AIR - Air NZ.

[Arbroath]

Well I have consistenly over the entire time I have been on Sharetrader said that I do not believe that one should invest in any airline.

FYI Currently VAH has a domestic network and QAN has an investment grade rating.


Best Wishes
Paper Tiger

Fair enough but I'm not debating the merits of airlines per Se just that AIR is clearly better than QAN or VAH. I know QAN got their rating back but it's only because of leverage to low fuel prices imo. They lost their rating a few years ago while AIR maintained theirs. VAH has c 35% of the domestic air traffic in OZ but have been a perennial loss maker compared to AIR who have c 90% market share on the NZ domestic network and successfully milk that franchise to support the airline as a whole despite any local criticism. A bit like how people hate banks and petrol companies but they have to use them and they keep making $$. Jetstar can peg them back a little but it doesn't compare to what QAN do to VAH and vice versa.

AIR will no doubt pay good dividends for this and next year and is cheaper on earnings than QAN and VAH but whether it is of itself a good investment is much more complicated.

[Mickey]

Well I have consistenly over the entire time I have been on Sharetrader said that I do not believe that one should invest in any airline.

So if you hold onto this belief so strongly, why do you come into this thread? Why not leave this thread for those who currently invest / trade or have AIR in their watchlist.

Discl: holding AIR

[Raz]

So if you hold onto this belief so strongly, why do you come into this thread? Why not leave this thread for those who currently invest / trade or have AIR in their watchlist.

Discl: holding AIR

Well its may not be his reason however i appreciate PT posts as he provides a different perspective for consideration as an investor/trader. If we just get the positive ra ra from the cheerleaders we lose something.... equally if the place is dominated by pessimists...we lose information to make a balanced view.

[Biscuit]

Why not leave this thread for those who currently invest / trade or have AIR in their watchlist.



That would be very bad for the forum.

[Baddarcy]

That would be very bad for the forum.

Agreed, the point for me of this forum is to hear as many different points of view as possible. You learn a lot more from listening than from talking.

[stoploss]

So if you hold onto this belief so strongly, why do you come into this thread? Why not leave this thread for those who currently invest / trade or have AIR in their watchlist.

Discl: holding AIR
If his posts upset you put him
on ignore . But maybe one day he will like the AIR numbers and you will miss the post ....

[kuotadriver]

Personally I'm stunned how quickly the world wide commercial airline outlook has turned.

Also best not to pixx off the locals especially if tourism were to drop off. See below, been waiting for this to be raised. When the weather is bad from Christchurch into Wellington or Queenstown you do not want to be on a ATR 72..chances are they will turn around and take you back to Christchurch. After the first few times this happened everyone now wants to book on the airbus which is now limited flights...

http://www.stuff.co.nz/travel/travel-troubles/82769956/turbo-props-slower-noisier-more-cramped-does-air-nz-think-christchurch-travellers-are-suckers

If an ATR can't make it in to Wellington, then chances are, an A320 won't be able to either.

It would be extremely rare for an ATR to divert back to Christchurch from Wellington.

[Beagle]

That´s very true Roger although AIR´s profitable domestic network relies on tourists, many from Europe, to keep the planes full.
My post was more about pointing out some gathering clouds for the industry as a whole, clouds that are quite dark at present. Worth watching in my view mate.

Absolutely agree mate. I suspect there's two sides to this though. Some of the people that would have gone to Europe for their holiday will visit down-under instead for our clean / green / safe environment.

Latest stat's from Tourism N.Z. show 11% growth so they're still coming in droves. Whether AIR is getting its share of this growth or many of these new travellers are coming in on bargain Chinese / Asian flights is another question.

Latest operating stat's from AIR tend to indicate their growth is at a lower rate than the inbound tourism growth so some slippage in market share appears to be evident.

[Raz]

Absolutely agree mate. I suspect there's two sides to this though. Some of the people that would have gone to Europe for their holiday will visit down-under instead for our clean / green / safe environment.

Latest stat's from Tourism N.Z. show 11% growth so they're still coming in droves. Whether AIR is getting its share of this growth or many of these new travellers are coming in on bargain Chinese / Asian flights is another question.

Latest operating stat's from AIR tend to indicate their growth is at a lower rate than the inbound tourism growth so some slippage in market share appears to be evident.

So how much are we losing of market share given options into Auckland, Queenstown and Christchurch..will Wellington also follow this trend..I guess we will keep the domestic traffic. I do wonder on the Auckland hub approach and how much competition that does allow in elsewhere. When the horse has bolted...

[kiora]

That would be very bad for the forum.

Hear ,hear,I agree with that!

[Mickey]

If his posts upset you put him
on ignore . But maybe one day he will like the AIR numbers and you will miss the post ....

It would take a lot more than that to upset me :) I guess I just find it interesting that someone who says that "they do not believe that one should invest in any airline" is participating in a thread that is for an airline stock. A bit like me turning up at the local pub and telling the punters that I don't believe they should be drinking booze. Anyway, enough of that - back to the more serious business of investing (or trading). Happy Friday

[Jantar]

So if you hold onto this belief so strongly, why do you come into this thread? Why not leave this thread for those who currently invest / trade or have AIR in their watchlist.

Discl: holding AIR
I value PT's input. I may not always agree, but he provides a sensible balance to the sometimes over optimistic hype on many shares.

Discl: Just submitted an order for more AIR

[BlackPeter]

It would take a lot more than that to upset me :) I guess I just find it interesting that someone who says that "they do not believe that one should invest in any airline" is participating in a thread that is for an airline stock. A bit like me turning up at the local pub and telling the punters that I don't believe they should be drinking booze. Anyway, enough of that - back to the more serious business of investing (or trading). Happy Friday

Hmm - interesting statement. I always thought this forum is for exchanging ideas about stocks, investment ideas and the share market in general. I learned here (well, maybe not on the AIR thread) a lot about investing and am very grateful to people like PT, Hoop, KW and many others that they share their views with us. I don't always agree with them, but I always find their posts useful.

I think what PT probably wanted to indicate is that investments in airlines are inherently more risky than many other industries, and therefore should command a higher level of (expected) return. This is a very relevant view for this thread, so why shouldn't he state that here, whether he intends to invest in AIR or not?

Sure - some people only learn from their own mistakes (and some not even that), but for everybody else is it invaluable to have access to a wide spectrum of views ... and if it is just to test from time to time the own investment decision. Some people might be perfect (well, I am not), but for everybody else this is of benefit.

If you don't agree with PT - why don't you just prepare an argument indicating why people should invest into airlines (and I certainly could think about a reason or two for that as long as the promised return looks good enough to accept the higher risk) instead of questioning his reasons to post on this thread?

I would love to keep diversity of opinions on all threads ... and certainly the pearls of wisdom from some of our most experienced contributors.

[Joshuatree]

Yes ;Investor bias is a design flaw in humans(like kneecaps:).Opposing views, wisdom,experience and unbiased opinions can blossom into equanimity.

[Tony Two Gloves]

I to enjoy a variety of posts positive or Negative and we are lucky on this thread to have some very knowledgeable people. But I wonder if someone held a gun to PT's head and said you have to invest $50K of your hard earned money in one of the following stocks (QAN, VAH or AIR) would AIR really be the third choice??

[Snow Leopard]

I to enjoy a variety of posts positive or Negative and we are lucky on this thread to have some very knowledgeable people. But I wonder if someone held a gun to PT's head and said you have to invest $50K of your hard earned money in one of the following stocks (QAN, VAH or AIR) would AIR really be the third choice??

http://data1.ibtimes.co.in/cache-img-0-450/en/full/610434/1468850865_kabali.jpg
Buy MY airline

VAH is the obvious first choice, QAN definitely the second.

Best Wishes
Paper Tiger

[Biscuit]

VAH is the obvious first choice, QAN definitely the second.

Paper Tiger

Yeh, OK Mickey you were right, lets just shoot her/him:)

[kiora]

Yeh, OK Mickey you were right, lets just shoot her/him:)

Really,why? because PT comments are a counterintuitive proposition? :)

[Beagle]

Yeh, OK Mickey you were right, lets just shoot her/him:)
LOL...anyone that can't see that VAH is a flea ridden mongrel should've gone to spec savers. For posters further amusement https://www.bing.com/videos/search?q=tigers+jumps+through+hoop&view=detail&mid=DE93BDE866ABC5052803DE93BDE866ABC5052803&FORM=VIRE

Air made money throughout the GFC, VAH can't even make money during FY16 with the strongest tailwinds in the aviation sector in arguably 50 years !
Remind me again, how many billions did QAN lose a couple of years ago ?

There's valuable insights and counter arguments and then there's trolling for a reaction, the two types of posts are different animals.

[Gizzajob I can do that]

Yeh, OK Mickey you were right, lets just shoot her/him:)

Now that would be a DCB to watch!

[RTFQ]

Why would you fly Emirates??? They are really putting a squeeze on media releases.

Pilot chatter is, the emiratie pilot after a hard landing initiated a go around, retracted the undercarriage before the power came on. The aircraft sank, struck an engine and the rest is history.

The link is the actual ATC communications
https://www.youtube.com/watch?v=94VPOXc2bEM

[Snow Leopard]

LOL...anyone that can't see that VAH is a flea ridden mongrel should've gone to spec savers. For posters further amusement https://www.bing.com/videos/search?q=tigers+jumps+through+hoop&view=detail&mid=DE93BDE866ABC5052803DE93BDE866ABC5052803&FORM=VIRE

Air made money throughout the GFC, VAH can't even make money during FY16 with the strongest tailwinds in the aviation sector in arguably 50 years !
Remind me again, how many billions did QAN lose a couple of years ago ?

There's valuable insights and counter arguments and then there's trolling for a reaction, the two types of posts are different animals.


I think we can all agree that AIR is the best airline listed on the NZX.

However why this widespread vitriol of other airlines beats me. If you are happy with your AIR then good for you, relax.

But I note that people keeping harping on about the past and to let you into a little secret:

Successfully profiting from investing is about looking to the future and finding those companies where present price is at a discount to value.
You do not get it right every time but you need to be more right than wrong over time.

Best Wishes
Paper Tiger

[BlackPeter]

Why would you fly Emirates??? They are really putting a squeeze on media releases.

Pilot chatter is, the emiratie pilot after a hard landing initiated a go around, retracted the undercarriage before the power came on. The aircraft sank, struck an engine and the rest is history.

The link is the actual ATC communications
https://www.youtube.com/watch?v=94VPOXc2bEM

Quite unfair and inappropriate statement. Emirates is (together with Air New Zealand) in the group of 12 safest airlines ... and while this ranking has been established prior to the latest crash ... Emirates has still not yet lost one single passenger, despite flying many more miles than Air New Zealand. Air New Zealand however lost already full planes including all passengers (think Mount Erebus).

Personally - I used to do a lot of long haul flights (and still do the odd one) and used over time (in no particular order) Quantas, Cathy Pacific, Lufthansa, Air New Zealand, Emirates, Singapore Airlines, United, BA. Some of them are really bad (BA and Quantas), and some of them are quite good. I'd generally rate AIR, Emirates, Singapore Airlines and Cathy Pacific as some of the better ones. However - if the cost and the connections are comparable, than I would always pick Emirates over AIR, though AIR is improving over time (newer planes and better seats). Emirates still offers much better conditions (e.g. better luggage allowance), often better food, better service and always modern planes, while AIR offers more a lottery - some new and comfortable, some old as.

[Jantar]

.... some new and comfortable, some old as.The most comfortable aircraft I have ever flown on was an Air New Zealand Vickers Viscount. Its such a pity they don't still have them. :p

[Beagle]

I think we can all agree that AIR is the best airline listed on the NZX.

However why this widespread vitriol of other airlines beats me. If you are happy with your AIR then good for you, relax.

But I note that people keeping harping on about the past and to let you into a little secret:

Successfully profiting from investing is about looking to the future and finding those companies where present price is at a discount to value.
You do not get it right every time but you need to be more right than wrong over time.

Best Wishes
Paper Tiger

Thanks for that secret PT, I never would have guessed. That secret insight explains your remarkable success in the ST competitions in the last few years....and to think having studied Investment analysis at Auckland Uni and getting an A pass I've been doing it wrong for over 30 years...

Anyway...yes please let's get back to discussing AIR, thankfully Chris Luxon has managed to ostensibly extricate AIR from VAH...what would the directors and CEO of AIR know about running an airline eh...pretty sure when he was on the board of directors of VAH Mr Luxon might have gathered one or two insights about the company than even you might have missed PT ?

[Gizzajob I can do that]

Thanks for that secret PT, I never would have guessed. That secret insight explains your remarkable success in the ST competitions in the last few years....and to think having studied Investment analysis at Auckland Uni and getting an A pass I've been doing it wrong all these years...

Anyway...yes please let's get back to discussing AIR, thankfully Chris Luxon has managed to ostensibly extricate AIR from VAH...what would the directors and CEO of AIR know about running an airline eh...pretty sure when he was on the board of directors of VAH Mr Luxon might have gathered one or two insights about the company than even you might have missed PT ?

Dont forget the 25 yard breaststroke certificate and Bronze arrow award from cubs, lol

[mikeybycrikey]

I think we can all agree that AIR is the best airline listed on the NZX.

However why this widespread vitriol of other airlines beats me. If you are happy with your AIR then good for you, relax.

But I note that people keeping harping on about the past and to let you into a little secret:

Successfully profiting from investing is about looking to the future and finding those companies where present price is at a discount to value.
You do not get it right every time but you need to be more right than wrong over time.

Best Wishes
Paper Tiger

That's such good advice that I feel like I need to frame it and hang it on the wall.

[Raz]

Thanks for the entertainment everyone..more exciting than the share price!

[couta1]

rmbbrave, you would be a braver person than I to risk your money on Air New Zealand. This post from the resident feline from 20/9/2004, I reckon near 12 years of singing the same tune means most holders of the stock would most likely have got the cats message by now. Actually I hear on good authority that Air treat feline passengers very well whilst in transit.

[Baa_Baa]

Don't lose hope, without hope you have nothing as a holder, albeit hope is losers strategy it still makes you feel better. AIR rallied hard off last Friday's close up, broke $2.28 resistance, slammed into the $2.35 resistance then folded back to $2.28, but still well up on the dismal $2.02 lows and nicely above the rising short term trend line line. Probably just a few nervous nellies shaken out or nimble traders cashing in on the ~10% capital gains? The patient will be here for at least the dividend, after which the real fun starts, who holds, who folds etc. Like a Glen Campbell song, but you don't have to listen to it, fortunately.

[Snow Leopard]

That's such good advice that I feel like I need to frame it and hang it on the wall.

I can offer you a good deal on an original copy with my paw-print on it.

Best Wishes
Paper Tiger

[iceman]

Absolutely agree mate. I suspect there's two sides to this though. Some of the people that would have gone to Europe for their holiday will visit down-under instead for our clean / green / safe environment.

Latest stat's from Tourism N.Z. show 11% growth so they're still coming in droves. Whether AIR is getting its share of this growth or many of these new travellers are coming in on bargain Chinese / Asian flights is another question.

Latest operating stat's from AIR tend to indicate their growth is at a lower rate than the inbound tourism growth so some slippage in market share appears to be evident.

The latest stats are indeed good, but they are history.
Yes I think NZ has a strong point as a tourist destination being perceived as a fairly safe destination. But a large chunk of our tourists are from Europe and they almost all travel via Asia. If Lufthansa, Europe´s biggest long hau airline, is saying they notice a big drop in forward bookings to Asia, I am concerned about the effect that will have on the NZ toruism business.

Even though I am not interested in debating the merits of commentors on here, I totally agree with posters who have said we need differing views on this forum. I particularly agree with Black Peter´s great post 7764.
PT provides much to this forum

[Beagle]

This post from the resident feline from 20/9/2004, I reckon near 12 years of singing the same tune means most holders of the stock would most likely have got the cats message by now. Actually I hear on good authority that Air treat feline passengers very well whilst in transit.

A dogmatic cat :)

Plenty of Asians / Chinese flying here rather than the other way to Europe Iceman, I wouldn't lose any sleep over it if I were you mate.

[RTFQ]

A lot of Europeans now coming thru EZE. I suspect this is why AIR is increasing capacity on this route.

[Snow Leopard]

...what would the directors and CEO of AIR know about running an airline eh...

http://assets.amuniversal.com/86d86e805d10012ee3bd00163e41dd5b

The Air New Zealand board is one of the least experienced, in the aviation field, in the industry.
Only Paul Bingham has put in real work at an airline and that was with Air New Zealand.

Even Mr Luxon himself admits that he is not an aviation man, his experience is limited to his time at Air New Zealand.


...pretty sure when he was on the board of directors of VAH Mr Luxon might have gathered one or two insights about the company than even you might have missed PT ?

He might, but then again he might not.
Then again, again, there may be a few insights that he missed.

Best Wishes
Paper Tiger

Disc: Have visited the Flying Tigers Museum in Chongqing.

[garfy]

"The Air New Zealand board is one of the least experienced, in the aviation field, in the industry.
Only Paul Bingham has put in real work at an airline and that was with Air New Zealand. "

Hmm, the AIR board don't seem to be doing too badly for relative amateurs do they? They operate a very efficient commercial airline, have thought well about the future in that the fleet is very up-to-date, they make a reasonable profit even in the current climate competing against an increasing number of more experienced competitors - and all this accepting that they may have missed again and again and again valuable insights from VAH.....

Yes, I would like the SP to soar, but no one has ever said that flying was always smooth, with a tailwind.

Very proud shareholder!

[777]

Norm Geary did not have an aviation background. Nor did Ralph Norris or Jim Scott. Rob Fyfe's aviation background was as an RNZAF engineer.

It is about running a business, not a flying school.

[tim23]

Historically stock rises nicely post result and I am guessing this time will be the same

[Beagle]

VAH would have given C.L. many insights into how not to run an airline. VAH's balance sheet and operating position is still very weak and vulnerable even after the capital raise. Their CEO has fiddled for six years while Rome burned. Very happy AIR is down to 2.5% and their unsecured shareholder loan to them has either already been repaid or is about to be out of the cash issue proceeds. That circa $A130 shareholder loan is about $137m Kiwi and would be a good start (circa 12 cps) towards funding our special divvy :)

[RTFQ]

The latest stats are indeed good, but they are history.
Yes I think NZ has a strong point as a tourist destination being perceived as a fairly safe destination. But a large chunk of our tourists are from Europe and they almost all travel via Asia. If Lufthansa, Europe´s biggest long hau airline, is saying they notice a big drop in forward bookings to Asia, I am concerned about the effect that will have on the NZ toruism business.

Even though I am not interested in debating the merits of commentors on here, I totally agree with posters who have said we need differing views on this forum. I particularly agree with Black Peter´s great post 7764.
PT provides much to this forum

From a pure business model I think management would have ditched the international arm of AIR a long time ago. The return on investment is just not there.
AIR's international Ops is more about Branding for the Govt, waving the NZ flag and supplying customers to the profitable side of the business. I don't think it really matters who brings the tourists to NZ as long as they get to fly domestically.

[mondograss]

True enough, but I think that when the crunch comes on, that's when it starts to matter who brings the tourists to NZ as the other airlines would have no vested interest in doing so and would drop the route if it suited them. This is why it's in AIR's interest to maintain an international arm, even if it becomes a loss leader (which seems unlikely given they would pick up the freight volumes if competitors back away).

[Beagle]

From a pure business model I think management would have ditched the international arm of AIR a long time ago. The return on investment is just not there.
AIR's international Ops is more about Branding for the Govt, waving the NZ flag and supplying customers to the profitable side of the business. I don't think it really matters who brings the tourists to NZ as long as they get to fly domestically.

You're focusing on the RPK rate in N.Z. for short domestic flights and not factoring in all the ground handling costs, aviation, landing fees or the fact that domestic planes are used for a relatively low hourly rate per day. I mean no disrespect but I couldn't disagree more.

[stoploss]

"http://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by RTFQ http://www.sharetrader.co.nz/images/buttons/viewpost-right.png (http://www.sharetrader.co.nz/showthread.php?p=631393#post631393)From a pure business model I think management would have ditched the international arm of AIR a long time ago. The return on investment is just not there.
AIR's international Ops is more about Branding for the Govt, waving the NZ flag and supplying customers to the profitable side of the business. I don't think it really matters who brings the tourists to NZ as long as they get to fly domestically."
Labour govt missed it big time circa 2007 , they could have flogged off Auck airport to Dubai , allowing them to create an international hub out of Auckland ( Aussies wouldn't let them do it there) . At the same time they could have
flogged off the International part of air nz .Remember the international losses suffered over GFC .... anyway thats history , but that would have been a couple of very good deals to pull off imo.

[RTFQ]

[QUOTE=Roger;631404]You're focusing on the RPK rate in N.Z. for short domestic flights and not factoring in all the ground handling costs, aviation, landing fees or the fact that domestic planes are used for a relatively low hourly rate per day. I mean no disrespect but I couldn't disagree more.


Higher frequency and synergies produce lower costs, ground handling and the alike. I suggest that the capital cost of the international fleet is 3 x that of domestic fleet numbers.
Yet the domestic ops produce 70% of the profit.

A good modelled company aims for 15% return on investment, an airline uniquely gets around 4% return.

On a side note UAL some time ago made a record profit of $900M, this equated to an average of $9.80 per passenger carried that year. Still a very poor return on investment.

Enjoy your posts R

[777]

RTFQ it is obvious then that all airlines should close down. (smiley face if I knew how to produce one)

[Raz]

RTFQ it is obvious then that all airlines should close down. (smiley face if I knew how to produce one)

Not all, leave a couple flying and let us buy share in them before the formal decree that closes the other bad apples. ROR will sort itself out...and demand.

This makes as much sense as no industry experience on Boards as required..not sure what everyone is on around here...

[Beagle]

Not all, leave a couple flying and let us buy share in them before the formal decree that closes the other bad apples. ROR will sort itself out...and demand.

This makes as much sense as no industry experience on Boards as required..not sure what everyone is on around here...

I love the smell of spent aviation fuel when standing too close to planes with engines running on the tarmac....it would appear some love it more than me :)

[simjp81]

Hi everyone. New here and new to trading. Have bought a small holding in AIR and have been enjoying reading everyone's thoughts and opinions.

Can anyone tell me what they estimate the upcoming dividend range will be including a possible special.

Thanks

[Gizzajob I can do that]

Hi everyone. New here and new to trading. Have bought a small holding in AIR and have been enjoying reading everyone's thoughts and opinions.

Can anyone tell me what they estimate the upcoming dividend range will be including a possible special.

Thanks

IMHO roughly about two and half times the length of a piece of string minus the amount of apples in a barrel of grapes. 0 to 40c lol

[sb9]

Hi everyone. New here and new to trading. Have bought a small holding in AIR and have been enjoying reading everyone's thoughts and opinions.

Can anyone tell me what they estimate the upcoming dividend range will be including a possible special.

Thanks

Welcome to the forum simjp81.

I would say the final divvy would be in 10-15c range and as for special its anyone's guesstimate. If you've time just go thro' few posts earlier in month of Jul where there's been good discussion about the possible special divvy which arose out of AIR selling out their stake in VAH.

If you would like a figure for special my bet is around 15-20c range, if there is one. Hope it helps.

[simjp81]

Thanks guys. Yes that helps. I know it's a bit of a guessing game but keen to hear people's estimates.

[Beagle]

Thanks guys. Yes that helps. I know it's a bit of a guessing game but keen to hear people's estimates.

Final 10-15 cps, special, (which is a virtual certainty in my view) also 10-15 cps, both fully imputed.

[see weed]

Hi everyone. New here and new to trading. Have bought a small holding in AIR and have been enjoying reading everyone's thoughts and opinions.

Can anyone tell me what they estimate the upcoming dividend range will be including a possible special.

Thanks
Welcome to the mad hatters club. I would be happy with 5c div and 5c special or 10c div and no special. Then if they give you more it comes as a nice surprise.

[couta1]

I'm looking for 25c in total fully imputed, would be happy with that. Under 20c would be a bit lean IMO.

[couta1]

Air rated in the top 3 airlines worldwide by TripAdvisor out of 66 carriers(Not really a surprise to some of us aye) Meanwhile Jetstar rated one of the worst but hey no surprises there either.

[winner69]

Air rated in the top 3 airlines worldwide by TripAdvisor out of 66 carriers(Not really a surprise to some of us aye) Meanwhile Jetstar rated one of the worst but hey no surprises there either.

Has that broken Jetstar jet left Guam yet?

[Beagle]

I'm looking for 25c in total fully imputed, would be happy with that. Under 20c would be a bit lean IMO.

10 cps interim divvy was definitely on the lean and mean side...but now AIR are flush with cash from quitting virgin at a good price and getting their shareholder loan repaid...

[Baa_Baa]

10 cps interim divvy was definitely on the lean and mean side...but now AIR are flush with cash from quitting virgin at a good price and getting their shareholder loan repaid...

AIR quit Virgin at a big loss, it's only greedy shareholders who cast that loss aside on the assumption that AIR will pay the capital less losses back to the shareholders as special dividends, rather than make good on their promise to invest shareholder capital in earnings accretive investments. Big fail imho. Maybe they have run of ideas and flick the residual value back to shareholders, maybe they won't. If they do it will confirm AIR's lack of investment nouse and non-domestic growth potential. Imagine how that looks to their international competitors, bowing out on the whim of a disgruntled CEO with a grudge, passing growth capital less losses back to shareholders. I bet those competitors are laughing their heads off watching AIR revert back to being a bit player in NZ reliant on gouging super profits from their monopoly domestic network.

[Snow Leopard]

AIR quit Virgin at a big loss...
...gouging super profits from their monopoly domestic network.

This should be good....

[Jay]

Not forgetting the government (as majority owner) maybe whispering in their "air" saying we would like a bit of cash please!

[Raz]

Not forgetting the government (as majority owner) maybe whispering in their "air" saying we would like a bit of cash please!

That is the only reason in my view we would be granted a special..given recent track history, management are tight as.

[couta1]

That is the only reason in my view we would be granted a special..given recent track history, management are tight as.
Tight as toward shareholders but not toward themselves, time to loosen the purse string this divvy.

[brend]

Tight as toward shareholders but not toward themselves, time to loosen the purse string this divvy.

bastards havent given me my refund yet...been 1 1/2 months since approved.

[Beagle]

This should be good....

You're going to be disappointed today, this dog is too busy with urgent business issues and won't be biting on the bait...today. Get a fresh lot of popcorn tomorrow.

I agree with you Couta1.

[sb9]

Looking at the trading pattern over past few days, looks like Mr Market is saying 228-230 is fair value with expected final+special divvy loaded at around 20-25c which makes ex-div price to be around 210-215 range going forward.

[GR8DAY]

.....so when can we expect this special plus final to be announced. Are we (nearly) there yet??

[Rep]

Has that broken Jetstar jet left Guam yet?

No it hasn't I understand but the JQ12 passengers got back to OOL yesterday morning on another Jetstar 787 sent up to retrieve them.

The Jetstar 787 uses the GE GEnx engines, there are reports that the engine had a low oil light warning on the 3 month old engine that had replaced an engine that had only been in service for nine months (replaced for an undisclosed 'fault'). There is a FAA directive regarding that engine type on the 787 regarding unexpected engine shutdown but indications that this problem isn't related to that fault. Qantas has an order for several more with the GEnx turbofans that it was planning to replace their last 747s with.... so they will be having a few conference calls with GE over the next few weeks given that there has been some 'operational issues' with the GEnx on the 787.

If you are wondering, the Air NZ 787-9 uses the Rolls Royce Trent 1000 as do the 787-8 of ANA - they were the launch customers for the -8 and -9 models - although there are GEnx variants for both of these models now available.

[thestg]

.....so when can we expect this special plus final to be announced. Are we (nearly) there yet??
Normally they go XD in 2nd week of September so I guess announcement will be on 26th August (Earnings Report)

[Beagle]

No it hasn't I understand but the JQ12 passengers got back to OOL yesterday morning on another Jetstar 787 sent up to retrieve them.

The Jetstar 787 uses the GE GEnx engines, there are reports that the engine had a low oil light warning on the 3 month old engine that had replaced an engine that had only been in service for nine months (replaced for an undisclosed 'fault'). There is a FAA directive regarding that engine type on the 787 regarding unexpected engine shutdown but indications that this problem isn't related to that fault. Qantas has an order for several more with the GEnx turbofans that it was planning to replace their last 747s with.... so they will be having a few conference calls with GE over the next few weeks given that there has been some 'operational issues' with the GEnx on the 787.

If you are wondering, the Air NZ 787-9 uses the Rolls Royce Trent 1000 as do the 787-8 of ANA - they were the launch customers for the -8 and -9 models - although there are GEnx variants for both of these models now available.

I hear from an experienced pilot the GE engines are prone to shutdown in severe thunderstorms too. Hard to beat Rolls Royce engines so AIR certainly made the right engine choice there. I hear Rolls Royce cars are pretty good too.

[Marilyn Munroe]

The Jetstar 787 uses the GE GEnx engines, there are reports that the engine had a low oil light warning on the 3 month old engine that had replaced an engine that had only been in service for nine months (replaced for an undisclosed 'fault'). There is a FAA directive regarding that engine type on the 787 regarding unexpected engine shutdown but indications that this problem isn't related to that fault.

If you are wondering, the Air NZ 787-9 uses the Rolls Royce Trent 1000 as do the 787-8 of ANA - they were the launch customers for the -8 and -9 models - although there are GEnx variants for both of these models now available.

What sort of engines do the LAN Chile 787's use on their swings deep into the Southern Ocean to and from Santiago?

Boop boop de do
Marilyn

[Snow Leopard]

I hear from an experienced pilot the GE engines are prone to shutdown in severe thunderstorms too. Hard to beat Rolls Royce engines so AIR certainly made the right engine choice there. I hear Rolls Royce cars are pretty good too.

To deviate a little, when I was young I went for a job interview with RR, I was told it was with their aero-engine division but they did a switch on me, they were desperate to find engineers willing to go out for months at a time on nuclear submarines that had their reactors in them.

I said no.


Meanwhile on the subject of dividends:
I still think they did a bad job giving you 10c for an interim this year but now you are entitled to expect at least 13c for an ordinary.

I would have let you have 7c and 10c.

As for a special if they give you more than half of the VAH sale proceeds they are doing the wrong thing in my book.

Never mind the youngest fleet in the sky in 2020, over the next three years they still have some serious shopping on their agenda, they were at half year a tad over-geared and the future is uncertain.

Best that they play it cautious and let you have a little now and more later if the weather turns out fine.

Best Wishes
Paper Tiger

[777]

I hear from an experienced pilot the GE engines are prone to shutdown in severe thunderstorms too. Hard to beat Rolls Royce engines so AIR certainly made the right engine choice there. I hear Rolls Royce cars are pretty good too.

The 767's have GE's. The 744's, 5 had GE's and 3 had Rollers. Different variants but GE are just as good as Rolls Royce.

[Rep]

I hear from an experienced pilot the GE engines are prone to shutdown in severe thunderstorms too. Hard to beat Rolls Royce engines so AIR certainly made the right engine choice there. I hear Rolls Royce cars are pretty good too.

http://www.bloomberg.com/news/articles/2016-04-22/repairs-to-ge-engines-ordered-after-dreamliner-in-flight-damage

Airlines flying Boeing Co.’s 787 Dreamliner jets with the latest General Electric Co. engines were ordered to repair them, or swap out at least one with an older model, in an urgent safety directive issued after an in-flight failure.

A GEnx-1B PIP2, part of a family of engines plagued by issues related to icing, suffered “substantial damage” in the Jan. 29 incident, when ice on the fan blades broke loose, the U.S. Federal Aviation Administration said in an order published Friday in the Federal Register.

“The potential for common cause failure of both engines in flight is an urgent safety issue,” the FAA said in its order.

The GEnx, a high-efficiency engine developed for wide-body aircraft, has faced earlier issues with icing. In 2013, the FAA ordered airlines to avoid flying 787 and 747-8 planes equipped with the GE engines near thunderstorms in high-altitude cruise flight. Even in those sub-freezing temperatures, moisture from the storms could enter the engines and form dangerous ice, the FAA said.

[Rep]

What sort of engines do the LAN Chile 787's use on their swings deep into the Southern Ocean to and from Santiago?

Boop boop de do
Marilyn

The Trent 1000

[Beagle]

10 cents on earnings of 30 cps in the first half had this divvy hound howling with discontent especially when he saw management investing money in environmentally sensitive capital intensive projects with highly dubious investment fundamental's.

The hounds heckles are raised when he knows management want to prance around looking pretentious and proud in their electric cars while said hound can't feed his environmentally irresponsible dinosaur V8 engine properly.

Now that previous management's folly of repeating earlier managements folly of Ansett all over again, (why Rob Fyfe and his team couldn't learn for the first fiasco is anyone's guess) is finally all but over they should simply repay out the full proceeds as a clear sign they will never transgress in such inappropriate expansion folly again.

They're a successful bit player, the 80th biggest airline in the world and that's their lot in life and simply accept it and move on.

Gearing by any peer comparison is modest for such a capital intensive industry. Management are all too keen to reward themselves with what many consider to be extremely generous base salaries to say nothing of their highly lucrative incentive packages and their ability to exercise and sell same with scant regard for sensitivities in terms of timing so now its finally time for shareholders patience to be rewarded at the peak of the aviation cycle, let the food bowl be full and lets all enjoy a decent feed.

No reason they can't pay out 30 cps in total, fully imputed. I'd post a picture of a beagle waiting expectantly beside a food bowl with his tail wagging if I knew how :)

P.S. Don't bother putting the popcorn on tomorrow, some posts are simply not worthy of a reply, the dog has other bones to find.

[Snow Leopard]

Expectant beagle:
https://s-media-cache-ak0.pinimg.com/236x/ba/9e/cd/ba9ecd3b1da2615be69c6a1df1341be8.jpg

Best Wishes
Paper Tiger

[Beagle]

Good advice to a budding young bean counter from a retiring executive over 30 years ago.
How did you get the photo of my beagle :) Kelly used to get the food bowl between her teeth and carry it over to me and put it at my feet if I didn't take the hint any other way :)
Once the owner has put the food in the bowl don't ever try and take it out...suspect the same principle applies to feeding certain cat's.

Anyway my days of thinking senior executives are there to entirely serve the interests of shareholders are sadly gone. This hound takes a more realistic view of how people often put their own interests first.

[ohpark0119]

was there a bad news for AIR recently?

[Snow Leopard]

You probably want it to go up tomorrow (and beyond)

http://i7.photobucket.com/albums/y269/TheTigerWithNoName/SharetraderImages/NZX-AIR/NZX-AIR-20160810.png

Ignore the orange/yellow zone boundary, it just looks like some sort of resistance thing.
But if you draw enough lines these things happen.

Best Wishes
Paper Tiger

[couta1]

was there a bad news for AIR recently? It's called market oscillations.

[workingdad]

Gee, go skiing for a day and come home to a bit of an average day.... roll on EOY please, some nervous nelleys out there

[winner69]

Gee, go skiing for a day and come home to a bit of an average day.... roll on EOY please, some nervous nelleys out there

Couta says its just market oscillations

How come working dads can take a day off to go skiing?

[workingdad]

Couta says its just market oscillations

How come working dads can take a day off to go skiing?

Workingdad doesn't work as much as he used to but in saying that taking the kids skiing is pretty hard work, fortunately for me today was purely a selfish one 😜

[Snow Leopard]

Gee, go skiing for a day and come home to a bit of an average day.... roll on EOY please, some nervous nelleys out there

nervous nelleys are usually those accusing others of being nervous nelleys^. :p

Actually the sellers are those moving their funds into Roger & Co's latest guaranteed 50% profit by Xmas stocks.

Best Wishes
Paper Tiger

^Always thought it was Nelly myself

[see weed]

Gee, go skiing for a day and come home to a bit of an average day.... roll on EOY please, some nervous nelleys out there
Not to worry, Got some more on close tonight to help support sp. Good things (div etc) will happen long before EOY:).

[Raz]

Gee, go skiing for a day and come home to a bit of an average day.... roll on EOY please, some nervous nelleys out there

haha nervous nelleys...they are the traders banking the cash..plenty of time to get set for dividends if the price is right :-)

[workingdad]

nervous nelleys are usually those accusing others of being nervous nelleys^. :p

Actually the sellers are those moving their funds into Roger & Co's latest guaranteed 50% profit by Xmas stocks.

Best Wishes
Paper Tiger

^Always thought it was Nelly myself

If I wasn't worried at 2.15 why would I be at 2.25? Happy holder and I have said what I came in at and when I was in the green so no bite from me either......

[Beagle]

nervous nelleys are usually those accusing others of being nervous nelleys^. :p

Actually the sellers are those moving their funds into Roger & Co's latest guaranteed 50% profit by Xmas stocks.

Best Wishes
Paper Tiger

^Always thought it was Nelly myself

Grrrr to you. Don't put words in this dog's mouth. HLG potential for 50% total shareholder return in the next year, SCL potential for a Chinese takeover at some stage at north of $5.

The only guaranteed things in life are death, taxes and that some people will be consistent Troublemakers.

Back to AIR, almost everything now hinges on the outlook. Its clear the company will go very close to its forecasted operating profit before extraordinary items of $800m as otherwise they would have updated the market. Outlook taking into account extra competition and effect on yields is what the market is really hanging out for more information / guidance. Special and good final divvy are already a given. Good yield stock but I don't see much potential for capital gain in the short term TBH.

[IAK]

Jetstar's New Zealand boss Grant Kerr has quit the airline. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11691815

Apparently he was employed for "his intricate inside knowledge of Air New Zealand’s regional operations were just what Jetstar needed if they were going to successfully launch an offering".
http://www.geekzone.co.nz/sbiddle/8824

[couta1]

Jetstar's New Zealand boss Grant Kerr has quit the airline. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11691815

Apparently he was employed for "his intricate inside knowledge of Air New Zealand’s regional operations were just what Jetstar needed if they were going to successfully launch an offering".
http://www.geekzone.co.nz/sbiddle/8824 Jetstar, what an inappropriate name for such a dog( I'm talking mutt) of an airline. Kiwi's should support their national carrier rather than giving money to an Aussie cause.:cool:

[vin]

Ugh Jetstar, my only ever experience was appauling. Never again

[Biscuit]

Ugh Jetstar, my only ever experience was appauling. Never again Vin, I'm sure there's no u in appalling (and there's no apostrophe in Kiwis Couta). Sorry, one glass of wine and I go all editorial.

[dobby41]

Ugh Jetstar, my only ever experience was appauling. Never again

I'm so looking forward to my experiance at the end of October - Bangkok to Auckland.
Already I have had the phone call to say the flight is cancelled and they wanted to move it 8 days forward.
8 days! I asked who in their right mind would think that was reasonable.
Long story short it is just the Melbourne-Auckland flight cancelled and now moved to something closer than 8 days.
8 days! I still can't believe that was their default position.

[workingdad]

You get what you pay for, I was tempted to use them when comparing prices but the service, less leg room and seemingly recurrent issues people talk about its just not worth it. I think AIR will keep its core customer base and Jetstar will pick up a lot of travellers that perhaps would otherwise not be flying. This competition thing with AIR, my thoughts are it just isn't all its cracked up to be but only time will tell.

[bull....]

maybe that bullish weekly stuff isn't panning out? last couple days not very good broke back below that 2.27 resistance before and yesterday couldn't get back above normally bad stuff guess its either going back to the lows or higher lol results may ditacte I believe which way

[Snow Leopard]

Fly with any airline a few times and you will have a story about some thing going amiss.

I could write you a long list of incidents that I have endured with many assorted airlines but:

-- Jetstar are the only airline who left my baggage behind, but it may have been a Melbourne Airport fault and Jetstar sent said baggage up on the next flight and delivered it to my hotel.

-- Air New Zealand are the only airline to have pissed me off sufficiently by their general attitude that I stopped flying with them for several years.

Interestingly, recently I was very scathing about check-in for an AirAsia flight from China and their follow up was excellent.

Best Wishes
Paper Tiger

Title: Qantas: Townsville to Brisbane.

[sb9]

Hey winner, might need those extra capacitors to work bit hard today...

[winner69]

Hey winner, might need those extra capacitors to work bit hard today...

The notes Emmett sent with the flux capacitors mentioned 'back to the future ' several times

Haven't sussed what that really eans yet - msybe something to do with AIR share price going backwards

[OldGuy]

back to the future = back to $3 :)

[Jay]

I second that OldGuy

[Raz]

I second that OldGuy

haha love the investors on this share..have a beer on me , possibly the majority are now traders on Air.

[Beagle]

This weary hound smells value at $2.20 cum a XXXXXL sized divvy feed so put his paw up for a slightly bigger slice of the pie at market close.

[see weed]

This weary hound smells value at $2.20 cum a XXXXXL sized divvy feed so put his paw up for a slightly bigger slice of the pie at market close.
Likewise, but had to drop some HLG to get more AIR and ATM, but am betting ATM reporting will precede AIR's. Time will tell.

[couta1]

This stock is certainly an enigma, the more I think I understand it, the less I do. Good number on the buy side yet stuck around $2.20, will be interesting to see if it does a spurt close to the results in a couple of weeks.

[Beagle]

This stock is certainly an enigma, the more I think I understand it, the less I do. Good number on the buy side yet stuck around $2.20, will be interesting to see if it does a spurt close to the results in a couple of weeks.

In my opinion its now all about the earnings outlook for FY17 and beyond mate and the lower yields on flights. $~800m profit before tax, a special and final divvy already built into the price and a given. People think the outlook isn't all the flash...which it isn't but I still think the correction is overdone relative to its international peers. Good hold for dividend yield but don't hold your breath for a quick recovery to $2.50.

[Raz]

In my opinion its now all about the earnings outlook for FY17 and beyond mate and the lower yields on flights. $~800m profit before tax, a special and final divvy already built into the price and a given. People think the outlook isn't all the flash...which it isn't but I still think the correction is overdone relative to its international peers. Good hold for dividend yield but don't hold your breath for a quick recovery to $2.50.

I agree, although the additional question to me is if there is an expectation gap between actual vs market expected dividend.

[couta1]

I wouldn't say the special and final are built into the current price as we are only guessing what that amount will be at this stage, maybe the market has priced in no special at this point until it is confirmed ?Anyways I reckon some non retail holders are still selling down keeping the price surpressed. Not expecting a quick recovery to $2.50 but confident it will get back there in due course.

[Beagle]

I agree, although the additional question to me is if there is an expectation gap between actual vs market expected dividend.

Possibly. They're extremely generous with their own management rewards but "tight as" with handing out the goodies. Max special I can see they've ever paid before is 10 cps.

So 10 cent final and 10 cent special it is....hope they surprise on the upside to that rather than some further green initiative(s) with even dodgier return on investment payback than their electric cars.

They're dirty polluters running the 80th biggest airline in the world, just accept that for what it is, get over yourself that you're going to change the world Chris and pay us out our big divvies which we deserve.

[Raz]

Possibly. They're extremely generous with their own management rewards but "tight as" with handing out the goodies. Max special I can see they've ever paid before is 10 cps.

So 10 cent final and 10 cent special it is....hope they surprise on the upside to that rather than some further green initiative(s) with even dodgier return on investment payback than their electric cars.

They're dirty polluters running the 80th biggest airline in the world, just accept that for what it is, get over yourself that you're going to change the world Chris and pay us out our big divvies which we deserve.

The market appears to see it currently the same and to be honest a little disappointing, justified with an uncertain profit forecast by management if it comes to pass? I didn't think i would get the chance to buy in again after my latest offloading before dividend declared date..rather surprised. If you have traded on the swings since the last large drop you will have made up most of your losses..I hope a lot have as the market seems to be being played by the Institutions on the drip.

[couta1]

The latest drop is disappointing so close to the results but is being caused by Insto manipulation as you say not retail holders seling. Had I had an inkling of the latest unexpected drop I would have sold some and bought back around now but I wasn't in the right setting to do that,due to hurtling down snow slopes, besides I would have been using the drip feeding method also,adding to the price drop myself.

[BlackPeter]

The latest drop is disappointing so close to the results but is being caused by Insto manipulation as you say not retail holders seling. Had I had an inkling of the latest unexpected drop I would have sold some and bought back around now but I wasn't in the right setting to do that,due to hurtling down snow slopes, besides I would have been using the drip feeding method also,adding to the price drop myself.

Hmm - just wondering why the insto's would want to manipulate the markets as you say? Maybe - just maybe they might have a good reason for selling now. It might be just easier for them to do it now (at a still acceptable price) rather than after the divvie (with or without special) is out and all eyes are on a less certain (but clearly lower margin) outlook ahead.

Discl: don't hold

[see weed]

My 2c worth. The funds have gone to other companies for a while, chasing the dividends, but will be back in force when the others go ex div. or when AIR makes results and dividend announcement.

[couta1]

My 2c worth. The funds have gone to other companies for a while, chasing the dividends, but will be back in force when the others go ex div. or when AIR makes results and dividend announcement. As always see weed, a refreshing outlook.

[Leftfield]

Cathay Pacific under pressure.

http://www.bloomberg.com/news/articles/2016-08-15/cathay-profit-margin-under-pressure-as-fuel-hedging-losses-mount

[Raz]

My 2c worth. The funds have gone to other companies for a while, chasing the dividends, but will be back in force when the others go ex div. or when AIR makes results and dividend announcement.

Possibly so, the only difference is the funds have been offloading for a long time now...the volumes are such that you just can't reinvest at the same level quickly.

[winner69]

With all this talk of the cyclical nature of airline performance and how when things get good (like low fuel prices) they start doing silly competitive things and its like a race to the bottom again ...I just can't this image out of my mind

[BC_Doc]

With all this talk of the cyclical nature of airline performance and how when things get good (like low fuel prices) they start doing silly competitive things and its like a race to the bottom again ...I just can't this image out of my mind

This "cyclical nature" surely still need to account for growth of the company year on year. The low from 'one cycle' should surely not reflect the low for another if the company has had significant growth (NTA or otherwise) since then. But then again, what do I know.....could just be wishful thinking... Im young and naive and have caught this 'falling knife' into over-exposure oblivion

[RTM]

With all this talk of the cyclical nature of airline performance and how when things get good (like low fuel prices) they start doing silly competitive things and its like a race to the bottom again ...I just can't this image out of my mind

Thanks for the graph Winner, so if one is interested in a decent dividend, which I am sure will be encouraged by our government, one can simply hold the shares and know that they are cyclical and will rise again in the future. Or are "we" predicting that the dividend will drop significantly as well ?
Disc: Holding more than I would like.

[Beagle]

With all this talk of the cyclical nature of airline performance and how when things get good (like low fuel prices) they start doing silly competitive things and its like a race to the bottom again ...I just can't this image out of my mind

That image encapsulates the effects of the GFC...many companies got smashed during the GFC even the seemingly invincible Ryman. Stock is trading very close to projected NTA as at 30 June 2016...no need to panic or fret, the world isn't ending anytime soon.

[winner69]

That image encapsulates the effects of the GFC...many companies got smashed during the GFC even the seemingly invincible Ryman. Stock is trading very close to projected NTA as at 30 June 2016...no need to panic or fret, the world isn't ending anytime soon.

It was heading down before the GFC hit

Maybe, just maybe, it is telling us that the next global crisis is about to hit us?

[brend]

Cathay Pacific under pressure.

http://www.bloomberg.com/news/articles/2016-08-15/cathay-profit-margin-under-pressure-as-fuel-hedging-losses-mount

also some impact for AIR

"Also, the Hong Kong airport plans to increase parking and landing fees by as much as 27 percent for airlines starting Sept. 1" from the article.

Cathay yields must be under extreme pressure. doing some personal flight browsing I found....$2,600 return for AKL into mainland china (2 flights via hk) for 2 adults + 1 child vs $3,600 on AIR to shanghai

[workingdad]

also some impact for AIR

"Also, the Hong Kong airport plans to increase parking and landing fees by as much as 27 percent for airlines starting Sept. 1" from the article.

Cathay yields must be under extreme pressure. doing some personal flight browsing I found....$2,600 return for AKL into mainland china (2 flights via hk) for 2 adults + 1 child vs $3,600 on AIR to shanghai

Those airport charges will apply across the board so everyone will need to increase the fares to accommodate it as they cant absorb it with current climate.

With their hedging at over $80 a barrel I am not surprised they are suffering...... I think its great, the more the competition hurts the more likely they will be reconsidering expansion plans into our neck of the woods. AIR has managed its hedging very well which will help future bottom lines and no signs of a big oil price recovery just yet. I don't see the doom and gloom in the aviation industry as far as AIR is concerned. Yes its not the boom of last year but its not exactly falling off a cliff.

[Beagle]

It was heading down before the GFC hit

Maybe, just maybe, it is telling us that the next global crisis is about to hit us?

AIR management confident yields will normalise in FY18 after new entrants to routes in this part of the world get sick of flying here for nothing. All airlines discount the heck out of new routes to build business, i.e. opening specials, they don't last forever. I still reckon average analyst forecasts are way too optimistic for FY17 though. I reckon $500-$600m before tax.

[Biscuit]

...... I think its great, the more the competition hurts the more likely they will be reconsidering expansion plans into our neck of the woods.

My flight to Europe next month is AIR then Cathay, so linked to some extent, not just competition

[couta1]

Instos had another good day today, their selling pattern is so predictable, must be a bit of fun for the one in charge of the drip feed numbers throughout the day.(I wonder if they get extra commission if they manage to drip feed more than the target for the day) Mustn't be so cynical.

[Snow Leopard]

I remain baffled that the dominant research philosophy practiced by AIR holders with regard to the airline industry appears to be Wishful Thinking.

Best Wishes
Paper Tiger

[workingdad]

I remain baffled that the dominant research philosophy practiced by AIR holders with regard to the airline industry appears to be Wishful Thinking.

Best Wishes
Paper Tiger

I remain baffled that you keep jumping in here with such comments. From a senior member such as yourself I would have thought you held yourself to a higher standard that poking a stick around again and again with pointless and unconstructive comments. Perhaps PT you could take my comment on board and find the dignity becoming someone of the obvious high standing you consider yourself to be.

I have found a lot of the informative considered posts you have amassed to be beneficial on many an occasion but as a person on here with no bias perhaps you will give my comment above due consideration...... or perhaps not.....

[couta1]

I remain baffled that you keep jumping in here with such comments. From a senior member such as yourself I would have thought you held yourself to a higher standard that poking a stick around again and again with pointless and unconstructive comments. Perhaps PT you could take my comment on board and find the dignity becoming someone of the obvious high standing you consider yourself to be.

I have found a lot of the informative considered posts you have amassed to be beneficial on many an occasion but as a person on here with no bias perhaps you will give my comment above due consideration...... or perhaps not..... A very considered post indeed. They say you can't teach an old dog new tricks but I myself have always found cats to be the most stubborn of creatures.

[Longhaul]

I remain baffled that the dominant research philosophy practiced by AIR holders with regard to the airline industry appears to be Wishful Thinking.

Best Wishes
Paper Tiger

I find these comments useful although I can understand holders may not enjoy reading them.

Sometimes I read the AIR thread and think "wow, what a great opportunity", and other times I think "why go there".

We need all points of view to have an robust discussion and at the rate this thread moves we need regular comments from both sides.

Personally I've traded AIR once and got out with a small profit, but this stock is a complete mystery to me and I think there are better options that require less crystal-ball gazing.

Just my two cents.

[Beagle]

I find these comments useful although I can understand holders may not enjoy reading them.

Sometimes I read the AIR thread and think "wow, what a great opportunity", and other times I think "why go there".

We need all points of view to have an robust discussion and at the rate this thread moves we need regular comments from both sides.

Personally I've traded AIR once and got out with a small profit, but this stock is a complete mystery to me and I think there are better options that require less crystal-ball gazing.

Just my two cents.

There's useful informative counter arguments that make for an interesting and lively debate and then there's Plain Trolling. There's a clear difference.

There's an element of doubt in all companies future performance, some more than others as is the case here. The thing for investors to debate in a healthy robust way is whether that element of doubt is already sufficiently reflected, (maybe over or under) in the forward PE of about 4.6 whereas other airlines who are also facing extra competitive and yield pressures are generally trading on forward PE's of around 6.

Analysts know nothing right PT ?

Average analyst forecasted earnings before tax for FY17 is $749m Average forecast earnings 47.8 cps Forward PE at $2.19 = 4.58 Average forecast dividend yield 9.57% fully imputed = 13.3% gross.

Yeap, I'm basing my investment in AIR on wishful thinking, thin AIR and blind hope LOL. Even if earnings are 30% lower than average analyst forecast, (which I think they will be), the investment case is still very sound in my opinion.

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

[forest]

Spot the trend here, competition has an effect.
All yields for the financial year to date,

Nov-15 Group-wide yields were down 4.5%
Dec-15 Group-wide yields were down 4.6%
Jan-16 Group-wide yields were down 4.9%
Feb-16 Group-wide yields were down 4.7%
Mar-16 Group-wide yields were down 5.3%
Apr-16 Group-wide yields were down 5.5%
May-16 Group-wide yields were down 5.5%
Jun-16 Group-wide yields were down 5.7%

[winner69]

Spot the trend here, competition has an effect.


Nov-15 Group-wide yields were down 4.5%
Dec-15 Group-wide yields were down 4.6%
Jan-16 Group-wide yields were down 4.9%
Feb-16 Group-wide yields were down 4.7%
Mar-16 Group-wide yields were down 5.3%
Apr-16 Group-wide yields were down 5.5%
May-16 Group-wide yields were down 5.5%
Jun-16 Group-wide yields were down 5.7%

Be interesting how new year starts eh

Probably continue the trend and be >5.7%

[BIRMANBOY]

That's independent....not stubborn, Couta. Birmans are extremely amenable (as long as their desires are catered too...:D.. Tigers are obviously a little more difficult but yes, hard to argue with a rampant tiger even if he is closer to Tigger than Tiger.
A very considered post indeed. They say you can't teach an old dog new tricks but I myself have always found cats to be the most stubborn of creatures.

[Beagle]

Spot the trend here, competition has an effect.


Nov-15 Group-wide yields were down 4.5%
Dec-15 Group-wide yields were down 4.6%
Jan-16 Group-wide yields were down 4.9%
Feb-16 Group-wide yields were down 4.7%
Mar-16 Group-wide yields were down 5.3%
Apr-16 Group-wide yields were down 5.5%
May-16 Group-wide yields were down 5.5%
Jun-16 Group-wide yields were down 5.7%

You might like to consider the monthly cost of jet fuel consumed as it came down and AIR's previous expensive fuel hedges came off, their average cost in the first half was circa $U.S.60 barrel. If such information were available you'd probably find their net profit from operations remained broadly consistent....probably why despite these yield reductions they've retained their profit forecast before unusual items of $800m before tax. Fuel is roughly 20% of their operating cost so if the cost has halved from the previous year, (they locked in maximum allowable hedging at very close to the bottom of the oil cycle in January around U.S$30 barrel) surely its not all that difficult to understand they're making excellent money notwithstanding the yield decline. At the risk of being Dogmatic people might like to consider if a super low forward PE of only 4.6 covers an absolute multitude of potential competition evil's !

BB you should stop passing off your time expired uneaten jellymeat to other cats, its no good for them.

[forest]

Roger we both look at AIR differently at this part of the business cycle, you put more importance on the fuel cost reduction, some of us see group yields and competition a more important measure. This makes the market :).

[couta1]

That's independent....not stubborn, Couta. Birmans are extremely amenable (as long as their desires are catered too...:D.. Tigers are obviously a little more difficult but yes, hard to argue with a rampant tiger even if he is closer to Tigger than Tiger. Thanks for the correction BB, much appreciated. I see there's a flying Tigger for sale on Trademe, you attach him to the ceiling and he fly's around to his hearts content without leaving the room but hey we have no need of such a toy around here, now do we.

[Beagle]

Roger we both look at AIR differently at this part of the business cycle, you put more importance on the fuel cost reduction, some of us see group yields and competition a more important measure. This makes the market :).

Fair enough Forest but the fact is yield and fuel costs are inextricably linked matters in the aviation industry so to focus on one thing risks myopic vision but as you say it takes two sides to make a market, we can certainly agree on that :)

[Beagle]

Be interesting how new year starts eh

Probably continue the trend and be >5.7%

Delta's yields were down 7% year on year in July which shocked the market and yet they still trade on a forward PE of 6, Hmmm. That's with heaps of extra competition from the Govt owned sand airlines encroaching on their territory. No love lost between Qatar and Delta I tell ya. They fight like cats and dogs. http://travelskills.com/2016/04/18/delta-disses-qatar-quandary/

[skid]

I just read(at the dentist office in Thailand,yesterday)that Thai air has made a loss due to new competition from discount airlines----food for thought.

disc. they are one of the best Ive flown with,but you cant beat cheap, sometimes.---We flew MAL --they were good,with great service--had to layover in KL,which was the only downside(a few extra hrs to get to Bkk---Thai is direct)--but with a savings of $500 it was worth it.

[skid]

Delta's yields were down 7% year on year in July which shocked the market and yet they still trade on a forward PE of 6, Hmmm. That's with heaps of extra competition from the Govt owned sand airlines encroaching on their territory. No love lost between Qatar and Delta I tell ya. They fight like cats and dogs. http://travelskills.com/2016/04/18/delta-disses-qatar-quandary/

Is it good news that others are down more than AIR or bad news that the airline industry is not doing well atm?

What Im seeing is a major fall for AIR(yes,I got caught as well) and no bounce.--and not much room for markets to appreciate?

[emveha]

Is it good news that others are down more than AIR or bad news that the airline industry is not doing well atm?

All is not gloomy in the airline industry. Orders at Farnborough this year totalled $120bn (down from $168bn two years ago but still above expectations). Boeing's market outlook for the next 20 years anticipates demand for 39620 new airplanes valued at $5.9tn. No new order from AIR but we know that they have renewed their fleet already. Even with concurrence knocking at the door, I am confident in the future of AIR in the long term.

[Beagle]

Is it good news that others are down more than AIR or bad news that the airline industry is not doing well atm?

What Im seeing is a major fall for AIR(yes,I got caught as well) and no bounce.--and not much room for markets to appreciate?

Customers have to some extent got over the novelty of cheaper fares so in effect the fuel price advantage no longer exists. World-wide demand for air travel according to IATA is still growing at 5% per annum and its anticipated that'll continue over the long term. Its all already factored into the record low PE in my opinion. Earnings could halve in FY17, (I'm not suggesting they will) and AIR would still be trading on a PE that's well below its ten year average of about 11. Some stocks trading on super high PE's have perfection already built into the price, AIR obviously isn't one of them.

Best to compare its forward PE of 4.6 with other industry players. QAN the best comparison. AIR will still be flying in another 76 years time.

[Snow Leopard]

Ramping:

You might like to consider the monthly cost of jet fuel consumed as it came down and AIR's previous expensive fuel hedges came off, their average cost in the first half was circa $U.S.60 barrel. If such information were available you'd probably find their net profit from operations remained broadly consistent....probably why despite these yield reductions they've retained their profit forecast before unusual items of $800m before tax. Fuel is roughly 20% of their operating cost so if the cost has halved from the previous year, (they locked in maximum allowable hedging at very close to the bottom of the oil cycle in January around U.S$30 barrel) surely its not all that difficult to understand they're making excellent money notwithstanding the yield decline. At the risk of being Dogmatic people might like to consider if a super low forward PE of only 4.6 covers an absolute multitude of potential competition evil's !

BB you should stop passing off your time expired uneaten jellymeat to other cats, its no good for them.


Research:

Fuel Hedging Announcements provide great insights for those of you who think that spreadsheets can be fun, and here are a couple of highlights for you:

FY17 Estimated Fuel Consumption is about 6.6% greater than FY16 (c.f. FY16 to FY15 was about 7.6% greater).

Whereas this time last year (Final Quarter of FY15), AIR had only hedged about 23% (1H 44% / 2H 2%) of their fuel estimates for the FY16 year,
Now, as we approach the end of FY16, they have already hedged 50% (1H 83% / 2H 22%) of FY17's estimated fuel.

I wonder how their currency hedging is going?

Best Wishes
Paper Tiger

PS The hedge Brent but burn Jet Fuel :confused:

The average cost of a barrel in the first half year was approximately US$51.
The average cost of a barrel in the second half year was approximately US$42.

But you do not just buy a barrel of crude and pour into the engine, there are many more fuel related expenses, hedging costs, storage and handling costs etc.

The half year itemizes Fuel as $484M (or 25.6%) of the $1,887M operating expenses.

Best Wishes
Paper Tiger

[brend]

All is not gloomy in the airline industry. Orders at Farnborough this year totalled $120bn (down from $168bn two years ago but still above expectations). Boeing's market outlook for the next 20 years anticipates demand for 39620 new airplanes valued at $5.9tn. No new order from AIR but we know that they have renewed their fleet already. Even with concurrence knocking at the door, I am confident in the future of AIR in the long term.

The 777 fleet will need be replaced in the next decade or so.

I remember this article a few years ago.

http://www.ausbt.com.au/air-new-zealand-considers-boeing-777x-vs-airbus-a350

[Tony Two Gloves]

Share price doing nicely today, the word is finally out about the massive divvy's....... (ramp, ramp, ramp)

[skid]

I was wondering if cathey Pacifics massive loss would rub off on other airlines,but looks like the divey has won out for AIR.

Customers NEVER get over cheap fares IMO---It will always be a big factor,so the question is ''what does AIR do to earn the expensive fares?"

[Beagle]

Ramping:



Research:


The average cost of a barrel in the first half year was approximately US$51.
The average cost of a barrel in the second half year was approximately US$42.


But you do not just buy a barrel of crude and pour into the engine, there are many more fuel related expenses, hedging costs, storage and handling costs etc.

The half year itemizes Fuel as $484M (or 25.6%) of the $1,887M operating expenses.

Best Wishes
Paper Tiger

I know what I'd like to do with a barrel of oil sometimes...but thank you for these wonderful insights I never would have gained from over 20 years of acting for private operators in the aviation industry, (you forgot one of the biggest costs (refining costs). Meant to say fuel is roughly 20% of revenue. Great day when the pussy cat gets to correct the dog isn't it.

Anyway yes back to AIR...I think some investors are positioning themselves for the forthcoming dividend feed, those already in are "well positioned"

Speaking of being well positioned, real tigers seem to have the answer on a hot day http://www.msn.com/en-nz/news/photos/pictures-of-the-week-aug-12-2016/ss-BBvyGjy?ocid=spartandhp..maybe there's a message in that for you ?

[Tony Two Gloves]

Hmmm just pondering potential tax implications........

If I sell my AIR and make $15K all good I will be taxed on the gain. If I hold get a nice fully imputed divvy and the SP drops back to break even and I sell I will not be taxed? Is this correct

Thoughts?

[Beagle]

Hmmm just pondering potential tax implications........

If I sell my AIR and make $15K all good I will be taxed on the gain. If I hold get a nice fully imputed divvy and the SP drops back to break even and I sell I will not be taxed? Is this correct

Thoughts?

If you've already declared yourself as a trader to the IRD or bought with the specific intention of selling and want to declare the trade then I agree with you.

[Tony Two Gloves]

If you've already declared yourself as a trader to the IRD or bought with the specific intention of selling and want to declare the trade then I agree with you.
Thanks Roger, thought that would be the case. Am committed to hang in for the divvy and see how the land lies in the aftermath of this, hoping that it will recover to pre divvy price in 3 - 4 weeks. Still think it should be $2.40 - $2.50, but I also thought Mortgage rates would never be under 4%!

[Jaa]

Qantas attacking Air NZ in Christchurch with new daily services to Brisbane (30 Oct) and Melbourne (4 Dec) and pushing their connections on to Asia, Europe and the US.

[Beagle]

Thanks Roger, thought that would be the case. Am committed to hang in for the divvy and see how the land lies in the aftermath of this, hoping that it will recover to pre divvy price in 3 - 4 weeks. Still think it should be $2.40 - $2.50, but I also thought Mortgage rates would never be under 4%!

Agree with you mate on the price thing. Somewhat off topic but it occurred to me today, its a curious thing. We live in a strange world with these ultra low interest rates. People think nothing of loading up on debt to buy Auckland houses when they've already had a massive price run and if they don't get a P addict or someone who'll wreck their investment property in some other way they might be lucky to get a yield after expenses of 3%, less tax of course.

On the other hand its frowned upon to think of loading up on debt and buying a stock like AIR or HLG which have been beaten down and are paying gross returns inclusive of imputation credits of early to mid teens, (percent per annum).

Massive positive carry trade on a beaten down liquid asset vs cash flow negative on a risky less liquid asset that requires tons of your own time managing and repairing and has already had a massive positive run.

The world is a crazy place. That said I am too old / too risk averse to bother with debt anymore no matter how compelling the investment opportunity. Disc: Reason for semi off topic rant, nearly fully invested and part of me wishes I had the nerve to gear up for these outstanding opportunities.

[Raz]

Qantas attacking Air NZ in Christchurch with new daily services to Brisbane (30 Oct) and Melbourne (4 Dec) and pushing their connections on to Asia, Europe and the US.

I see they are looking at direct flights Perth to EU, that must be pushing 18 hour plus range for the 787 when they get them into their fleet, Sydney direct to Chicago thou would be handy.

[Raz]

Agree with you mate on the price thing. Somewhat off topic but it occurred to me today, its a curious thing. We live in a strange world with these ultra low interest rates. People think nothing of loading up on debt to buy Auckland houses when they've already had a massive price run and if they don't get a P addict or someone who'll wreck their investment property in some other way they might be lucky to get a yield after expenses of 3%, less tax of course.

On the other hand its frowned upon to think of loading up on debt and buying a stock like AIR or HLG which have been beaten down and are paying gross returns inclusive of imputation credits of early to mid teens, (percent per annum).

Massive positive carry trade on a beaten down liquid asset vs cash flow negative on a risky less liquid asset that requires tons of your own time managing and repairing and has already had a massive positive run.

The world is a crazy place. That said I am too old / too risk averse to bother with debt anymore no matter how compelling the investment opportunity. Disc: Reason for semi off topic rant, nearly fully invested and part of me wishes I had the nerve to gear up for these outstanding opportunities.

The thing is Rodger people who are not too switched on have made money in property in the last few years...most have no idea what can go wrong as a landlord or with property and it has come easy. Its been a one way bet for now with Government policy. However risking ones capital does not come easy to the human psyche..even if your just sit on shares and collect dividends :-)

ps the share market has also had a massive price run.

[skid]

The thing is Rodger people who are not too switched on have made money in property in the last few years...most have no idea what can go wrong as a landlord or with property and it has come easy. Its been a one way bet for now with Government policy. However risking ones capital does not come easy to the human psyche..even if your just sit on shares and collect dividends :-)

ps the share market has also had a massive price run.

I suppose one has to consider those who racked up debt to buy AIR @ $3---

I have done well with property,but have put heaps of work into it(I know all about landlord issues) but having said that ,I dont think I would be cut out for what it takes these days,having to load up on $8-900,000 debt for an average house in Auckland.

These low interest rates are doing harm to the economy imo--I personally wouldnt bank on this scenario being really long term,without damage. Major banks have got to be suffering,especially overseas---They(Fed) are not trying to raise interest rates just for fun---these low rates are a last resort with risks attached----They are hoping for a kick start and some growth and earnings--but the jurys still out ,especially with earnings in general.

Meanwhile ,its hard to think of a more competitive business than airlines-when things get to sweet--others jump in---this will be an interesting period for AIR in terms of earnings.

[RTFQ]

I see they are looking at direct flights Perth to EU, that must be pushing 18 hour plus range for the 787 when they get them into their fleet, Sydney direct to Chicago thou would be handy.

Whilst the reported range of a 787-900 is around 14,000km I don't think they could carry a commercial load that far given the enroute fuel requirements, [ ETOPS/EDTO] and fuel required on arrival. The only aircraft I am aware of operating those distances at present are 777 extended range options. Do QF have these? The 787 is not the accountants Dreamliner, due to the current cost of fuel and its initial capital cost.

[Baddarcy]

The NZ Herald is not a Qantas Q300 fan !

http://www.nzherald.co.nz/travel/news/article.cfm?c_id=7&objectid=11694936

This comment from another article:

Meanwhile Jetstar operates 50-seat Q300 turboprop aircraft on five routes in New Zealand, including to Nelson, New Plymouth, Napier and Palmerston North. A spokesman said the airline had no plans to expand its Q300 network beyond regional links.

[Beagle]

The NZ Herald is not a Qantas Q300 fan !

http://www.nzherald.co.nz/travel/news/article.cfm?c_id=7&objectid=11694936

This comment from another article:

Meanwhile Jetstar operates 50-seat Q300 turboprop aircraft on five routes in New Zealand, including to Nelson, New Plymouth, Napier and Palmerston North. A spokesman said the airline had no plans to expand its Q300 network beyond regional links.

Pretty much sums up my experience with Jetstar, I also have them on the never again list.

[winner69]

Just as well they are a monopoly

http://www.stuff.co.nz/travel/news/83302944/air-new-zealand-defends-increased-use-of-turboprop-aircraft-on-main-trunk-routes

Mind you a slow non-stop flight on one of the smaller planes Wellington Queenstown on a fine clear cloudless day in winter is a magical experience (if you have a window seat)

[Beagle]

Just as well they are a monopoly

http://www.stuff.co.nz/travel/news/83302944/air-new-zealand-defends-increased-use-of-turboprop-aircraft-on-main-trunk-routes

Mind you a slow non-stop flight on one of the smaller planes Wellington Queenstown on a fine clear cloudless day in winter is a magical experience (if you have a window seat)

And they're often on special on www.grabaseat.co.nz for $59 each way you lucky dog.

I can't see the issue here. 10 minutes extra flight time in a turboprop and the trade off is more frequent service with up to 20 return flights a day. The only thing I've found is the seat bottom on the seats in an ATR600's is quite firm. Longer flights could be a little more uncomfortable but the original complainant was only talking Christchurch to Wellington which is a short hop in anyone's language.

That businessman should try flying Jetstar and then he'd having something genuine worth complaining about.

[Raz]

Just as well they are a monopoly

http://www.stuff.co.nz/travel/news/83302944/air-new-zealand-defends-increased-use-of-turboprop-aircraft-on-main-trunk-routes

Mind you a slow non-stop flight on one of the smaller planes Wellington Queenstown on a fine clear cloudless day in winter is a magical experience (if you have a window seat)

The operative word is a fine day, when the weather is bad not such a consistent service...twice I have not been able to get into Queenstown on them and I know a few people who got sent back not being able to land into Wellington. The regional terminal does not have a sufficient koru lounge, the main lounge is upstair through security.. which hacks off many business people down here..plus the cold walk out of the tarmac as no airbridges.... has raised comment. Air can say suck it up however it is simple economics vs EI management tradeoff. The result is short term profit may be the result however it comes with a potential loss of customer loyalty when people shop around for international flights from the south... they do not forget being shafted:-)

ps In mid-winter people want to fly the ABs to ensure they get to their destination on time.

[Snow Leopard]

Competition from Emirates is getting intense:

http://i7.photobucket.com/albums/y269/TheTigerWithNoName/SharetraderImages/NZX-AIR/Doudou.png

This cutie can be yours for 4,000 Miles (down from 5,400) (https://www.emirateshighstreet.com/Doudou+et+Compagnie+Dog+Soft+Toy+with+Blanket-p-3285.html).

Best Wishes
Paper Tiger

[Rep]

The only aircraft I am aware of operating those distances at present are 777 extended range options. Do QF have these? The 787 is not the accountants Dreamliner, due to the current cost of fuel and its initial capital cost.

Qantas don't operate the Boeing 777 at all and neither does Jetstar

[workingdad]

Tourism and migration still trucking along.

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11697111

[Raz]

Qantas don't operate the Boeing 777 at all and neither does Jetstar

found it... quote from Allan..some subject to.

http://www.traveller.com.au/qantas-plans-nonstop-flights-from-perth-to-london-gk6yqc

[RTFQ]

found it... quote from Allan..some subject to.

http://www.traveller.com.au/qantas-plans-nonstop-flights-from-perth-to-london-gk6yqc

AJ strategically uses the word "potentially" in the article. The 787 still hasn't met the sales specs in regard to range, also on long flights I am told it can't carry any freight when full of passengers. I believe AIR looked to use it direct to Chicago only 13200km but at the time it wouldn't commercially work for the return flight.

[winner69]

AIR has an up week

That's good following last weeks downer

[Beagle]

Tourism and migration still trucking along.

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11697111

11% growth in tourism is very robust !

[skid]

AJ strategically uses the word "potentially" in the article. The 787 still hasn't met the sales specs in regard to range, also on long flights I am told it can't carry any freight when full of passengers. I believe AIR looked to use it direct to Chicago only 13200km but at the time it wouldn't commercially work for the return flight.

I wonder how many have actually spent that long on a plane--It may sound good (direct) but after 12-13hrs many will be screaming for a layover.

[Marilyn Munroe]

Couple of things

Boeing 777
A popular reliable aircraft with large numbers in service. Queer and Nasty Airlines have never flown them. They got sucked in by the promises of Boeing as a launch customer for the 787 which was delayed for years. They got stuck operating old thirsty 767’s and 747’s when fuel prices were high.

Turbo props
I like turbo props, mostly. I like the take-offs where the engines are run up full revs and the acceleration as fuel is increased and the pitch of the propellers increased to bite at the air. You are closer to the ground so the scenery is better. What I do not like is the thrombosis inducing seating on Cullen Airlines turbo props and the flights can drag on. The flight from CHC --> HlZ goes on forever.

My favourite turbo props were the Cullen Airlines Fairchild Metroliners. Their size gave you the illusion you were doing real flying.

Turbo props use less fuel on a passenger/kilometre basis. If fuel prices go through the roof again expect turbo props to become more popular with airlines on shorter jet hops like WLG --> CHC.

Boop boop de do
Marilyn

[BeeBop]

I wonder how many have actually spent that long on a plane--It may sound good (direct) but after 12-13hrs many will be screaming for a layover.

I fly 14 hour legs four times per year with a child (in economy) and it is far far better than having a layover. In fact we are looking forward to the new 18 hour route coming to Auckland in February. Seven years ago when we first shifted overseas we would spend around 36 hours travelling door to door (southern NZ destination) including the layovers we had to have. More recently that time has dropped to around 28 hours due to more direct routes at cheaper prices, we may be able to get the trip down to 24 hours including airport time next year. Long sectors that cut out layovers can be very very good on the right airline in the right aircraft. One detests transit security checks in massive crowded airports.

[Raz]

I fly 14 hour legs four times per year with a child (in economy) and it is far far better than having a layover. In fact we are looking forward to the new 18 hour route coming to Auckland in February. Seven years ago when we first shifted overseas we would spend around 36 hours travelling door to door (southern NZ destination) including the layovers we had to have. More recently that time has dropped to around 28 hours due to more direct routes at cheaper prices, we may be able to get the trip down to 24 hours including airport time next year. Long sectors that cut out layovers can be very very good on the right airline in the right aircraft. One detests transit security checks in massive crowded airports.


If you fly a lot you tend to adapt to sleeping on flights, on a typical 12 hour flight I will sleep 8-9 hours so 14-18 would be ok, depending on time of day.

[Grimy]

I fly 11 or 12 hour legs a couple of times a year. I'd be okay with a few more hours rather than a layover. Once you're in that zoned-out space (after about 5 hours) I couldn't care less how much longer the flight is going to be! I much prefer the long legs as day flights though. I'm never that good on the overnighters.
Having said that, our trip over to Tonga a couple of weeks back (AIR) was 2 hours too long when the turbulence started an hour into the flight. The ride was bumpier and scarier than the SP movements of late!
I was glad that the one hour departure delay due to "Engineering Requirements" (why can't they just say the plane is broke and we've got guys on a wet miserable Saturday night trying to get it going?) became a one and a half hour delay when they decided to get us another plane.........I wouldn't want it to happen at this (Tonga) end.

[skid]

I fly 14 hour legs four times per year with a child (in economy) and it is far far better than having a layover. In fact we are looking forward to the new 18 hour route coming to Auckland in February. Seven years ago when we first shifted overseas we would spend around 36 hours travelling door to door (southern NZ destination) including the layovers we had to have. More recently that time has dropped to around 28 hours due to more direct routes at cheaper prices, we may be able to get the trip down to 24 hours including airport time next year. Long sectors that cut out layovers can be very very good on the right airline in the right aircraft. One detests transit security checks in massive crowded airports.

I guess its the lesser of 2 evils---our recent layover in Kuala Lumpur was a bit much (its a real drag when they force you to go through customs+ about 4 security checks)At one point we went through a check, and then another about 5 min walk from there(???)--But personally after 12-13hrs on a plane Im getting pretty antsy(I envy those who sleep most of that time) 18hrs is alot different than 13hrs,but maybe with the new planes its not so bad (have'nt been on one yet)

They have made alot of progress on the new planes--maybe the airports is what they need to work on next.
IMO they are moving in the wrong direction in their attempts to change them into giant shopping malls(Kuala Lumpor looks more like the USA in that regard)

[Snow Leopard]

I guess its the lesser of 2 evils---our recent layover in Kuala Lumpur was a bit much (its a real drag when they force you to go through customs+ about 4 security checks)At one point we went through a check, and then another about 5 min walk from there(???)--But personally after 12-13hrs on a plane Im getting pretty antsy(I envy those who sleep most of that time) 18hrs is alot different than 13hrs,but maybe with the new planes its not so bad (have'nt been on one yet)

They have made alot of progress on the new planes--maybe the airports is what they need to work on next.
IMO they are moving in the wrong direction in their attempts to change them into giant shopping malls(Kuala Lumpor looks more like the USA in that regard)

Sounds like you flew from where ever to where ever via KLIA2 with either two different airlines or both legs were with 'Air Asia'.

There are several airlines called Air Asia and most of them are point to point only.

Best Wishes
Paper Tiger

[emveha]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11698387

[see weed]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11698387
So, where to from here? looks like buyers building up. Maybe 10c gain this morning:).

[ohpark0119]

So, where to from here? looks like buyers building up. Maybe 10c gain this morning:).

hopefully more than 10c. also would be great if they share the profit via fat divvy lol

[see weed]

hopefully more than 10c. also would be great if they share the profit via fat divvy lol
We all be laughing all the way to the bank;).

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11698387

After all the negative talk, that a breath of fresh AIR.

[Snow Leopard]

Operating Statistics & Fuel Hedging out.

Hedging Good, Op Stats - Interesting

Note the change from Yield to RASK

Best Wishes
Paper Tiger

[babymonster]

hedging is very nice... both RASK and yield are down.. it's going to be tougher and tougher

[bull....]

looks like losing money on hedges

[Beagle]

looks like losing money on hedges

Incorrect, they're just on $20m in the money mark to market value of hedges for FY17 so they don't have a problem with that particular issue. Outlook with the annual result or in discussions in the conference call on Friday could be interesting.

[stoploss]

Good work AIR NZ.

http://www.stuff.co.nz/travel/news/83421064/air-nz-staff-comfort-grieving-wellington-woman-nikki-griffith

[brend]

Interesting comments in the release on the capital spend/refreshing planes.

777-300 fleet going for a full refurb, space seat being dumped. This will decrease plane weight and increase seating.

3x 787-900 planes will have a different config to what they currently have. More business and prem seating.

[Leftfield]

looks like losing money on hedges

Please explain how you reach this conclusion? Total "net compensation from hedges" for FY17 seems to be approx $19.8 mill.

To me the table seems to show that AIR have reduced their hedging from 80% to 34% in light of reduced prices. Seems a prudent move to me? Roll on Friday.

[Beagle]

Good work AIR NZ.

http://www.stuff.co.nz/travel/news/83421064/air-nz-staff-comfort-grieving-wellington-woman-nikki-griffith

Thanks for sharing this lovely story.

[Beagle]

Please explain how you reach this conclusion? Total "net compensation from hedges" for FY17 seems to be approx $19.8 mill.

To me the table seems to show that AIR have reduced their hedging from 80% to 34% in light of reduced prices. Seems a prudent move to me? Roll on Friday.

AIR are close to their maximum self imposed limit on hedging forward. They have taken some excellent hedge positions earlier this year when oil was close to $30 and its nice to see them in the money, they'll need that with this new era of more intense competition.

[Snow Leopard]

Generally Airlines lose money by hedging fuel.

Sometimes it works for them and sometimes it works against them.

Effectively they are buying insurance that provides a defined range to their future costs of an often volatile major part of their expenses.
Over a multi-year time frame the cost of hedging exceed any net savings.
What airlines are buying is a degree of certainty.

So last year AIR 'lost' money by hedging fuel.
This current year they are, at present, 'making' a little but where they end up at the end of it, well we will have to wait and see.

Some airlines do not hedge and with the recent dramatic fall in the price of oil not hedging at all has become a popular topic in the industry.
The discussion will probably change if there is a sudden upswing in the price.

But at the end of the day the higher the cost of a barrel the higher the fuel bill even if tempered by company foresight.

Best Wishes
Paper Tiger

[Beagle]

The dog finds himself agreeing with the resident cat again, (yes this is scary). At the end of the day there's always a significant cost to hedging, (see latest spreadsheet data they presented on cost of hedges), so in the long run the airline must lose from its hedging program. Chinese Govt controlled airlines for example are prohibited from hedging so they can react expeditiously to changing market conditions.

Based on some analysis I did, (yes can you believe it PT I've done some), Air sell about 2 months forward on their average booking, (i.e.at any one time they have approx. one sixth of annual sales in forward bookings).

Given sales on average are for travel fairly close to the point at which the expenditure on jet fuel is incurred and given present low fuel prices and huge hedge losses last year by most airlines its perhaps entirely unsurprising that this is a hot topic for discussion in the industry, why bother hedging especially when the cost of same relative to the price of fuel has rarely been higher ?

Perhaps this new highly competitive environment is a good opportunity for AIR's management to review their hedging policy ? Perhaps a new lower level of hedging going forward, say no more than one third of expected fuel consumption for the next six months, (effectively a maximum of 2 months 100% hedging, equal to the approximate amount of forward bookings at any one time) is appropriate going forward ?

Also looking to hedge the Singapore Jet fuel cost in a way closer than Brent futures might be more optimal ? The cost to refine and distill the oil can vary a lot as we all know.

Such a revised policy would effectively nicely match the timing of new sales with new fuel purchases and would minimise hedging costs. Good topic to bring up at the annual meeting I reckon.

Raz - you going ?...maybe you could raz them up a bit about this :)

[Jaa]

That sounds pretty sensible Roger.

As a shareholder, I get tired of companies messing up hedging and claiming it as an abnormal cost. Let alone all the hidden costs to pay people salaries or outsiders fees just to get it wrong. I just want them to pay the market price.

There are other ways that airlines make bets on the price of fuel though. The increase in business and premium seating will be partly driven by an expectation of continued lower fuel prices in the next few years. Which aircraft to buy is also fuel price dependent.

[babymonster]

air is trying to target wealthy individuals, moving away from budget competitions. Hopefully it will workout. It can work for some companies not sure about airlines tho.

[Beagle]

https://www.nzx.com/companies/AIR/announcements/287623

My read: Yield is down 9.2% which is very disappointing but RPK growth is up 8.5% so revenue overall is broadly neutral as one more or less offsets the other but obviously they're flying more planes further for very similar gross returns as last year. As mentioned earlier today, just as well they have really, really cheap oil futures locked in for 80% of anticipated fuel burn for 1H FY17.

Greenies and left wingers will be pleased to see AIR passing on the full benefit of lower fuel prices now and probably a bit more as well for good measure. The 33 days thing for July last year looks stupid and is. I realise that just coincides with their reporting period last year but it looks untidy and creative and needs to be tidied up in my opinion.

[Snow Leopard]

To throw some more figures into the ring, I calculate for July YoY that:

Short-haul revenue is down 0.6-0.7% (i.e. a bit);
Long-haul revenue is down 0.06-0.07% (i.e. a tiny bit).

So far, fuel costs will be lower than last year but other operating costs higher, but I have not quantified them.

Best Wishes
Paper Tiger

[winner69]

To throw some more figures into the ring, I calculate for July YoY that:

Short-haul revenue is down 0.6-0.7% (i.e. a bit);
Long-haul revenue is down 0.06-0.07% (i.e. a tiny bit).

So far, fuel costs will be lower than last year but other operating costs higher, but I have not quantified them.

Best Wishes
Paper Tiger

YonY how can short haul revenues be 'up a bit' when both reported RPKs and RASK are down. My quick mental algebra and arithmetic comes to short haul revenues down about 8%/9%

Ah, its all to do with this July having only 31 days compared to 33 days last year so we'll catch up when we have a long month soon

Nothing to do with year but did you know that July 2014 had 27 days

And this August should be a boomer as last two Augusts have only had 28 days

[Raz]

Some will see this as the start of the discretionary spend..when it really is needed :-)

http://www.stuff.co.nz/business/industries/83447735/air-new-zealand-to-invest-100m-in-fleet-upgrade

I'm going to be stuck in LA now for annual meeting, I was already thinking up what would be the best question to ask from the floor..anyone else going to attend, the seating/cabin experience was alrady on possibles list and the hedge policy certainly has merit...

[workingdad]

Some will see this as the start of the discretionary spend..when it really is needed :-)

http://www.stuff.co.nz/business/industries/83447735/air-new-zealand-to-invest-100m-in-fleet-upgrade

I'm going to be stuck in LA now for annual meeting, I was already thinking up what would be the best question to ask from the floor..anyone else going to attend, the seating/cabin experience was alrady on possibles list and the hedge policy certainly has merit...

I wonder how that will affect the stats, with less available seats but higher premiums for them.

Statistically responding to the shift in demand on this is a good thing, also anchors the thoughts that business customers will continue to be a core component of revenue and like most businesses they tend to stick with the same supplier based on experience, service and linking the access to lounges - well that's my rationale flying with them and the airpoints for the family trips away.

[Beagle]

Some other things to throw into the mix. Average fuel cost in 1H FY16 was based on U.S$60 barrel. A lot of hedges were put in place for 1H FY17 in January 16 when oil was U.S.$30 barrel so fuel will be dramatically cheaper this half.

Further, the currency in 1H FY16 averaged around 65 cents, whereas we're now over 10% higher so not only will fuel be cheaper again but all their other costs based in $U.S.

Initial conclusion: I don't think the yield drop is quite as bad as it first appears in terms of the net effect on the bottom line given other quite significant cost savings. First Impressions - I am still comfortable with my forecast operating profit before tax for FY17 of $500 - $600m at this stage. Around $400m after tax is where I see it, eps approx. 35 cps. I think if they can earn that in this new white hot competitive market where new entrants are running "opening specials" that puts them on a forward PE of 6.4 and I think the shares are sound value at $2.25 trading cum a special and final divvy.

[Rep]

Interesting comments in the release on the capital spend/refreshing planes.

777-300 fleet going for a full refurb, space seat being dumped. This will decrease plane weight and increase seating.

3x 787-900 planes will have a different config to what they currently have. More business and prem seating.

The Space Seat in the 777... The mechanism for the legrest and the seat takes up a lot of space in the footwell, apart from my 18 month old having a nap sprawled across two space seats with his belt extender on the way to Oz, I don't think I've actually seen anyone use the space seat (that included when we went to San Francisco when boy was about 6 months old and he slept peacefully in the bassinette*) so agree it's a whole bunch of extra weight to provide a solution that doesn't seem to be used a lot. Most times I see someone sprawled across multiple seats is when the plane is half full and they have grabbed the middle berths.

* Air NZ is one of the few airlines that provides the option to book and pay for a bassinette seat selection rather than turning up on the day and rolling the roulette wheel to see if you can get one. Boy is too big now for the bassinette but after bringing him back on the A320 on our lap, I can tell you that a baby sleeping in the bassinette is much preferable to a baby unhappy about being held and awake... :eek2:

[Baddarcy]

Is it just me, or does the cost to upgrade the planes seem really expensive?

10 planes for a total of $100m. I know the seat configuration is changing but using current numbers with the 777-300 having 344 seats and 787 with 302 seats works out at a total of 3230 seats all up......3230 / $100m equals approx $31,000 per seat.

"Air New Zealand will spend $100 million upgrading its premium seat offering.

The national carrier said on Monday night that it would spend the money on increasing the number of premium seats on its Boeing 787-9 Dreamliners and refurbishing its Boeing 777-300 fleet in response to customer trends.

That investment meant the three Dreamliners scheduled to be delivered from October 2017 will already have the new cabin layout, boosting the number of business premier seats from 18 to 27 and premium economy seats from 21 to 33.

From February of next year, the carrier's entire Boeing 777-300 fleet will enter into the refurbishment programme which will include an inflight entertainment upgrade to match that available in the Dreamliners and an interior overhaul."

[Beagle]

Is it just me, or does the cost to upgrade the planes seem really expensive?


From February of next year, the carrier's entire Boeing 777-300 fleet will enter into the refurbishment programme which will include an inflight entertainment upgrade to match that available in the Dreamliners and an interior overhaul."

They will roll out the inflight entertainment upgrade and interior refurbishment throughout the planes not just in the premium section. Space seats take up to much errrr...space.

[couta1]

I will be very interested to watch and see where the SP gets to after the result and before going Ex, assuming a 20c total divvy, one would hope the price would climb to around the $2.40 ish mark. Anything much below that could mean a low $2 post Ex price IMO given the volatile and unpredictable nature of the stock. Disc-Adding more to my XOS holding this week to get my average down to $2.30 or below.

[mikeybycrikey]

After reading through some of the posts this morning about the changes to Prem Econ and Bus, and the removal of the space seat, I was looking at the AIR web site and reading about the Prem Econ offering.

The only time that I have flown Prem Econ it was in the SpaceSeat and it felt like something special. Even the pictures on the web make it look like something futuristic. The 787 and 777-200 Prem Econ seat just look like what everyone wants Economy to actually be. That is: seats with enough space.

I guess they know what they are doing.

[Beagle]

After reading through some of the posts this morning about the changes to Prem Econ and Bus, and the removal of the space seat, I was looking at the AIR web site and reading about the Prem Econ offering.

The only time that I have flown Prem Econ it was in the SpaceSeat and it felt like something special. Even the pictures on the web make it look like something futuristic. The 787 and 777-200 Prem Econ seat just look like what everyone wants Economy to actually be. That is: seats with enough space.

I guess they know what they are doing.

Agree with you although I wish I'd had the pleasure of using the spaceseat. At 18.5 inches width I wouldn't call AIR's "premium" economy anything premium if its in a regular configuration. Singapore airlines standard economy seat is 19 inches width. That's real premium economy although I would hasten to add they have a premium economy seat that's better again and really is premium economy....but like anything premium it comes at a price and you get what you pay for. Singapore airlines is never anywhere near the cheapest option.

[Raz]

After reading through some of the posts this morning about the changes to Prem Econ and Bus, and the removal of the space seat, I was looking at the AIR web site and reading about the Prem Econ offering.

The only time that I have flown Prem Econ it was in the SpaceSeat and it felt like something special. Even the pictures on the web make it look like something futuristic. The 787 and 777-200 Prem Econ seat just look like what everyone wants Economy to actually be. That is: seats with enough space.

I guess they know what they are doing.

The space seat in premium economy helped the brand gain the reputation for innovation and generated worldwide publicity however it was never economic as they mis-calculated the measurements for the capacity they had planned for...the result is back to the future for economic reasons...again customer comfort is not a consideration. It has been a continued theme for while now...the space seat is a nice seat..I liked it so much... that when on my dime I chose it over business class.

They also have a situation more people want prem. economy as a result of recognition upgrades available...

[Zaphod]

After reading through some of the posts this morning about the changes to Prem Econ and Bus, and the removal of the space seat, I was looking at the AIR web site and reading about the Prem Econ offering.

The only time that I have flown Prem Econ it was in the SpaceSeat and it felt like something special. Even the pictures on the web make it look like something futuristic. The 787 and 777-200 Prem Econ seat just look like what everyone wants Economy to actually be. That is: seats with enough space.

I guess they know what they are doing.

The new PE seat is a lot more comfortable than that which was offered pre-refit of the 772's. The Space Seat used on the 773’s has always been a polarising product, and with margins being negatively affected after additional seats were removed in order to resolve customer complaints about the product, so I'm not surprised it's being replaced. In terms of economics, the refit makes very good business sense.

The largest hard-product issue Air NZ face is the 3-4-3 Y configuration in the 772's and 773's. The configuration is extremely narrow both in terms of the seat and the aisle access and attracts many negative reviews. Many carriers are however adopting this configuration to maximise yields and reduce fares.

[Beagle]

The largest hard-product issue Air NZ face is the 3-4-3 Y configuration in the 772's and 773's. The configuration is extremely narrow both in terms of the seat and the aisle access and attracts many negative reviews. Many carriers are however adopting this configuration to maximise yields and reduce fares.

Trouble is Mr and Mrs Joe average and their kids want their dream trip to Disneyland for $999 return and then bleat like seals that their seating is not according to their dream and reality bites.

[Beagle]

So...after much hand wringing and head scratching about what to do with the funds I trimmed from CVT today I decided to increase my stake in AIR in the lead up to the result.

My instinct aligns with analyst expectations at this stage of net profit after tax of circa $400 for FY17 so EPS of approx. 36 cps and on a theoretical ex divvy price of $2.02, (2.22-0.20) looking through the forthcoming dividend, I'm basing my investment case on a forward PE of 5.6 times earnings. If they can achieve that when a range of new competitors are launching opening specials at our market then I think the company can build a base from here and I think I'm buying on a very realistic PE multiple. Management expect yield pressure to ease off in FY18, or so they said at the investor day briefing some months back. History suggests airlines discount heavily when they start new routes to build business and fill airplanes but launch specials from AIR's competitors don't usually last indefinitely.

From a straight out dividend hound perspective this was an absolute no brainer switch. For every CVT share I trimmed I have forgone a 2 cent final divvy and bought 4.5 shares in AIR x 20 cent expected divvy including the special = 90 cps. Just a "small" difference...45 times the amount of dividend :D...(yes I realise this is a bit cheeky as one is not comparing annual dividends between the two companies excluding special).

[Raz]

So...after much hand wringing and head scratching about what to do with the funds I trimmed from CVT today I decided to increase my stake in AIR in the lead up to the result.

My instinct aligns with analyst expectations at this stage of net profit after tax of circa $400 for FY17 so EPS of approx. 36 cps and on a theoretical ex divvy price of $2.02, (2.22-0.20) looking through the forthcoming dividend, I'm basing my investment case on a forward PE of 5.6 times earnings. If they can achieve that when a range of new competitors are launching opening specials at our market then I think the company can build a base from here and I think I'm buying on a very realistic PE multiple. Management expect yield pressure to ease off in FY18, or so they said at the investor day briefing some months back. History suggests airlines discount heavily when they start new routes to build business and fill airplanes but launch specials from AIR's competitors don't usually last indefinitely.

From a straight out dividend hound perspective this was an absolute no brainer switch. For every CVT share I trimmed I have forgone a 2 cent final divvy and bought 4.5 shares in AIR x 20 cent expected divvy including the special = 90 cps. Just a "small" difference...45 times the amount of dividend :D...(yes I realise this is a bit cheeky as one is not comparing annual dividends between the two companies excluding special).

Well its a question what do you call an openings special and how long they last, AUk-LAX currently is discounted by both through to the end of FY17...

[Beagle]

Well its a question what do you call an openings special and how long they last, AUk-LAX currently is discounted by both through to the end of FY17...

Its not always discounted Raz. Not everyone can plan many months ahead, something I am sure you are cognisant of.

[Rep]

I've just twigged that you are talking about the Space Seat in Premium Economy not the Sky Couch seats in the port and starboard outboard seats. Sorry completely forgotten what they were like even since the option to use them on for no cost seat select vanished about a year ago.

As for Mr and Mrs Joe Average not being happy about their seats on a return trip to Disneyland for $999 return... For those that can afford and want to pay for Premium Economy or Business, yes you can say that reality bites. The truth is also that most of the seats on a flight are occupied by the economy cabin and if you don't end up in the preferred or frequent flyer seats back there, it is pretty miserable especially if you end in the row at the back that doesn't recline next to the toilet.

[Beagle]

I've just twigged that you are talking about the Space Seat in Premium Economy not the Sky Couch seats in the port and starboard outboard seats. Sorry completely forgotten what they were like even since the option to use them on for no cost seat select vanished about a year ago.

As for Mr and Mrs Joe Average not being happy about their seats on a return trip to Disneyland for $999 return... For those that can afford and want to pay for Premium Economy or Business, yes you can say that reality bites. The truth is also that most of the seats on a flight are occupied by the economy cabin and if you don't end up in the preferred or frequent flyer seats back there, it is pretty miserable especially if you end in the row at the back that doesn't recline next to the toilet.

Agree with you but here's the thing. Mr and Mrs Joe average and especially their kids don't realise that a return journey of just on 21,000 km's for $999 is actually an incredible bargain !
It represents only 4.8 cents per RPK and AIR's cost per RPK is more than that. If it weren't for premium and business class and freight AIR could not run an airline selling seats at 4.8 cents per RPK as its below cost.
Classic case of you get what you pay for but that often doesn't stop many Mr and Mrs Joe average thinking they're entitled to better seats and meals than they get. Airlines are caught between a rock and a hard place. Many people want travel bargains but then some price conscious travellers bleat like lambs lost from their mothers that they don't get a first class experience. There's no pleasing some customers...they're the ones we should ship off to Jetstar :D

[skid]

Agree with you but here's the thing. Mr and Mrs Joe average and especially their kids don't realise that a return journey of just on 21,000 km's for $999 is actually an incredible bargain !
It represents only 4.8 cents per RPK and AIR's cost per RPK is more than that. If it weren't for premium and business class and freight AIR could not run an airline selling seats at 4.8 cents per RPK as its below cost.
Classic case of you get what you pay for but that often doesn't stop many Mr and Mrs Joe average thinking they're entitled to better seats and meals than they get. Airlines are caught between a rock and a hard place. Many people want travel bargains but then some price conscious travellers bleat like lambs lost from their mothers that they don't get a first class experience. There's no pleasing some customers...they're the ones we should ship off to Jetstar :D

They want the best they can get for the price,and will fork out their $$ to whoever provides it...not so complicated

Meanwhile ,you want the best return on your shares--Joe public wants the best deal for his $$---somewhere in the mix one company will do better than another--the one that gets the most of everyones $$

[Raz]

They want the best they can get for the price,and will fork out their $$ to whoever provides it...not so complicated

Meanwhile ,you want the best return on your shares--Joe public wants the best deal for his $$---somewhere in the mix one company will do better than another--the one that gets the most of everyones $$

Yes and its bad business for AIR all round as their last impression of AIR is they got shafted with a bad seat and flight experience :

[see weed]

A mention of AIR and THL on Paul Henry show at 6.37 this morning.

[winner69]

Roger and Paper Tiger both say July revenues about the same as last year (down a tiny fraction)

I reckon July passenger revenues are down ~9% on last year. Even allowing for 6% less days this year revenues are down - about 3%

If that trend continues full year revenues could be down $150m

Minor matter and when a 30 cent dividend is announced Friday everything else will be irrelevant

[Rep]

Agree with you but here's the thing. Mr and Mrs Joe average and especially their kids don't realise that a return journey of just on 21,000 km's for $999 is actually an incredible bargain !
It represents only 4.8 cents per RPK and AIR's cost per RPK is more than that. If it weren't for premium and business class and freight AIR could not run an airline selling seats at 4.8 cents per RPK as its below cost.
Classic case of you get what you pay for but that often doesn't stop many Mr and Mrs Joe average thinking they're entitled to better seats and meals than they get. Airlines are caught between a rock and a hard place. Many people want travel bargains but then some price conscious travellers bleat like lambs lost from their mothers that they don't get a first class experience. There's no pleasing some customers...they're the ones we should ship off to Jetstar :D

Yes that is often true. But by virtue of having the 200 odd passengers sitting in cattle class and freight, this pays most of the operating costs and the premium and business passengers are where the margin is made. If you have an empty cattle class then all that RPK for the Premium and Business doesn't matter if the operating costs aren't covered by the freight and the economy passengers.

Broken seats and inflight entertainment that doesn't work as well as delays are some of the unhelpful things that make the experience less than adequate for some passengers.

Personally, I don't buy flexi or works tickets for Trans Tasman for business or personal travel - I just use the Koru Lounge access to grab a meal, do some work on the free WiFi, fill my water bottle for the flight and if my toddler is coming with me, get a fluffy and warm milk for his sippy cup and a few crackers, cheese, sandwiches and an apple for his lunchbox... and I have some Bose Noise Cancelling Headphones and my iPad to watch something.

[Raz]

Qantas result in, below expectations, although first dividend since 2009, what a suckers investment:-)

[Snow Leopard]

Roger and Paper Tiger both say July revenues about the same as last year (down a tiny fraction)

I reckon July passenger revenues are down ~9% on last year. Even allowing for 6% less days this year revenues are down - about 3%...

It is not difficult to work out:
AIR give you the % changes in figures corrected for the different number of days.

So you do not need to worry about disparity:

http://takedesigns.com/wp-content/uploads/2013/08/Parrots_19477.jpg

Short Haul ASK is up 5.7% and RASK is down 6.0%, and 1.057 * 0.94 = 0.9936
or a decrease of 0.64%, which is the change in revenue. [ ASK * Revenue / ASK = Revenue ]

Long Haul you can do the sums yourself, discovering that the difference is even less (about the cost of feeding that parrot above the left over in-flight nuts).

Best Wishes
Paper Tiger

PS: While I can understand you believing Roger could get his numbers wrong, I am surprised that you should think that of me and I would appreciate it if when you do the long-haul figures you do not point out the misplaced decimal point in my original result.

[winner69]

From twitterland - he an Infometrics man

@benjiepatterson Qantas result shows @Jetstar_NZ domestic passengers in 6 months to June up 39% on a year ago, @FlyAirNZ saw growth of 2.3% over same period

[Balance]

Qantas result in, below expectations, although first dividend since 2009, what a suckers investment:-)

Market was expecting $1.13 billion so result is definitely less than what market expected.

Sp is up however on restoration of dividend and a continuation of share buyback program, and most important is the confident tone of the CEO's outlook comments.

Now let's see what Air NZ delivers on Thursday.

[winner69]

PS: While I can understand you believing Roger could get his numbers wrong, I am surprised that you should think that of me and I would appreciate it if when you do the long-haul figures you do not point out the misplaced decimal point in my original result.

Yes i was wrong

Not the logic and I'll blame the free calculator app on the ipad - when I reverted to to the trusty Texas TI-83 I get the same answer as you do

Revenues not growing are they

[workingdad]

From twitterland - he an Infometrics man

@benjiepatterson Qantas result shows @Jetstar_NZ domestic passengers in 6 months to June up 39% on a year ago, @FlyAirNZ saw growth of 2.3% over same period

Given the additional flights they have added I would suspect that would quantify the 39% in numbers. Perhaps there is a better statistic to measure but good thing is despite jetstars expansion into NZ AIR have not only maintained but increased the 2.3% referred to.

[Beagle]

PS: While I can understand you believing Roger could get his numbers wrong, I am surprised that you should think that of me and I would appreciate it if when you do the long-haul figures you do not point out the misplaced decimal point in my original result.

I try and make a career of getting the numbers right...seem to be doing okay at it so far :)...but everyone makes mistakes from time to time...EVERYONE !..I'd probably get send to the pound if I got a decimal point in the wrong place though.

[Snow Leopard]

There were rumours going around that AIR was looking at flying to Chengdu (think Pandas) but nothing has been announced, yet.

Today we get Auckland Airport welcomes Tianjin Airlines to NZ (http://www.scoop.co.nz/stories/BU1608/S00815/auckland-airport-welcomes-tianjin-airlines-to-nz.htm) who will whisk you to/from Chongqing (direct?) which is right next door, so to speak.

Best Wishes
Paper Tiger

[Beagle]

QAN earnings out today 49 cps after cunningly announcing a $A75m bonus for unionised workers still subject to the pay freeze but they're carrying that cost over to FY17 and not reporting it as an ordinary item...this dog smells creative accounting...so not really 49 cps after tax.

I expect AIR to announce a similar or possibly slightly higher after tax EPS, (excluding extraordinary item write-downs like the loss on sale of VAH and Cartel freight case settlement in the States) on Friday.

How people arrive at a fair price of circa $3.50 for QAN shares and $2.22 for AIR when they're both earning ostensibly at the same rate I cannot figure.

Whatever happy pills the Australian analysts are on, I wish they ship some across the Tassie for Kiwi analysts.

Yes Tiger more Chinese competition but QAN recognise there's about a 50% in increase in Chinese capacity coming in the year ahead to Australia.

Will be fascinating to compare the financials of these two companies in more detail in due course. Disc - highly likely to stick to the bargain apple variety

[tim23]

Anyone picking a special divvy.?

[Beagle]

10cps final and 10cps special is my pick....should be more but they have to fund growth in more aircraft so they fly further with more planes for...the same revenue :( Good that fuel is cheap.

[couta1]

10cps final and 10cps special is my pick....should be more but they have to fund growth in more aircraft so they fly further with more planes for...the same revenue :( Good that fuel is cheap. Yep that's my pick too, my main fascination as I've said prior will be to see where the price climbs to before going Ex divvy and how the stock behaves post that date. I've got a couple of action plans on the table but with this rollercoaster I probably need more than that. Expecting spike Friday morning followed by your run of the mill Aircoaster dip Friday p.m, and next week,well????

[Beagle]

Yep that's my pick too, my main fascination as I've said prior will be to see where the price climbs to before going Ex divvy and how the stock behaves post that date. I've got a couple of action plans on the table but with this rollercoaster I probably need more than that. Expecting spike Friday morning followed by your run of the mill Aircoaster dip Friday p.m, and next week,well????

I think we're on God's good humour with this one mate. Keep you seat belt fastened and tray table folded away, I think they're good value but anything is possible.

[Snow Leopard]

QAN earnings out today 49 cps after cunningly announcing a $A75m bonus for unionised workers still subject to the pay freeze but they're carrying that cost over to FY17 and not reporting it as an ordinary item...this dog smells creative accounting...so not really 49 cps after tax...

I smell sour grapes !



...How people arrive at a fair price of circa $3.50 for QAN shares and $2.22 for AIR when they're both earning ostensibly at the same rate I cannot figure...

An allergy:
Whilst both athletes have set personal best times for the last 366 day dash: one, who is in the peak of health, did so with very strong following winds; and the other ran their personal best on a much calmer day whilst still recovering from a prolonged period of ill-health (an allergy).

The punters are betting on how they are going to perform over the next few races.



...Will be fascinating to compare the financials of these two companies in more detail in due course...

It will be even more fascinating to read what you choose to emphasize.

Best Wishes
Paper Tiger

[Baa_Baa]

The Tiger and the Hound are best friends, honestly. :cool:
https://youtu.be/smYZ7nJp5wg

[couta1]

The Tiger and the Hound are best friends, honestly. :cool:
https://youtu.be/smYZ7nJp5wg That's very cool.

[Everwood]

I had a dream several nights ago that the dividend including special was 26 cents, but then I woke up and came back to reality. I'm predicting 10cps final and 5cps for the special. Anything above that would be a nice bonus.

[Master98]

15c final +10c special.

[see weed]

Picked up another lot today after selling some blo.dy ATM. Don't care what the div is, as long as it's over 8c, and am not expecting a special. But if it does pay a special, i'll take it and run;).

[couta1]

Picked up another lot today after selling some blo.dy ATM. Don't care what the div is, as long as it's over 8c, and am not expecting a special. But if it does pay a special, i'll take it and run;). OK see weed, confessions of an Air share holder time, how many are you holding now? and what's your average buy price?:cool:

[Raz]

I see expectations have fallen on the dividend..some concussion around here it appears. Blood sport being an AIR shareholder. Made 57c accum. on the last three ups so happy to see what dividend we get today...nice have the dividend that we should get already in the bag...

[winner69]

I see expectations have fallen on the dividend..some concussion around here it appears. Blood sport being an AIR shareholder. Made 57c accum. on the last three ups so happy to see what dividend we get today...nice have the dividend that we should get already in the bag...

That's the way to go Raz - 'collect' the divies on the way through better than buying for the dividend and then holding (and hoing)

Good stuff

[Beagle]

The Tiger and the Hound are best friends, honestly. :cool:
https://youtu.be/smYZ7nJp5wg

LOL cool. Tiger in there plays nice...maybe a lesson for someone ?

[see weed]

OK see weed, confessions of an Air share holder time, how many are you holding now? and what's your average buy price?:cool:
My average buy price changes every time I buy some. It was about $2.06, but is now on $2.159c. and rising if buying more. I hold about 25% of the amount that you hold. So if you work out the amount that you hold and divide it by 4, then that is how many I hold, give or take 20k;).

[Beagle]

I smell sour grapes !Beagle's have a superb sense of smell, seen any cat's at the airport lately ?




An allergy:
Whilst both athletes have set personal best times for the last 366 day dash: one, who is in the peak of health, did so with very strong following winds; and the other ran their personal best on a much calmer day whilst still recovering from a prolonged period of ill-health (an allergy).

The punters are betting on how they are going to perform over the next few races.




It will be even more fascinating to read what you choose to emphasize.

Best Wishes
Paper Tiger

This hound just wants to talk and share information for the benefit of others and for the sake of good robust debate, (much like Jeremy) but this video perfectly encapsulates your response. What about playing nice for a change...
https://www.bing.com/videos/search?q=cat+attacks+beagle+dog&&view=detail&mid=4F719ABE1852996FB3214F719ABE1852996FB321&FORM=VRDGAR

Nice to see AIR up a bit today.

[dagdaniel1]

What time is the announcement?

[winner69]

What time is the announcement?

First thing tomorrow morning - Friday

Patience my friend - i know a 30 cent dividend will be an exciting surprise

[Arbroath]

My stab at tomorrow's announcement:

NPAT $600m (pre-Virgin sale writedown)
Ordinary DPS 15c
Special DPS 10c

That will mean they've paid out 25cps ordinary or about 45% of earnings. FY17 NPAT to fall to $400-450m which is 35-40cps and they maintain 25cps ordinary next year.

Call me an optimist...

[dagdaniel1]

Haha, looking to buy some shares, trying to see if I can do it before the announcement

[winner69]

Haha, looking to buy some shares, trying to see if I can do it before the announcement

They are at 'sale price' until 4.45pm today so don't miss out

Tomorrow cost you heaps more

[dagdaniel1]

Yeh, hopefully bank transfers the money into the ASB clearing account by then

[Beagle]

My stab at tomorrow's announcement:

NPAT $600m (pre-Virgin sale writedown)
Ordinary DPS 15c
Special DPS 10c

That will mean they've paid out 25cps ordinary or about 45% of earnings. FY17 NPAT to fall to $400-450m which is 35-40cps and they maintain 25cps ordinary next year.

Call me an optimist...

Earnings for each year I agree with, divvy's probably a bit lower that your expectations but you never know :)