it is all part of a good debate.

[Beagle]

Maybe I got the wrong end of the stick earlier, suggest we all move on and get back to debating the company and its merits. I am busy today preparing for my discussion with T.C. I am presently leaning towards continuing the debate afterwards with their general counsel who is probably best placed to understand the intricate nuances of this matter has written what I consider to be an excellent Securities Trading and Disclosure policy statement for staff that runs to 13 pages. SIGH...We just need them to stick to it.

The debate will centre on whether the information contained within the investor day briefing was material or not and whether senior management knew when they were selling that the company was in the process of settling the freight dispute. Should there be a black out period shortly before the presentation of future investor day briefings ?...that is the $64,000 question. None of you will be surprised that I have a very firm view on this :)

[Biscuit]

Well OG is entitled to his opinion like anybody else, and actually I agree with it.

Sure I agree he is, I just don't see the point of expressing it. JT posted contrary opinions at a time when this thread appeared quite unbalance in promoting the upside of AIR and his view was worth considering.

[pierre]

Sure I agree he is, I just don't see the point of expressing it. JT posted contrary opinions at a time when this thread appeared quite unbalance in promoting the upside of AIR and his view was worth considering.

I think it will probably pay for everyone to read the "Announcement" from STMOD at the top of the NZX forum. He says he's mostly harmless but, having had reprimand from him myself a while back, I'm not so sure about that.

Nothing wrong with opinions - we just need to keep personalities out of the mix.

[Biscuit]

Nothing wrong with opinions - we just need to keep personalities out of the mix.

Agreed, my opinion is that AIR is probably ripe for a rebound if you are a trader and is in the wrong part of its cycle for a buy-and-hold

[couta1]

Agreed, my opinion is that AIR is probably ripe for a rebound if you are a trader and is in the wrong part of its cycle for a buy-and-hold Unless you have already bought as a hold a while back(At a higher price), in which case it doesn't matter what part of the cycle we are currently in, you just hold, and why not buy in now as a hold at these bargin prices?

[vin]

Yeah, I caught the falling knife far too early, sold out my holding at over $3, bought back in at $2.70, ouch. If I had funds available I would probably top up. Just gonna hold this one out I guess, can't afford to make a loss.

[couta1]

Yeah, I caught the falling knife far too early, sold out my holding at over $3, bought back in at $2.70, ouch. If I had funds available I would probably top up. Just gonna hold this one out I guess, can't afford to make a loss. $2.75 for me, agree on the topping up, you don't need to make a loss, just sit tight and collect the divvy.

[oldtech]

Agreed, my opinion is that AIR is probably ripe for a rebound if you are a trader and is in the wrong part of its cycle for a buy-and-hold

Biscuit, as I am quite new to actively investing in shares and still have a lot to learn, could you please explain why you think AIR is not suitable for buy-and-hold at the moment?

[Joshuatree]

Maybe I got the wrong end of the stick earlier, suggest we all move on and get back to debating the company and its merits. I am busy today preparing for my discussion with T.C. I am presently leaning towards continuing the debate afterwards with their general counsel who is probably best placed to understand the intricate nuances of this matter has written what I consider to be an excellent Securities Trading and Disclosure policy statement for staff that runs to 13 pages. SIGH...We just need them to stick to it.

The debate will centre on whether the information contained within the investor day briefing was material or not and whether senior management knew when they were selling that the company was in the process of settling the freight dispute. Should there be a black out period shortly before the presentation of future investor day briefings ?...that is the $64,000 question. None of you will be surprised that I have a very firm view on this :)

Awesome Roger; stick it to them.:)

[Biscuit]

I bought in around $1.20 and sold about half around $2.70 odd. I still hold the other half and am unlikely to sell this time around as its a well run company that I use quite a bit, making heaps of money in an area that is still growing. I personally wouldn't buy now as I prefer to buy when sentiment is clearly negative with a reasonable chance of changing to the positive. As I've said before on this thread when the sp was well positioned around $3, airlines generally are unprofitable and when airlines are profitable they expand and when the next contraction occurs in the market they are squeezed. They are cyclical companies. Once the talk is about big profits in the industry, its time to reach for your parachute. That's just my view, don't take my advice as I am often wrong.

[heisenberg]

I don't hold AIR but am waiting to see how long until this downtrend turns the corner...

[oldtech]

Gotcha, thanks :)

[Beagle]

Spent all day on this and reviewed all material and previous correspondence including a full review of their securities trading policy, (13 pages) and due consideration of what's material information and what isn't.

Spoke with Tony Carter - After the usual pleasantries A fairly robust debate and exchange of views was expressed:-

His View - The information contained in the investor day presentation was broadly neutral in terms of its nature and nothing material in there that wasn't already in the market place.
SP on the day of the presentation went up.

My view - The market takes time to digest the information and several analysts downgraded shortly afterwards and the SP performance over the following few days is more relevant, down 10%

His view - Management and directors are very surprised by the SP decline and its certainly not reflective of the current operating environment and strong cash flow.
He conceded that the optics of this matter weren't the best and he could see my point of view. He went on to say he was just as concerned about the reputation risk as the legal one after I explained that it is easy for investors to perceive that management have taken advantage

He went on to explain that there has been significant black out periods this year that are additional to those normally encountered and specifically they related to the VAH matter and in and around the time of the announcement that their stake was under review. In effect he said for all of January February and March 2016 executives have been restricted from dealing in shares.

After reviewing all management share sales this morning and timing thereof the two executive sales that most concern me are those in a tight timeframe in the five trading days up to the investor day briefing.
Steven Jones Chief Strategy Net work and Alliances officer sales 26,27 & 28 April, in total 314,135 shares and David Morgan, (I think his title is chief pilot something or other) 350,000 shares 2 May 2016 the day before the briefing.

Agreed that Steve Jones was involved with the briefing but David Morgan not. At issue, and in compliance with their security trading policy is that executives can request approval to trade and such approval is then valid for 30 trading days so as to give the executive some freedom on their ability to optimise the timing of their transaction...they are after all their shares.
He suggested the timing of the sales was simply unfortunate. I scanned my desk for a Tui...surely there's one on hand.

Tony explained that it is not them that make the call on whether an information release is price sensitive or not, that's the NZX's call and they simply whack a "P" symbol denoting price sensitive on it as they see fit.

I went on to explain my position on the matter as fully articulated in my original communications which you can see earlier in the thread, namely what's the point of having an investor day presentation if you believe all the information contained therein is already known to the market and if it was all already known to the market why did we see significant analyst downgrades afterwards followed by significant a significant SP decline in the four trading days afterwards ?

He again conceded they had been taken by surprise by the extent of the fall and conceded it the optics weren't all that good.

I outlined what had happened with Mrs Barlow and Summerset and how they had worked with interested parties and amended their securities trading policy to include a black out period of two weeks prior to the quarterly sales metrics and went on to ask if they would consider amending their security trading policy along similar lines prior to any future investor day briefing. He suggested it could be construed that AIR's monthly operating stat's were of a nature to be not materially dissimilar to SUM's quarterly ones and should we have a blackout period prior to release of each month's stat's ? While a good idea in a practical sense because of the regular nature of same I suggested this wasn't practical in that one month's operating stat's were unlikely to contain information that was as substantive as a full quarter's results like Summerset. He quipped that if Steven Jones CEO of QAN had of sold a whole bunch of shares just before their latest monthly operating stat's it wouldn't have been a good look. I took heart form this that he is taking this matter seriously.

He has agreed to review the matter again and take it under advisement in terms of whether they have a formal black out period prior to their next investor day briefing. The last one was two years ago.
I asked were these restricted to analysts and institutions and he said he's get back to me on their policy as he wasn't sure if larger retail holders might be allowed to attend, he noted that FPH had that policy around their briefings.

Summary - I think they are committed to maintaining a high standard of corporate behaviour. I think they have slipped here but I take heart from his undertaking to review this matter in detail with a view to possibly amending their security trading policy in the future.

I will follow him up about progress at the next annual meeting.

We had a brief discussion about the share price and he shared some personal thoughts I will keep to myself (nothing price sensitive and nothing in breech of insider trading policy)...trust me I did ask how the sale process going with VAH...nice try he said :) Technically I will concede this still looks truly awful, fundamentally I think the company is in good shape and I get an inkling that they are progressing the sale of VAH with all due haste and diligence, (nothing was specifically said). I think we are close to the bottom so I increased my stake earlier this afternoon. (DYOR and this is not to be considered professional advice or a recommendation)

Sorry he had very limited time and we didn't discuss the freight settlement matter so you'll need to decide for yourself if you think the two executives noted above who sold fairly close to the 9th may stock exchange release about that would have been cognisant of the likely quantum of any possible settlement. Upon reflection this morning, given they weren't involved in the mediation process I didn't see this as a top priority for debate.

As I said earlier I will stay on his case at the annual meeting and follow Tony Carter up regarding updated an improved security trading policy. I note their April 2016 policy that investor relations e.mailed me is version 3 so there's no reason they can't have a version 4 with improvements, a view I believe I expressed in a robust manner.

[OldGuy]

wow, scolded by the mods for one very minor remark. Time to delete again.

Bye.

[skid]

Unless you have already bought as a hold a while back(At a higher price), in which case it doesn't matter what part of the cycle we are currently in, you just hold, and why not buy in now as a hold at these bargin prices?

You do see the irony in that statement eh? Im not disagreeing with your strategy but ,buying in at a cheaper price is not so different than selling --averaging down is alot more of an ''active''move than just buy and hold--youve gone from the ''hold''(in buy-hold -sell) to ''buy''

I guess its a bit of a grey area since you havent reduced your holding,youve increased it--but Im not so sure you can use the ''doesnt matter'' reasoning as it clearly does matter or you wouldnt be topping up.

Having said that Id like nothing better than to see it all work out (like Xero):)

[skid]

Spent all day on this and reviewed all material and previous correspondence including a full review of their securities trading policy, (13 pages) and due consideration of what's material information and what isn't.

Spoke with Tony Carter - After the usual pleasantries A fairly robust debate and exchange of views was expressed:-

His View - The information contained in the investor day presentation was broadly neutral in terms of its nature and nothing material in there that wasn't already in the market place.
SP on the day of the presentation went up.

My view - The market takes time to digest the information and several analysts downgraded shortly afterwards and the SP performance over the following few days is more relevant, down 10%

His view - Management and directors are very surprised by the SP decline and its certainly not reflective of the current operating environment and strong cash flow.
He conceded that the optics of this matter weren't the best and he could see my point of view. He went on to say he was just as concerned about the reputation risk as the legal one after I explained that it is easy for investors to perceive that management have taken advantage

He went on to explain that there has been significant black out periods this year that are additional to those normally encountered and specifically they related to the VAH matter and in and around the time of the announcement that their stake was under review. In effect he said for all of January February and March 2016 executives have been restricted from dealing in shares.

After reviewing all management share sales this morning and timing thereof the two executive sales that most concern me are those in a tight timeframe in the five trading days up to the investor day briefing.
Steven Jones Chief Strategy Net work and Alliances officer sales 26,27 & 28 April, in total 314,135 shares and David Morgan, (I think his title is chief pilot something or other) 350,000 shares 2 May 2016 the day before the briefing.

Agreed that Steve Jones was involved with the briefing but David Morgan not. At issue, and in compliance with their security trading policy is that executives can request approval to trade and such approval is then valid for 30 trading days so as to give the executive some freedom on their ability to optimise the timing of their transaction...they are after all their shares.
He suggested the timing of the sales was simply unfortunate. I scanned my desk for a Tui...surely there's one on hand.

Tony explained that it is not them that make the call on whether an information release is price sensitive or not, that's the NZX's call and they simply whack a "P" symbol denoting price sensitive on it as they see fit.

I went on to explain my position on the matter as fully articulated in my original communications which you can see earlier in the thread, namely what's the point of having an investor day presentation if you believe all the information contained therein is already known to the market and if it was all already known to the market why did we see significant analyst downgrades afterwards followed by significant a significant SP decline in the four trading days afterwards ?

He again conceded they had been taken by surprise by the extent of the fall and conceded it the optics weren't all that good.

I outlined what had happened with Mrs Barlow and Summerset and how they had worked with interested parties and amended their securities trading policy to include a black out period of two weeks prior to the quarterly sales metrics and went on to ask if they would consider amending their security trading policy along similar lines prior to any future investor day briefing. He suggested it could be construed that AIR's monthly operating stat's were of a nature to be not materially dissimilar to SUM's quarterly ones and should we have a blackout period prior to release of each month's stat's ? While a good idea in a practical sense because of the regular nature of same I suggested this wasn't practical in that one month's operating stat's were unlikely to contain information that was as substantive as a full quarter's results like Summerset. He quipped that if Steven Jones CEO of QAN had of sold a whole bunch of shares just before their latest monthly operating stat's it wouldn't have been a good look. I took heart form this that he is taking this matter seriously.

He has agreed to review the matter again and take it under advisement in terms of whether they have a formal black out period prior to their next investor day briefing. The last one was two years ago.
I asked were these restricted to analysts and institutions and he said he's get back to me on their policy as he wasn't sure if larger retail holders might be allowed to attend, he noted that FPH had that policy around their briefings.

Summary - I think they are committed to maintaining a high standard of corporate behaviour. I think they have slipped here but I take heart from his undertaking to review this matter in detail with a view to possibly amending their security trading policy in the future.

I will follow him up about progress at the next annual meeting.

We had a brief discussion about the share price and he shared some personal thoughts I will keep to myself (nothing price sensitive and nothing in breech of insider trading policy)...trust me I did ask how the sale process going with VAH...nice try he said :) Technically I will concede this still looks truly awful, fundamentally I think the company is in good shape and I get an inkling that they are progressing the sale of VAH with all due haste and diligence, (nothing was specifically said). I think we are close to the bottom so I increased my stake earlier this afternoon. (DYOR and this is not to be considered professional advice or a recommendation)

Sorry he had very limited time and we didn't discuss the freight settlement matter so you'll need to decide for yourself if you think the two executives noted above who sold fairly close to the 9th may stock exchange release about that would have been cognisant of the likely quantum of any possible settlement. Upon reflection this morning, given they weren't involved in the mediation process I didn't see this as a top priority for debate.

As I said earlier I will stay on his case at the annual meeting and follow Tony Carter up regarding updated an improved security trading policy. I note their April 2016 policy that investor relations e.mailed me is version 3 so there's no reason they can't have a version 4 with improvements, a view I believe I expressed in a robust manner.

I personally think it has become one of those ''dang ,i didnt realize it was going to have THAT much of an affect'' things in terms of management selling--Id be pretty surprised if there was much more of that.

[sharp]

EgyptAir flight missing enroute to Cairo from Paris

http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=11641360

Hold on tight... for another roller coaster ride.

[Beagle]

Subsequently had it confirmed to me by investor relations that investor days are for institutions and analysts...that explains why even large retail holders like my friend Couta1 didn't get an invite. They feel the annual meeting is the appropriate venue for retail holders with the full board present and extended time for Q & A. Time for a Tui...I would have thought all the top 100 shareholders should get an invite i.e. anyone with over 100,000 shares.

[Raz]

Subsequently had it confirmed to me by investor relations that investor days are for institutions and analysts...that explains why even large retail holders like my friend Couta1 didn't get an invite. They feel the annual meeting is the appropriate venue for retail holders with the full board present and extended time for Q & A. Time for a Tui...I would have thought all the top 100 shareholders should get an invite i.e. anyone with over 100,000 shares. I agree, it clear which stakeholders matter.

[Raz]

The funny thing is in the US, you would have to prove due process is complied with to the SEC, the onus would be on the company and individuals,

[macduffy]

Time to re-name that department - "BIG Investor relations"!

;)

[Snow Leopard]

Here is something that continually baffles me.

E.g. Auckland to London 15-Jun-16, return 29-Jun-16 (but the results are typical of most dates).

Cheapest options:
via Air New Zealand website:
out AIR/Cathay $1,393 (26h 20m)
rtn Virgin/Cathay $1,640 (26h 30m)
Total $3,033.00

(1 stop Hong Kong both ways)

via Lufthansa website:
out Cathay/Luft/Luft $992.87 (28h 55m)
rtn Luft/Luft/AIR $1350.50 (29h 20m)
Total $2,342.97

(2 stop Frankfurt/Hong Kong both ways)

Both AIR & Lufthansa are both Star Alliance (whilst Virgin & Cathay are not)

Not only but also.
There are also pure Cathay/AIR options which are more than $500 cheaper if booked via Cathay than AIR.


Best Wishes
Paper Tiger

[WingingIt]

Here is something that continually baffles me.

E.g. Auckland to London 15-Jun-16, return 29-Jun-16 (but the results are typical of most dates).

Cheapest options:
via Air New Zealand website:
out AIR/Cathay $1,393 (26h 20m)
rtn Virgin/Cathay $1,640 (26h 30m)
Total $3,033.00

(1 stop Hong Kong both ways)

via Lufthansa website:
out Cathay/Luft/Luft $992.87 (28h 55m)
rtn Luft/Luft/AIR $1350.50 (29h 20m)
Total $2,342.97

(2 stop Frankfurt/Hong Kong both ways)

Both AIR & Lufthansa are both Star Alliance (whilst Virgin & Cathay are not)

Not only but also.
There are also pure Cathay/AIR options which are more than $500 cheaper if booked via Cathay than AIR.


Best Wishes
Paper Tiger

Here's another good one.

SYD-AKL 20/November 945am, 1030am 650pm all $377 the works on air nz website but on Virgin Australia theyre $278 AUD. Cant tell me the currency conversions are to blame.

[Raz]

Here's another good one.

SYD-AKL 20/November 945am, 1030am 650pm all $377 the works on air nz website but on Virgin Australia theyre $278 AUD. Cant tell me the currency conversions are to blame.

Wanted to try AA via AkL - LAX currently with the 787. Found cheaper by 700$ to book via Qantas than AA for same flight last week....

[Under Surveillance]

Subsequently had it confirmed to me by investor relations that investor days are for institutions and analysts...that explains why even large retail holders like my friend Couta1 didn't get an invite. They feel the annual meeting is the appropriate venue for retail holders with the full board present and extended time for Q & A. Time for a Tui...I would have thought all the top 100 shareholders should get an invite i.e. anyone with over 100,000 shares.
I sympathise with companies which want to confine the audience at investor days to people who are sophisticated in financial matters. I've attended AGMs where the questions from the floor from "ordinary punters" were so basic, or obsessed, it was excruciating all round. With the technology today it should be required of listed companies that they post unedited video proceedings at investor days on their websites, so that the great unwashed can see what went on and be assured of disclosure for all. With the media in general having lost the capacity and inclination to present significant reports on corporate going-ons, this is one way in which current and potential shareholders can at least get the news, and see the spin, from listed companies and so be better assured of continuous disclosure.

[winner69]

I bought in around $1.20 and sold about half around $2.70 odd. I still hold the other half and am unlikely to sell this time around as its a well run company that I use quite a bit, making heaps of money in an area that is still growing. I personally wouldn't buy now as I prefer to buy when sentiment is clearly negative with a reasonable chance of changing to the positive. As I've said before on this thread when the sp was well positioned around $3, airlines generally are unprofitable and when airlines are profitable they expand and when the next contraction occurs in the market they are squeezed. They are cyclical companies. Once the talk is about big profits in the industry, its time to reach for your parachute. That's just my view, don't take my advice as I am often wrong.

I just can't this chart out of my mind, esp if you extend the red line down to $1.50 odd

It says everything that Hoop has said about 'cyclicals' - esp airlines

The sage advice from my new friend I met in Queenstown the other say says "winner, airline stocks can be very rewarding but only buy at the bottom of the inevitable cycle and never never buy near the top" (short term trading doesn't count)

[Jaa]

Here is something that continually baffles me.

E.g. Auckland to London 15-Jun-16, return 29-Jun-16 (but the results are typical of most dates).

Cheapest options:
via Air New Zealand website:
out AIR/Cathay $1,393 (26h 20m)
rtn Virgin/Cathay $1,640 (26h 30m)
Total $3,033.00

(1 stop Hong Kong both ways)

via Lufthansa website:
out Cathay/Luft/Luft $992.87 (28h 55m)
rtn Luft/Luft/AIR $1350.50 (29h 20m)
Total $2,342.97

(2 stop Frankfurt/Hong Kong both ways)

Both AIR & Lufthansa are both Star Alliance (whilst Virgin & Cathay are not)

Not only but also.
There are also pure Cathay/AIR options which are more than $500 cheaper if booked via Cathay than AIR.


Best Wishes
Paper Tiger

Code share or alliance partners are free to set their own prices.

Air NZ's higher prices show the power of their marketing muscle in NZ vs other airlines.

The situation is reversed Singapore to Auckland. Air NZ sells seats on Singapore Airlines flights at up to 50% less than Singapore Airlines does.

[Snow Leopard]

Code share or alliance partners are free to set their own prices.

Air NZ's higher prices show the power of their marketing muscle in NZ vs other airlines.

The situation is reversed Singapore to Auckland. Air NZ sells seats on Singapore Airlines flights at up to 50% less than Singapore Airlines does.

So: Auckland - Singapore 15-Jun-16, return 29-Jun-16.

AIR out, AIR back:
AIR price $1658.00, SingAir price $1,556.69

SingAir out, SingAir back:
Air price $2,208.00, SingAir price $2,356.69

Daft I call it.

Best Wishes
Paper Tiger

[percy]

I sympathise with companies which want to confine the audience at investor days to people who are sophisticated in financial matters. I've attended AGMs where the questions from the floor from "ordinary punters" were so basic, or obsessed, it was excruciating all round. With the technology today it should be required of listed companies that they post unedited video proceedings at investor days on their websites, so that the great unwashed can see what went on and be assured of disclosure for all. With the media in general having lost the capacity and inclination to present significant reports on corporate going-ons, this is one way in which current and potential shareholders can at least get the news, and see the spin, from listed companies and so be better assured of continuous disclosure.

In totally agreement.
At one agm I went to about 4 years ago the Chairman pointed out that the questioner was at the wrong meeting.!!
Offcourse the news media only reported what the questioner said.
What I have found good value is attending company presentations our local brokers have organised.The presenters either CEO or CFO really go out of their way to answer your questions.

[couta1]

wow, scolded by the mods for one very minor remark. Time to delete again.

Bye. Hope you'll be back OG, we need more like you on here not less, but I could understand why if you decided not to.