AIR - Air NZ.

[couta1]

Looks like a bit of a down trend here. Looking forward to results day. Incredibly slow and boring market today, this stock is currently in sleep mode like SUM others awaiting a poke with a big stick.

[workingdad]

I am thinking about some more again.... Have a bit more confidence in a good interim result and update and think the drop of late is purely a TA response following the charts and should have thought harder about selling mid 2.20s....

[arc]

Wondering what the strategy/reasoning is behind AIR pulling out of the "Commercial partnership that supposedly made it easier to put people on each others planes" ?

Workingdad, not my place to say but personally I advise patience... outcomes may be chaotic for a while. Seems the Trumped-effect is spreading and what he sees as good for his bowl of warm milk, may in fact be turned to curdled sludge by external factors.

[couta1]

Arc, they were providing cheap domestic seats to their opposition with that agreement, they don't need to do that, any punters Qatar bring here will still by and large have to use Air to travel around NZ anyway, except for the ones that choose to fly Jetcrap on the limited routes it provides.

[workingdad]

Arc, they were providing cheap domestic seats to their opposition with that agreement, they don't need to do that, any punters Qatar bring here will still by and large have to use Air to travel around NZ anyway, except for the ones that choose to fly Jetcrap on the limited routes it provides.

Not if the Jetstar share agreement is formed. Better Air at discount than not at all but I guess the domestic stats are holding up pretty well.

[couta1]

Not if the Jetstar share agreement is formed. Better Air at discount than not at all but I guess the domestic stats are holding up pretty well. Still Jetstar only service limited routes as already mentioned, good move by Air IMO, better to focus totally on their Star Alliance partners, domestic demand will be huge this year anyway.

[Beagle]

http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/news/Air-New-Zealand-McClay-urges-Air-NZ-and-Qatar-to-make-peace-23837316/

Much ado about very little. AIR and their shareholders did okay by taking a hardline commercial approach with Virgin. I suspect if Qatar are getting catty over this its them that's on the losing end of this change to the airlines commercial arrangement.

[Raz]

http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/news/Air-New-Zealand-McClay-urges-Air-NZ-and-Qatar-to-make-peace-23837316/

Much ado about very little. AIR and their shareholders did okay by taking a hardline commercial approach with Virgin. I suspect if Qatar are getting catty over this its them that's on the losing end of this change to the airlines commercial arrangement.

Naturally....


Mention of US airline lobbying the other day so will link to an update for anyone interested...

http://www.northjersey.com/story/travel/2017/02/08/airline-ceos-inbound-white-house/97652976/

[winner69]

That much touted Singapore - Canberra - Wellington won't be worrying AIR too much

Reckon 25% full on Canberra - Wellington leg

http://australianaviation.com.au/2017/01/singapore-airlines-canberra-flights-about-half-full-in-october/?platform=hootsuite

[Beagle]

That much touted Singapore - Canberra - Wellington won't be worrying AIR too much

Reckon 25% full on Canberra - Wellington leg

http://australianaviation.com.au/2017/01/singapore-airlines-canberra-flights-about-half-full-in-october/?platform=hootsuite

25%, depending on passenger mix would barely cover the fuel costs let alone crew, landing fees e.t.c.. It will be interesting to see how long Singapore last with this service into N.Z.

It would be a real blow to Infratil's runway expansion plans if another airline pulled out of international routes ex Wellington wouldn't it !

Hubbing international flights from Chch and AKL only as AIR suggests is the only way to go...seems like they have this bang on the money.

[stoploss]

25%, depending on passenger mix would barely cover the fuel costs let alone crew, landing fees e.t.c.. It will be interesting to see how long Singapore last with this service into N.Z.

It would be a real blow to Infratil's runway expansion plans if another airline pulled out of international routes ex Wellington wouldn't it !

Hubbing international flights from Chch and AKL only as AIR suggests is the only way to go...seems like they have this bang on the money.

So the subsidy per passenger is 4 times as much as their forecasts mmmmm no worries us poor old ratepayers here to bail out yet another poor commercial decision by WCC...
http://www.stuff.co.nz/business/76161963/New-Singapore-Airlines-flights-to-cost-Wellington-ratepayers-millions

[Beagle]

So the subsidy per passenger is 4 times as much as their forecasts mmmmm no worries us poor old ratepayers here to bail out yet another poor commercial decision by WCC...
http://www.stuff.co.nz/business/76161963/New-Singapore-Airlines-flights-to-cost-Wellington-ratepayers-millions

Why should residential ratepayers pay for incentives so that business in Wellington can theoretically benefit from having more tourists that theoretically wouldn't come to Wellington hubbing through Auckland or Christchurch anyway ? How does this benefit Wellingtonians generally ?...talk about drawing a long bow !

[Snow Leopard]

That much touted Singapore - Canberra - Wellington won't be worrying AIR too much

Reckon 25% full on Canberra - Wellington leg

http://australianaviation.com.au/2017/01/singapore-airlines-canberra-flights-about-half-full-in-october/?platform=hootsuite

Just to point out that you should not believe everything you read in the papers.

Oct 16 Singapore Airlines Load Factors
Wellington - Canberra 62.0%
Canberra - Singapore 75.1%

Singapore - Canberra 90.8%
Canberra - Wellington 57.4%

Nov 16 Singapore Airlines Load Factors (just released (https://bitre.gov.au/publications/ongoing/international_airline_activity-monthly_publications.aspx))
Wellington - Canberra 63.4%
Canberra - Singapore 79.3%

Singapore - Canberra 85.4%
Canberra - Wellington 60.8%

Best Wishes
Paper Tiger

[Nasi Goreng]

So we are a couple of weeks away from earnings and SP is hanging around the $2.10 area after going up to $2.27 a few weeks ago.

As volatile as Air NZ can be, what do you think the +/- % variance may be after results and guidance is communicated? At this stage, 4 months away from year end, I would hope they have a very good feel for end of year profit number so hopefully they will be able to tighten the range of their forecast.

What is the market expecting? A revised guidance to the bottom of the range may send the SP down potentially by about 10%. If we get above the midpoint, I think it goes higher than $2.27 and a surprising result toward the top of the range might have the SP heading for $2.50.

Interesting times...

[Zaphod]

Just to point out that you should not believe everything you read in the papers.

Oct 16 Singapore Airlines Load Factors
Wellington - Canberra 62.0%
Canberra - Singapore 75.1%

Singapore - Canberra 90.8%
Canberra - Wellington 57.4%

Nov 16 Singapore Airlines Load Factors (just released (https://bitre.gov.au/publications/ongoing/international_airline_activity-monthly_publications.aspx))
Wellington - Canberra 63.4%
Canberra - Singapore 79.3%

Singapore - Canberra 85.4%
Canberra - Wellington 60.8%

Best Wishes
Paper Tiger

Given the prevalence of special fares available on this route, I am left to wonder about the yield.

[Nasi Goreng]

Singapore Airlines have deep pockets. I bet there's an accountant somewhere that can make it look worthwhile.

[stoploss]

Might have lost some juicy fare payers here ....

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11798218

[Beagle]

Might have lost some juicy fare payers here ....

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11798218

I can really see Government employees lapping up Jetstar's service standards :lol:

[stoploss]

I can really see Government employees lapping up Jetstar's service standards :lol:

They mightn't have a choice if AIR NZ don't hurry up and sign a deal .....

[Beagle]

They mightn't have a choice if AIR NZ don't hurry up and sign a deal .....

Gerry Brownlee will "love" their tiny 29 inch pitch seats :D Seriously, I wouldn't worry, its probably just window dressing for the lefties. Govt is the major shareholder in AIR and their Koru lounge facilitates are what government employees and business people expect.

[Joshuatree]

Brownlee would prob place a cheek each on two seats and only notice at the end of the flight that he's got two tourists stuck to his bum ,after intensely watching repeats of Orwells 1984.

[winner69]

Mr Dore still grumpy over these ATRs on WGN and CHCH route ...andI don't blame him

But shareholders come first - stuff customers in pursuit of ever greater profits.

http://www.stuff.co.nz/travel/travel-troubles/89280290/air-nz-defends-use-of-turboprops-on-main-trunk-routes

[percy]

Brownlee would prob place a cheek each on two seats and only notice at the end of the flight that he's got two tourists stuck to his bum ,after intensely watching repeats of Orwells 1984.

Put him in the hold with a sack of cream buns,and you wouldn't hear a dickie bird from him.

[Raz]

Mr Dore still grumpy over these ATRs on WGN and CHCH route ...andI don't blame him

But shareholders come first - stuff customers in pursuit of ever greater profits.

http://www.stuff.co.nz/travel/travel-troubles/89280290/air-nz-defends-use-of-turboprops-on-main-trunk-routes


Yes it an interesting one...Get the jet or I don't go and send a manager instead:-) Don't visit Wellington as a consequence much now:-)

[macduffy]

Mr Dore still grumpy over these ATRs on WGN and CHCH route ...andI don't blame him

But shareholders come first - stuff customers in pursuit of ever greater profits.

http://www.stuff.co.nz/travel/travel-troubles/89280290/air-nz-defends-use-of-turboprops-on-main-trunk-routes

Yes, it seems the current generation of travellers has gone soft. Obviously they weren't around to fly in NAC's DC3's or the state of the art, at the time, Vickers Viscounts!

;)

[Raz]

Yes, it seems the current generation of travellers has gone soft. Obviously they weren't around to fly in NAC's DC3's or the state of the art, at the time, Vickers Viscounts!

;)

The difference is a degrade in service not the same as what was available decades ago..nearly every element of the experience has been degraded..people moan about no proper Koru lounge in regional section at CHCH..to a mile and half walk out on the tarmac..most likely longest walk in NZ to an airplane through to flight noise, seats comfort.. time of flight..risk of flight re weather in winter..etc... not able to take a coffee out of the cafe crap lounge they now have..all have been a common complaint etc... works ok when you have exess demand however that can always change in time plus EI management tells you these people will consider all options in other purchases and customer loyalty goes out the window...

[couta1]

Mr Dore still grumpy over these ATRs on WGN and CHCH route ...andI don't blame him

But shareholders come first - stuff customers in pursuit of ever greater profits.

http://www.stuff.co.nz/travel/travel-troubles/89280290/air-nz-defends-use-of-turboprops-on-main-trunk-routes Mr Dore needs to get a life as well as doing a bit more study of aircraft types and where each type should be used to its best advantage. Stuff have nothing worthy to publish when they continue to rehash old stories over and over(I notice a lot of their articles stay up for a week at times which backs up this viewpoint)

[Beagle]

Mr Dore still grumpy over these ATRs on WGN and CHCH route ...andI don't blame him

But shareholders come first - stuff customers in pursuit of ever greater profits.

http://www.stuff.co.nz/travel/travel-troubles/89280290/air-nz-defends-use-of-turboprops-on-main-trunk-routes

Mr Dore as a holder of a private pilot's license should have a rudimentary understanding of the fact that different aircraft types are better suited to different roles.
The ATR600 is extremely well suited to short hops of a distance from Chch to Wellington, (I haven't checked the charts) but I would have thought this is a similar distance that AIR flies them on their routes AKL to Napier and AKL to New Plymouth among many others..

If I remember correctly the flight time is only about 10 minutes difference compared to an A320 but the use of ATR600's means AIR can operate with far higher and more convenient frequency.
I guess he better not catch an AIR ATR flight from AKL to Nelson which at a scheduled flight time of 1 hr 25 minutes would have him bleating like a seal pup lost from its mother. Suppose he expects an A320 on that route too. If he doesn't like it I suggest he flies on Jetheaps relics or brushes up on his cross country skills and flies his own plane.

Let me guess...because he has a few skills with his private pilot's license he thinks he knows best how to run AIR N.Z. :lol:
Raz - that walk would do you a lot of good. If you feel really morally offended by the walk you could ask for wheelchair assistance :p

[winner69]

Mr Dore as a holder of a private pilot's license should have a rudimentary understanding of the fact that different aircraft types are better suited to different roles.
The ATR600 is extremely well suited to short hops of a distance from Chch to Wellington, (I haven't checked the charts) but I would have thought this is a similar distance that AIR flies them on their routes AKL to Napier and AKL to New Plymouth among many others..

If I remember correctly the flight time is only about 10 minutes difference compared to an A320 but the use of ATR600's means AIR can operate with far higher and more convenient frequency.
I guess he better not catch an AIR ATR flight from AKL to Nelson which at a scheduled flight time of 1 hr 25 minutes would have him bleating like a seal pup lost from its mother. Suppose he expects an A320 on that route too. If he doesn't like it I suggest he flies on Jetheaps relics or brushes up on his cross country skills and flies his own plane.

Let me guess...because he has a few skills with his PPL he thinks he knows best how to run AIR N.Z. :lol:

Spoken like a true accountant and loyal AIR shareholder.

Raz seems to agree with Mr Dore and he seems a pretty reasonable guy

Flight time might only be 10 minutes more but actual travel time is more like 1/2 hour.

[Beagle]

Food for thought.
Flight distances
Wellington to Christchurch 190 miles, (short enough that the difference in flight time ATR v A320 isn't especially material for most people)
Auckland to Wellington 306 miles (long enough that most people would notice the significant extra time an ATR600 would take) Nelson flights on an ATR have a scheduled time of 1 hr 25 for 316 miles so Wellington would be at least 1 hr 20 seeing its only 10 miles shorter v the 1.00 hr on an A320. (20 minutes is a noticeable increase in flight time for a domestic flight in my opinion).
Auckland to Napier 217 miles (longer than what Dore is complaining about but obviously Napier is a small regional city and couldn't sustain A320 services economically.
Auckland to Nelson 316 miles (fairly long flight for an ATR in N.Z. although the plane type is capable of well over double that distance), obviously this length flight 1 hr 25 would have Dore in a real frenzy.
Wellington to Invercargill 477 miles and AIR's longest flight within N.Z. in terms of scheduled time at 2 hours 10 min on a Q300. You don't suppose Invercargill residents might think they're entitled to first dibs on any expanded A320 service ? I guess the serial complainer better not shift to Invercargill or the Chatam Islands !

Further, if I remember correctly AIR are in the process of retrofitting their ATR's with highly advanced new navigational systems at a cost of twenty something million that will significantly improve their operational capabilities in adverse flying conditions, so bleating about their operational reliability should diminish soon too.

How so Winner, you don't have to go through security so that's some time saved there. Raz flies business and occasionally first class on Emirates...too used to the high life :p
There's nothing quite like the smell of aviation fuel filling your lungs as you walk out on the open tarmac, the rush of cold air blowing down the runway... really gives you a sense of how they used to do it in the days of old...some people need to harden up a bit :)

[couta1]

ATR's actually have a flying range of 1500km and Air Tahiti run theirs non stop from Pape'te to Nuku Hiva, a distance of 1400km. Perhaps Mr Dore should ponder this on his next flight between WGTN and ChCh, stop bleeting and be thankful:cool:

[Robomo]

Boarding time and exit time on the A320 is longer than the ATR, plus the time to go through security screening (not required on the ATR). Unloading time of the ATR is less than the A320 (fewer bags). Total time from dropoff at Wellington to taxi rank at Christchurch is about the same A320 or ATR. I would rather have the frequency of flights to suit my timetable rather than try and fit in with less flights. Seating on the ATR is fine for 60 minutes and there are none of the dreaded middle seats such as on the A320.

[see weed]

Yes, it seems the current generation of travellers has gone soft. Obviously they weren't around to fly in NAC's DC3's or the state of the art, at the time, Vickers Viscounts!

;)
I flew to Oamaru in 1973. The first part of flight from Auckland to Christchurch was exciting on a jet plane, and it had a jet motor on each wing, and went really fast, not sure what sort of plane it was. The second part of the trip from ChCh. to Oam. was on a DC3, what a laugh, but a good experience. Think there were only a very few of us on the DC3, less than 4 people from memory:).

[winner69]

Remember those DC-10s, the 3 engine job with the third engine mounted on the tail.

Air New Zealand had a bad experience with one of those planes

[winner69]

Probably be lumbered with one of those ATR jobs next week going to springsteen in Chch

With a bit luck might even score seat 1A

But for $59 can't really complain

[see weed]

Remember those DC-10s, the 3 engine job with the third engine mounted on the tail.

Air New Zealand had a bad experience with one of those planes
DC-10s had an under belly stretching problem, and the cargo door used to pop off in flight, due to the force of the tail engine stretching the underside. Please correct me if I'm wrong:scared:.

[Raz]

Spoken like a true accountant and loyal AIR shareholder.

Raz seems to agree with Mr Dore and he seems a pretty reasonable guy

Flight time might only be 10 minutes more but actual travel time is more like 1/2 hour.


I understand the economics of it and just highlight the psychology of customers. Its alway worse having a service degraded than never having had it at all at that standard. People accept one element of change however in this case there is several factors that are grating people that all changed at once..I know a number a people are really bitter and twisted by it!

It cost AIR in other ways..like how people decide/do long haul ex Christchurch and Wellington. So it can cost brand value in return for what for now appears bottom line advantage... the tradeoff is the premium AIR can get long haul. It doesn't worry me as I send an underling to Wellington and just don't visit.

Swiss Air (code share singapore airlines direct out of chch) has my private dollars for a family reunion mid year and I hear budget conscience and young people are doing EU via China Southern... prices under 1k return to EU including free hotel if layover is great than eight hours... is popular..as a mini stop over. I'm hearing very little good on the 787 configuration with most airlines including ours. AIR will not be able to maintain a premium price if it is not going to present a premium product offering. Prices have taken another step down..watching very closely...

This code share subsidy thing is interesting ..going with star alliance partners is so much cheaper than booking direct with Singapore airlines..yet you get in essence the same product.

[Raz]

Remember those DC-10s, the 3 engine job with the third engine mounted on the tail.

Air New Zealand had a bad experience with one of those planes

I remember being a little boy at Auckland airport when they were grounded.. just before we left wondering if I would ever get to do my first big overseas trip!

[winner69]

I remember being a little boy at Auckland airport when they were grounded.. just before we left wondering if I would ever get to do my first big overseas trip!

I flew back from Hong Kong on one shortly after one crashed - most passengers bailed and wouldn't fly on a DC-10 so plane was pretty empty - a whole row to myself was good.

[couta1]

Raz some people you know may very well be bitter and twisted by the changes,but going by 90% of the comments on stuff in response to the article, most people are happy to use the ATR on a short route. PS-You know the old saying, you can please some of the people most of the time ,but you can't please all of the people all of the time.

[winner69]

Big party in Dunedin tonight as both Air NZ and Jetstar grounded

http://www.stuff.co.nz/travel/travel-troubles/89329509/aucklandbound-jetstar-passengers-left-in-the-lurch

[Beagle]

Boarding time and exit time on the A320 is longer than the ATR, plus the time to go through security screening (not required on the ATR). Unloading time of the ATR is less than the A320 (fewer bags). Total time from dropoff at Wellington to taxi rank at Christchurch is about the same A320 or ATR. I would rather have the frequency of flights to suit my timetable rather than try and fit in with less flights. Seating on the ATR is fine for 60 minutes and there are none of the dreaded middle seats such as on the A320.

Sums it up nicely mate. The complainant was probably an only child and spoilt rotten.

[Raz]

Big party in Dunedin tonight as both Air NZ and Jetstar grounded

http://www.stuff.co.nz/travel/travel-troubles/89329509/aucklandbound-jetstar-passengers-left-in-the-lurch

Ha as luck would have it all the money in the world can not get you on another flight..good grief!

[Beagle]

https://www.nbr.co.nz/article/government-still-talks-air-nz-expanded-cross-agency-air-travel-contract-b-199363

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11799517 Interesting difference between how passengers from each airline were treated. Jetstar's back up and so called service standards turning into a fiasco...that's something "new" isn't it !

[Raz]

Sure although you try to not hack off your frequent, high value clients/customers in any business I'm involved with:)

[Raz]

Robomo, as frequently flyer, can't relate to that timing at all, also bags coming out are more determine by the number of flights landing concurrently...

[workingdad]

Gee, people need to just accept they have the flight options they have because AIR is a business just like others and no doubt balance out the will to keep regulars happy and the bottom line.

The whinny people can go fly Jetstar and really have something to winge about, suck it up cupcake!!

[Beagle]

I've flown the ATR 600 heaps of times to Napier which at 217 miles is longer than the sector we're debating. Its a huge step up from the old Fokker F27 Friendship days and vastly quicker than the old DC3 flights I remember.

I think they're a thoroughly modern turboprop and actually prefer seeing the view from 16,000 feet than about 35000 feet in an A320. The only criticism I can think of is the seats are a bit hard. I kind of like the whole turboprop thing getting a whiff of aviation fuel in your nostrils as you walk out on the tarmac.

[fish]

Still inappropriate.
We live in a polite ,respectful country.
Have in-laws from the states staying with us-atm touring the country and spending lots us dollars.
I felt proud when they commentated how polite people were-starting at customs.
They wondered why we had no intention of visiting the states!

[couta1]

Still inappropriate.
We live in a polite ,respectful country.
Have in-laws from the states staying with us-atm touring the country and spending lots us dollars.
I felt proud when they commentated how polite people were-starting at customs.
They wondered why we had no intention of visiting the states! At the other end of the spectrum is the excess PC and Preciousness that has infiltrated our society making it a less enjoyable place to live than it once was.

[macduffy]

The only criticism I can think of is the seats are a bit hard. I kind of like the whole turboprop thing getting a whiff of aviation fuel in your nostrils as you walk out on the tarmac.

Agree, Roger, but there is one other point - the need to keep one's head down while walking out to the tarmac, so as not to ruin one's jetsetter image.

;)

[iceman]

I've flown the ATR 600 heaps of times to Napier which at 217 miles is longer than the sector we're debating. Its a huge step up from the old Fokker F27 Friendship days and vastly quicker than the old DC3 flights I remember.

I think they're a thoroughly modern turboprop and actually prefer seeing the view from 16,000 feet than about 35000 feet in an A320. The only criticism I can think of is the seats are a bit hard. I kind of like the whole turboprop thing getting a whiff of aviation fuel in your nostrils as you walk out on the tarmac.

I travel the ATR frequently between Nelson and Auckland and totally agree with you on this. Nothing wrong with these planes and I find the experience as good or better than any other option we have for regional flights. Maybe us regional plebs are not as demanding as big city folk :-)

[dobby41]

I travel the ATR frequently between Nelson and Auckland and totally agree with you on this. Nothing wrong with these planes and I find the experience as good or better than any other option we have for regional flights. Maybe us regional plebs are not as demanding as big city folk :-)

I flew on quite a few in South East Asia - very popular for international flights (though, to be fair, they are fairly short).

[Raz]

I travel the ATR frequently between Nelson and Auckland and totally agree with you on this. Nothing wrong with these planes and I find the experience as good or better than any other option we have for regional flights. Maybe us regional plebs are not as demanding as big city folk :-)

I like you comment although have you ever had any other options? Also blessed with much better conditions on the tarmac mid winter in Nelson and Auckland:-) That reminds me my Auckland neighbours swear it doesn't rain every day in the big city, can't get over that one :-)

[Bjauck]

...getting a whiff of aviation fuel in your nostrils as you walk out on the tarmac. I always "wind down" the window as I get close to the airport to get a childish buzz of excitement from smelling the aviation fuel fumes!

[winner69]

I like you comment although have you ever had any other options? Also blessed with much better conditions on the tarmac mid winter in Nelson and Auckland:-) That reminds me my Auckland neighbours swear it doesn't rain every day in the big city, can't get over that one :-)

No fun going from plane to terminal on the tarmac in Wellington with a freezing howling southerly blowing horizontal rain directly off Cook Strait

Te suits hate it - no wonder Raz sends an underling

[stoploss]

No fun going from plane to terminal on the tarmac in Wellington with a freezing howling southerly blowing horizontal rain directly off Cook Strait

Te suits hate it - no wonder Raz sends an underling

Bring back Ansett.....

[Beagle]

I always "wind down" the window as I get close to the airport to get a childish buzz of excitement from smelling the aviation fuel fumes!

Thanks, I feel more normal now :)

Friend of mine suggested to me that freight volumes have been very strong. Also I know that AIR's new Dreamliners can carry three times the freight regardless of pax load of the 767's they're replacing which had freight limitations in certain pax and flight distance routes.

I'm expecting 1H result to slightly exceed average analyst expectations so am topping up a bit more this morning and have got a partial fill so far of 6,666 shares, a number that's somewhat disturbing...better get the others fast :)
Hmmmmm...the hound got to wondering if that's my free reminder that money is the root of all evil...or maybe I'm reading tea leaves that aren't there...food for thought anyway.

[see weed]

Thanks, I feel more normal now :)

Friend of mine suggested to me that freight volumes have been very strong. Also I know that AIR's new Dreamliners can carry three times the freight regardless of pax load of the 767's they're replacing which had freight limitations in certain pax and flight distance routes.

I'm expecting 1H result to slightly exceed average analyst expectations so am topping up a bit more this morning and have got a partial fill so far of 6,666 shares, a number that's somewhat disturbing...better get the others fast :)
Hmmmmm...the hound got to wondering if that's my free reminder that money is the root of all evil...or maybe I'm reading tea leaves that aren't there...food for thought anyway.
Not to worry Roger, I just blessed your 666 and everything is good. Also just topped up with 24,000 AIR. Results and div coming soon. Is AIR the next cab off the rank? Sold a small holding of A2m and made a nice little 6k profit this morning.:cool:

[RTFQ]

Thanks, I feel more normal now :)

Friend of mine suggested to me that freight volumes have been very strong. Also I know that AIR's new Dreamliners can carry three times the freight regardless of pax load of the 767's they're replacing which had freight limitations in certain pax and flight distance routes.

I'm expecting 1H result to slightly exceed average analyst expectations so am topping up a bit more this morning and have got a partial fill so far of 6,666 shares, a number that's somewhat disturbing...better get the others fast :)
Hmmmmm...the hound got to wondering if that's my free reminder that money is the root of all evil...or maybe I'm reading tea leaves that aren't there...food for thought anyway.

Hi Roger. Not sure on your comment re 787 freight capacity. The holds are a similar size to the 767. Whilst the aircraft may be able to carry more weight than the 767 they are still falling short capacity wise especially long haul..

[Beagle]

Hi Roger. Not sure on your comment re 787 freight capacity. The holds are a similar size to the 767. Whilst the aircraft may be able to carry more weight than the 767 they are still falling short capacity wise especially long haul..

Hi RtFQ,

According to Wiki they list the cargo capacity of a 767 as 86.9 cubic meters. https://en.wikipedia.org/wiki/Boeing_767#767-300ER

According to Boeing they list the cargo capacity of a 787-9 at 154.4 cubic meters http://www.boeing.com/commercial/787/

I was told at the 2014 annual meeting that in real world operational environment taking into account AIR "pushes" the range and load of these aircraft, the Dreamliners typically have three times the cargo capacity. Accepted that on the face of it the space is 154.4 / 86.9 = 78% more.

Thank you for your blessing see weed, all blessings are gratefully received but I will nonetheless finish that buy order off one way or the other today including at market at the close if necessary.
Don't want to tempt fate by having a shareholding size in AIR that ends in a 666 :eek2:

Not sure if this is the start of a run or not but I definitely see them as a solid hold for great dividends over the years ahead at the current price (20 / 213) / 0.72 = 13% gross dividend yield and the next juicy divvy is next month !

[arc]

Its interesting what turns up when you start backtracking through topics and chaining together abstract concepts. At some stage Luxton did some homework [or had someone else do it for him..?] and I must say I like the way they were thinking. They have this tech guy in the background [Avi Golan] that's thinking outside the box, and I must say it looks potentially rather interesting.

Would be interesting to see if they are prepared to role up the shirt sleeves and get into deeper levels of Artificial Intelligence.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11797797

[winner69]

Its interesting what turns up when you start backtracking through topics and chaining together abstract concepts. At some stage Luxton did some homework [or had someone else do it for him..?] and I must say I like the way they were thinking. They have this tech guy in the background [Avi Golan] that's thinking outside the box, and I must say it looks potentially rather interesting.

Would be interesting to see if they are prepared to role up the shirt sleeves and get into deeper levels of Artificial Intelligence.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11797797

Good stuff eh

Really executing that strategic intent of monotonectally actualizing superior customer service well.

Chris has more up his sleeve

[simjp81]

Does AIR have an active DRIP?

[stoploss]

Does AIR have an active DRIP?

There's a few of them , namely management who keep selling long term incentive shares at any opportunity .........

[Rep]

DC-10s had an under belly stretching problem, and the cargo door used to pop off in flight, due to the force of the tail engine stretching the underside. Please correct me if I'm wrong:scared:.

The cargo door opened outward rather than inward - that meant that the hold could contain a greater volume but meant a stronger locking mechanism was required and in the event it failed at high altitude, the failure would be catastrophic as it would cause explosive decompression.

It wa a bad design that lead to 2 explosive decompression that resulted in the loss of 2 aircraft.

The DC10 grounding was caused by a service issue. The maintenance directive was that the wing mounted engine was to be removed from the pylon to be serviced and then the pylon was to be removed. American Airlines was found by the NTSB to have removed the engine and pylon as a unit with a forklift (to reduce the service time) which lead to the May 25, 1979 accident where the engine partially broke off and smashed the port wing apart on takeoff for the loss of 271 souls. The removal process had inadvertently weakened the structure of the attachment.

3 other airlines had used a similar process which the manufacturer had recommended against. The FAA withdrew the type certificate for the aircraft which lead to the worldwide grounding (I also had my first flight delayed by some weeks as well - in the end, I ended up flying in a Qantas 747 to Sydney and from there to Hong Kong. The Air NZ DC10 flight back was absolutely full as delayed passengers finally got a flight home.

[brend]

potential asset write off.

https://avherald.com/h?article=4a4e5a72&opt=0

she is only 3 years old

[couta1]

By
potential asset write off.

https://avherald.com/h?article=4a4e5a72&opt=0

she is only 3 years old Probably just a landing strut replacement I'd say.

[Beagle]

Thank goodness for insurance.

[Leftfield]

Virgin Australia 48% drop in profit. (https://hotcopper.com.au/resources/update-1-virgin-australia-first-half-profits-drop-defers-boeing-deliveries.43310/#.WKZMcDJh2XQ)

AIR well out.

[Beagle]

“Going forward, the group will stay focused on strengthening our financial foundation by further optimising the balance sheet

Clear inference that they have already got some way towards optimizing their balance sheet. Optimizing such a creative word when the ugly truth is their debt equity level was last seen at 4.5 :1 and that's before the statutory loss this half ! Yes, Chris Luxon did us all a big favor !

[winner69]

Clear inference that they have already got some way towards optimizing their balance sheet. Optimizing such a creative word when the ugly truth is their debt equity level was last seen at 4.5 :1 and that's before the statutory loss this half ! Yes, Chris Luxon did us all a big favor !

Chris the master of corporate speak and buzzwords

Bingo when he uses 'pivot' in half year announcement

[winner69]

Jan stats look to be a bit on the slack side

Not a good start to H2

[couta1]

Jan stats look to be a bit on the slack side

Not a good start to H2 Nothing unexpected as far as I can see, imagine if every company reported stats on a monthly basis, there would be nervous Nellie's by the truck load all over the NZX, selling like Sheeple.

[Beagle]

Its a very different operating environment in January 2017 compared to last year. This time last year AIR were operating in a vacuum of competition on certain routes. In the context of the new operating environment as foreshadowed by the airline itself and acknowledged in its forecast and the fact that many smaller and less efficient aircraft like the Beachcraft 1900 19 seater and the 767's have been let go, (or about to be in March 2017, 767), and in the context of lower fuel prices I think yields and load factors are satisfactory and within the scope of the companies own forecast. I continue to hold and believe this is an excellent yield stock, (sorry folks I don't see it bounding up to $3.00 anytime soon) and am looking forward to the half year result on Thursday.

Fuel heading is also out today and its pleasing to see they are enjoying good hedging with a Brent collar of just on $50 U.S. maximum this quarter. Hedging further out also looks quite satisfactory to me.

[couta1]

At this mornings low of $2.09, the market has priced in the very bottom end of guidance(400million) IMO, anything substantially above that will see a SP increase after Thurs, once again IMO.

[vin]

When would we expect the next divvy? Sorry, been pretty inactive round these parts!

[Jantar]

When would we expect the next divvy? Sorry, been pretty inactive round these parts!Probably mid to late March

[Beagle]

When would we expect the next divvy? Sorry, been pretty inactive round these parts!

Historically AIR have paid their divvies very quickly after announcing their financial results, actually incredibly quickly, at least as quick or quicker than any other company I know of.
Must be something to do with the government, they're usually quite keen on getting cash in the door quickly for some strange reason :)
Other point your post raises is that effectively people buying now (at $2.09 last time I looked) are effectively buying cum dividend so really only paying $2.00 on a medium term view as they get around 10 cents back within five minutes so to speak.

[mikeybycrikey]

When would we expect the next divvy? Sorry, been pretty inactive round these parts!

The past three years, it has been paid the 3rd Friday in March, so maybe 17 March this year.

Previous dates are here: https://www.nzx.com/markets/NZSX/securities/AIR/dividends

[Bobdn]

Interesting article which includes a table of P/Es for Asian airlines. Air NZ seems cheap by comparison.

https://www.bloomberg.com/news/articles/2017-02-20/priciest-china-airline-stocks-since-2015-still-a-bargain-to-cicc

[couta1]

Interesting article which includes a table of P/Es for Asian airlines. Air NZ seems cheap by comparison.

https://www.bloomberg.com/news/articles/2017-02-20/priciest-china-airline-stocks-since-2015-still-a-bargain-to-cicc Are there better value stocks to buy on the NZX currently? not many, if any.

[Baa_Baa]

Are there better value stocks to buy on the NZX currently? not many, if any.

I don't know whether it is a value stock, but it is a definitely a cyclical industry that can smash a share price, or boost it, and yet still the company's share price remains in a sustained down trend. It might break out albeit a lot of capital to recover (above $2.18), but it might not.

Regardless of what an XXXXOS holder says, with some respect, for whatever reasons they seem to ignore the potential for the cycle downwards to continue. Hard as that may be to fathom or accept. Risk / reward may be off the scale, though as not obvious as in times past when the share price was appreciating, as the faithful have recently reverted solely to pointing out the sustained dividends regardless of the share price. Certainty, there is none. Sure, you can put your capital at risk for earnings alone, or in an uptrend enjoy earnings and capital appreciation. Which side of the cycle are we on right now?

Comforting words from the devoted will surely follow, it's to be expected here, some may look to weigh that against share price/performance and the gauge that the market will certainly deliver. After 4 or so years in enjoying capital appreciation and dividends, I'm equally enjoying being out while the cycle runs it's course.

[Beagle]

yet still the company's share price remains in a sustained down trend.

Sorry mate you lost me on the first line. We must be seeing different charts :p I see a nice recovery from a $1.70 several months ago and still trading well above the 100 day MA which looks like $2.04 on my chart.
http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/financials/
2018 prospective PE is only 7.2 !
Compare that with other airlines in Australasia and Asia and compare that 7.2 with the ten year average of AIR of a PE of 11. FY 18 could be close to the bottom of the current cycle for all you, I or any analyst knows. Good luck finding a better value home for your money :) We'll know a lot more tomorrow morning about how the airline is going, save any more debate till then eh :)

[Baa_Baa]

We must be seeing different charts

Yes, the context of my post was 'cyclical', so looking at the bigger picture the SP turned again on black Friday Jan 13th right on the down-trend line from the high's over $3.

What do you think the SP will do this time when the dividend is announced, will it fall like it did last time ex-Div?

[Beagle]

Predicting the future is fraught with risk but I'd expect a typical pattern with a normal sized dividend. Most stocks share prices recover normal sized dividends within a few weeks of going ex dividend, most of the time. I am looking forward to tomorrow's half year result.

[Raz]

I expect it to be a good result.

[Hoop]

http://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by Baa_Baa http://www.sharetrader.co.nz/images/buttons/viewpost-right.png (http://www.sharetrader.co.nz/showthread.php?p=656258#post656258)
yet still the company's share price remains in a sustained down trend.






Sorry mate you lost me on the first line. We must be seeing different charts :p I see a nice recovery from a $1.70 several months ago and still trading well above the 100 day MA which looks like $2.04 on my chart.

Downtrend definition:...lower highs lower lows

Looks likes a downtrend to me...how could you not see this:confused:

https://www.anzsecurities.co.nz/DirectTrade/dynamic/chart.aspx?key=TWSxQ9LamJIT%2f5yO01oRvuzGWiwBC9Iat EhSa2mQHIVV75Lb%2fkG4IAtwGenMKF5UL3t3D2FwtP%2fAc16 xBNS0Dabs%2fpFQ8UrdX8lZqynfKCqWOgLKLdKjZuSW2Q4MlB% 2bAKOwLazjvDYHTW0O91OmXXDB7Ncc81Yi2mJOuf%2fB%2fkAo tv31Ogl0hJ8cfNUlVH7OlCby5PJAvMxnwjYaT9%2flmdaut8h4 2Tp%2fFZzG54Eq3XOR3c%2fiA9BfugXO7r4atJPYgUZ3pGjoth fUa04aSRLuYrOQYpBaScvXQ7CvbEy1smpiEw30haEYEgaUcGCg YMI1Ns3a0HwEMeis%3d

[couta1]

I expect it to be a good result. Topping up today's with proceeds of another big selldown on another downtrending stock, current average is now $2.22, a huge effort to get it down from $2.80ish. PS-Dont try this at home.

[Beagle]

Interesting article which includes a table of P/Es for Asian airlines. Air NZ seems cheap by comparison.

https://www.bloomberg.com/news/articles/2017-02-20/priciest-china-airline-stocks-since-2015-still-a-bargain-to-cicc


http://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by Baa_Baa http://www.sharetrader.co.nz/images/buttons/viewpost-right.png (http://www.sharetrader.co.nz/showthread.php?p=656258#post656258)
yet still the company's share price remains in a sustained down trend.


Downtrend definition:...lower highs lower lows

Looks likes a downtrend to me...how could you not see this:confused:

https://www.anzsecurities.co.nz/DirectTrade/dynamic/chart.aspx?key=TWSxQ9LamJIT%2f5yO01oRvuzGWiwBC9Iat EhSa2mQHIVV75Lb%2fkG4IAtwGenMKF5UL3t3D2FwtP%2fAc16 xBNS0Dabs%2fpFQ8UrdX8lZqynfKCqWOgLKLdKjZuSW2Q4MlB% 2bAKOwLazjvDYHTW0O91OmXXDB7Ncc81Yi2mJOuf%2fB%2fkAo tv31Ogl0hJ8cfNUlVH7OlCby5PJAvMxnwjYaT9%2flmdaut8h4 2Tp%2fFZzG54Eq3XOR3c%2fiA9BfugXO7r4atJPYgUZ3pGjoth fUa04aSRLuYrOQYpBaScvXQ7CvbEy1smpiEw30haEYEgaUcGCg YMI1Ns3a0HwEMeis%3d

I see a nice recovery since early October. I also see that AIR is extremely cheap relative to its peer group and well positioned with a very young fleet and I think its been well lead by Chris Luxon.
I think the result tomorrow might surprise some people, hopefully I'm not one of them :)

[Hoop]

Topping up today's with proceeds of another big selldown on another downtrending stock, current average is now $2.22, a huge effort to get it down from $2.80ish. PS-Dont try this at home.

PS-Dont try this at home. I won't. I promise:D

[couta1]

PS-Dont try this at home. I won't. I promise:D Didn't think you would, your much too conservative and wise for that.:)

[Beagle]

Topping up today's with proceeds of another big selldown on another downtrending stock, current average is now $2.22, a huge effort to get it down from $2.80ish. PS-Dont try this at home.

Based on our telephone discussions mate I know you haven't taken off the 25 cent special divvy which as I've said before effectively amounts to a return of capital from the sale of Virgin so you're effective net average cost is below $2, actually $1.97 and you have enjoyed solid ordinary dividends as well. I'd say your approach has resulted in reasonable returns thus far...whether its a reasonable portfolio management or risk management approach...seeing as we're good mates I couldn't possibly comment :)

[Raz]

Topping up today's with proceeds of another big selldown on another downtrending stock, current average is now $2.22, a huge effort to get it down from $2.80ish. PS-Dont try this at home.

don't try at home...ha too late for me been buying...

[Hoop]

I see a nice recovery since early October. I also see that AIR is extremely cheap relative to its peer group and well positioned with a very young fleet and I think its been well lead by Chris Luxon.
I think the result tomorrow might surprise some people, hopefully I'm not one of them :)

Yes it has been a nice recovery... it has clawed back its 35c payout to its shareholders (sadily, a bit was clawed back in tax)...but the worrying sign on the chart is the price has so far failed to create a higher high which indicates a worry that if the shareprice has in indeed topped out it is another technical sucker rally and the bear cycle continues..
I think some posters have scant respect for Mr Market when it comes to AIR..One must remember Mr Market is made up of all sorts of buyers and sellers, some may be inexperienced but you have to assume that the majority know actually what to expect..The disclosures have been publised very well..I won't be surprised and I'm still not buying ..(I expect the earnings to be around $550M - $600M (top end of the disclosured forecast)) [$457M last year]...So why is the shareprice low? It's due to the uncertainty of the future..The sharemarket is forward looking and sees the typical signs of a cycle that has matured, peaked and is showing signs of waning due to increased competitors, price matching (discounting), lower margins, increased number of planes, etc (cyclical stock text book warning signs)...At this stage of a cyclical stocks cycle earning are still good but the market sees cyclical black clouds forming, hence the PE Ratio warning (very low PE = possible danger)

[Hoop]

Didn't think you would, your much too conservative and wise for that.:)

:):)...I've recently broken that image mould Couta...I got adventurous and bought some PPH :cool:

[winner69]

Just off one of those infamous Christchurch ATR flights

One good thing with them - don't have to endure those awful safety videos you get on big planes.

And couts - the mosh pit really rocked at Springsteen last night. Awesome night

[Beagle]

Yes it has been a nice recovery... it has clawed back its 35c payout to its shareholders (sadily, a bit was clawed back in tax)...but the worrying sign on the chart is the price has so far failed to create a higher high which indicates a worry that if the shareprice has in indeed topped out it is another technical sucker rally and the bear cycle continues..
I think some posters have scant respect for Mr Market when it comes to AIR..One must remember Mr Market is made up of all sorts of buyers and sellers, some may be inexperienced but you have to assume that the majority know actually what to expect..The disclosures have been publised very well..I won't be surprised and I'm still not buying ..(I expect the earnings to be around $550M - $600M (top end of the disclosured forecast)) [$457M last year]...So why is the shareprice low? It's due to the uncertainty of the future..The sharemarket is forward looking and sees the typical signs of a cycle that has matured, peaked and is showing signs of waning due to increased competitors, price matching (discounting), lower margins, increased number of planes, etc (cyclical stock text book warning signs)...At this stage of a cyclical stocks cycle earning are still good but the market sees cyclical black clouds forming, hence the PE Ratio warning (very low PE = possible danger)

Happy to bow to your greater technical expertise with TA. On the FA side average analyst forecast this year is $488m before tax and $482m for Fy18. They're very conservative with their "guess" for FY19 just over $400m before tax, (how anyone can possibly expect to reliably guess Fy19 earnings when we're only mid way through Fy17 is anyone's guess) but even on a conservative FY19 estimate they're still on a prospective FY19 PE of only 8 compared to a long run 10 year average PE of 11.

They're very cheap compared to their peer group and very cheap on a historical basis. They'll probably stay cheap because of future concerns regarding earnings but to be clear I am holding for what I believe is an easily sustainable 20 cps in annual fully imputed dividends. 20 / 207, (theoretical ex divvy price if a 10 cent divvy is shortly forthcoming) / o.72 = 13.4% gross yield taking a long term view.

They are only two years away from a major capex program completion and will have a very young and fuel efficient fleet with an average age of only 6.2 years. I think they are a very good hold as a dividend yield stock.

[Raz]

Just off one of those infamous Christchurch ATR flights

One good thing with them - don't have to endure those awful safety videos you get on big planes.

And couts - the mosh pit really rocked at Springsteen last night. Awesome night

A lot of people asked to use my office car park for the night, I only like a few of his songs so I was a cheap skate and just listen to the sound check earlier in the day..hear good night had by all..

[Snow Leopard]

Sichuan Airlines to fly Chengdu (think Pandas) to Auckland and back (https://nzx.com/companies/AIA/announcements/297217).

That should spice things up a bit :D.

Best Wishes
Paper Tiger

spice - get it ?

[couta1]

Sichuan Airlines to fly Chengdu (think Pandas) to Auckland and back (https://nzx.com/companies/AIA/announcements/297217).

That should spice things up a bit :D.

Best Wishes
Paper Tiger

spice - get it ? Not a route Air fly's anyways, but will be sure to add passengers and extra spice to their domestic stronghold.:D

[boysy]

interesting article just out

Air New Zealand profit forecast to tumble for the past six months as competition heats up

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11805506

"Management's full year guidance range of $400m -$600m is based on a jet fuel price US$10 lower than current spot levels."

Air New Zealand faced direct competition across the Pacific from American Airlines during the past half year, new carriers from China have entered the market and Emirates increased its capacity on its long haul routes. Air fares have been at historic lows, hitting all airlines' profitability.

Bowley said it was assumed that management had been concentrating on cost containment during the past six month and increases in capacity were predicted to fall.

"With significant RASK pressure challenging various routes for Air New Zealand, we expect the airline to outline a more subdued capacity outlook than in recent periods."

Overall capacity grew more than 7 per cent in the first half of 2017 but this was expected to fall to "low single digits" in the second half of this year.

The material decline in profitability through the full year and sustained higher levels of capital expenditure meant Air New Zealand would be flirting with the top end of its gearing band by the fiscal year end.

"The board may consequently prefer to take a more prudent approach with its dividend and therefore we see scope for a cut."

Bowley said while Air New Zealand had a better record than most of international peers, the airline industry generated volatile returns.

"Strong management and the structural advantage of being based in New Zealand with a
dominant local business (where it has 80 per cent of the domestic market) offer some earnings support through the cycle. However, Air NZ is not immune from cyclical swings and is currently in the midst of a downturn," Bowley said

[Beagle]

I think Bowley has the fuel thing wrong. AIR were enjoying extremely low forward cover fuel prices in the first and second quarter and even this quarter have most of their current consumption covered with a brent collar with a maximum price of $U.S.50. In addition AIR are currently enjoying fuel costs based on a US dollar that materially more favorable than last year. Fuel costs for the half being reported tomorrow will be lower than Bowley is expecting. I have seldom found a reason to rate Forbar's analysts and that after being with them for many many years, no longer have an association with Forbar which speaks for itself in terms of what I think of their analysts research.

[Raz]

I think Bowley has the fuel thing wrong. AIR were enjoying extremely low forward cover fuel prices in the first and second quarter and even this quarter have most of their current consumption covered with a brent collar with a maximum price of $U.S.50. In addition AIR are currently enjoying fuel costs based on a US dollar that materially more favorable than last year. Fuel costs for the half being reported tomorrow will be lower than Bowley is expecting. I have seldom found a reason to rate Forbar's analysts and that after being with them for many many years, no longer have an association with Forbar which speaks for itself in terms of what I think of their analysts research.


I agree on the fuel comment Roger and think first six months result will be ok, on balance historically AIR has discounted prices over Dec- Feb to fill capacity going forward, I have not seen this discounting occur this year to the same degree, that is a good sign for the second six months.

[Beagle]

https://www.nzx.com/companies/AIR/announcements/297228 AIR approved as a participant in the Governments renewed carrier agreement.

[carrom74]

Are we heading for a free fall tomorrow as the market would have seen the herald"s later afternoon scary story on its forthcoming results?

[couta1]

Are we heading for a free fall tomorrow as the market would have seen the herald"s later afternoon scary story on its forthcoming results? The good old Herald and it's gun Forsyth analyst, they know how to pick the perfect timing for releasing their negative articles, i'll give them that, apart from that I'd take the article and the analyst with an extremely large pile of rock salt. PS-I see boysy is back, them Rosehips sure can't be pretty to watch right now.

[Raz]

The good old Herald and it's gun Forsyth analyst, they know how to pick the perfect timing for releasing their negative articles, i'll give them that, apart from that I'd take the article and the analyst with an extremely large pile of rock salt. PS-I see boysy is back, them Rosehips sure can't be pretty to watch right now.

ha the good old Herald which can hardly ever say a bad word about property however when it comes to AIR...altered my position already so we shall see tomorrow...

[Beagle]

Yeap I topped up very recently too at $2.095 and I am more than happy to back my own analysis and judgement.

[Subway]

Just my two cents, after flying return from London to Auckland on Malaysia Airlines, for almost half what AirNZ was charging for not quite an equivalent service (my domestic connection wasn't on the same ticket in NZ, and obviously I don't get Koru access/airpoints), unless you can justify the significant additional cost to fly AirNZ then you need to understand the considerable long haul competition for AirNZ and what that represents. If I want to fly London/Auckland I now have the option of Malaysia, Qatar, Emirates, China Southern, China Eastern, Philippines, Thai, Air China, with the exception of Philippines, these are all one stop hub options with considerably better baggage allowances and better connections. The second question I have is, what can AirNZ focus on for the value add, they used to milk domestic routes and as unreliable as Jetstar is, they are often significantly cheaper, is the money just in the pacific islands? do they expect people to just pony up the additional for the "Air NZ experience"? Im really struggling to understand their business now...

[winner69]

........
I have seldom found a reason to rate Forbar's analysts and that after being with them for many many years, no longer have an association with Forbar which speaks for itself in terms of what I think of their analysts research.

Forbar are gurus
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11772348

[Leftfield]

Just my two cents, after flying return from London to Auckland on Malaysia Airlines, for almost half what AirNZ was charging for not quite an equivalent service (my domestic connection wasn't on the same ticket in NZ, and obviously I don't get Koru access/airpoints), unless you can justify the significant additional cost to fly AirNZ then you need to understand the considerable long haul competition for AirNZ and what that represents. If I want to fly London/Auckland I now have the option of Malaysia, Qatar, Emirates, China Southern, China Eastern, Philippines, Thai, Air China, with the exception of Philippines, these are all one stop hub options with considerably better baggage allowances and better connections. The second question I have is, what can AirNZ focus on for the value add, they used to milk domestic routes and as unreliable as Jetstar is, they are often significantly cheaper, is the money just in the pacific islands? do they expect people to just pony up the additional for the "Air NZ experience"? Im really struggling to understand their business now...

I agree Subway. I have just returned from a jaunt through Asia and noted AIR was not price competitive and offered only comparable service with the least leg room of all the flights. IMHO AIR is just one of a very crowded market.

[couta1]

I agree Subway. I have just returned from a jaunt through Asia and noted AIR was not price competitive and offered only comparable service with the least leg room of all the flights. IMHO AIR is just one of a very crowded market. Not too crowded on the domestic front aye. I only fly other airlines when Air don't offer a route or code share partner, I like to support good NZ companies, I'm not into making foreign companies richer at the expense of our own companies,if I have a choice about it.

[winner69]

Not too crowded on the domestic front aye. I only fly other airlines when Air don't offer a route or code share partner, I like to support good NZ companies, I'm not into making foreign companies richer at the expense of our own companies,if I have a choice about it.

They might be smallish but those ATR things were 100% full flying to CHCH and back for Springsteen

Betcha most paid more than $59 bucks ours cost as well.

Couts- The Boss twice as good as GnR

[Balance]

Not too crowded on the domestic front aye. I only fly other airlines when Air don't offer a route or code share partner, I like to support good NZ companies, I'm not into making foreign companies richer at the expense of our own companies,if I have a choice about it.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11748081

Air NZ is obviously doing something right to win awards after awards?

For some of us, paying extra to have direct flights to destinations without the hassles of stopovers (and the almost inevitable delays and extra hours of traveling) is not a luxury but a necessity, especially for the older generations who can afford to pay more as well.

[Jantar]

10 cps interim is exactly as predicted, and updated guidance for full year is narrowed down to $475M - $525M, and right in the middle of the previous guidance. The 2nd best result in the company's history is pretty good by my reckoning.

[winner69]

After being astounded with this number the other day I've done some sums and now reckon you are a bit light with your $240m (which signals they haven't been any more efficient than last year)

Using your passenger revenue forecast (known within a few million) and assuming no great change in other revenue streams total revenues will be about $2.63 million

CASK has been improving over the last few years (efficiencies etc) and if we use a CASK of 9.0 cents (H!16 was 9.4 and H2 was 9.1) and plugging in numbers for finance costs etc one comes to an NPBT of $310m

Whatever MOPS has been could upset that CASK assumption. MOPS was US$60/barrel in H1 last year so maybe about the same this year. But if no improvement in CASK and it is same as last years 9.4 cents then NPAT will be about $230m

Whatever I reckon H1 could be around $300m which would set up a good full year result.

Praying for a good CASK - as no doubt AIR are else they will need to rewrite the Slides on CASK and CASK Improvement which they proudly touted at last announcements.

Roger me old mate - I was a lot closer with my around $300m than your woefully pessimistic $240m. Actual $327m (normalised)

Share price to $2.50 soon for sure now

[couta1]

10 cps interim is exactly as predicted, and updated guidance for full year is narrowed down to $475M - $525M, and right in the middle of the previous guidance. The 2nd best result in the company's history is pretty good by my reckoning. Nothing wrong with this result contrary to the bleeting in the Herald last night, happy holding. PS-Expecting stronger 2nd half but it's a secret so don't tell anyone.

[Balance]

Forbar are gurus
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11772348

Am taking the bait, W69.

Forbar the firm whose analysts rated Feltex a 'hold' a week before it collapsed? And who shoved umpteen number of Feltex shares (and other unmentionables) into their discretionary clients' portfolios?

Forbar the firm which believes that it is okay to juice their toxic offerings (Credit Sails) with "Remember we catch more flies with honey than vinegar!"?

Forbar the firm that sold hundreds of millions of South Canterbury Finance (their No 1 corporate client) securities to their clients?

And now, DRUM ROLL .......

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11566121

Forbar which came last in 2014 stock picks with the only (yes, only) negative return?

Maybe we are talking about different firms?

[Beagle]

Am taking the bait, W69.

Forbar the firm whose analysts rated Feltex a 'hold' a week before it collapsed? And who shoved umpteen number of Feltex shares (and other unmentionables) into their discretionary clients' portfolios?

Forbar the firm which believes that it is okay to juice their toxic offerings (Credit Sails) with "Remember we catch more flies with honey than vinegar!"?

Forbar the firm that sold hundreds of millions of South Canterbury Finance (their No 1 corporate client) securities to their clients?

And now, DRUM ROLL .......

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11566121

Forbar which came last in 2014 stock picks with the only (yes, only) negative return?

Maybe we are talking about different firms?

Very well said Balance. Their analyst Bowley got the interim result hopelessly wrong, honestly he was so far wide of the mark you wonder how much analysis he actually did ?
That they won the 2016 competition only goes to prove the old saying that every dog has its day not matter what the pedigree.
Anyway back to AIR, yes Winner the hound was conservative, and deliberately so, Kudos to you for picking ~ $300m.
Very happy indeed with the result but a little concerned with forward guidance in the circumstances taking into account $349m earnings before tax for 1H full year guidance at the mid point of $500m which is roughly what I have been expecting implies only ~ $150m for 2H FY17.

It will be interesting to hear their fuller explanation in the conference call for such a conservative second half forecast. Good that their capex all the way out to 2021 is now only $1.6 billion some of which will already have been paid by way of deposits. This underscores their ability to be a solid dividend payer for the foreseeable future. Happy with the dividend which was as expected.

[winner69]

Very well said Balance. Their analyst Bowley got the interim result hopelessly wrong, honestly he was so far wide of the mark you wonder how much analysis he actually did ?
That they won the 2016 competition only goes to prove the old saying that every dog has its day not matter what the pedigree.
Anyway back to AIR, yes Winner the hound was conservative, and deliberately so, Kudos to you for picking ~ $300m.
Very happy indeed with the result but a little concerned with forward guidance in the circumstances taking into account $349m earnings before tax for 1H full year guidance at the mid point of $500m which is roughly what I have been expecting implies only ~ $150m for 2H FY17.

It will be interesting to hear their fuller explanation in the conference call for such a conservative second half forecast.

Agree - that full year guidance been tightened up so $500m it will be eh

But seems a bit light relative to $349m or $327m in H1

Maybe Forbar man just got his timing wrong and things are going as he outlined in his report. I note fuel assumption is $65/barrel - up $10 on previous guidance, didn't the Forbar mention this $10?

[couta1]

Very well said Balance. Their analyst Bowley got the interim result hopelessly wrong, honestly he was so far wide of the mark you wonder how much analysis he actually did ?
That they won the 2016 competition only goes to prove the old saying that every dog has its day not matter what the pedigree.
Anyway back to AIR, yes Winner the hound was conservative, and deliberately so, Kudos to you for picking ~ $300m.
Very happy indeed with the result but a little concerned with forward guidance in the circumstances taking into account $349m earnings before tax for 1H full year guidance at the mid point of $500m which is roughly what I have been expecting implies only ~ $150m for 2H FY17.

It will be interesting to hear their fuller explanation in the conference call for such a conservative second half forecast. Good that their capex all the way out to 2021 is now only $1.6 billion some of which will already have been paid by way of deposits. This underscores their ability to be a solid dividend payer for the foreseeable future. Happy with the dividend which was as expected. They are being overly conservative on purpose I'd say and should overdeliver in H2 on this basis IMO, huge domestic demand about to kick in during H2.

[Raz]

Agree - that full year guidance been tightened up so $500m it will be eh

But seems a bit light relative to $349m or $327m in H1

Maybe Forbar man just got his timing wrong and things are going as he outlined in his report. I note fuel assumption is $65/barrel - up $10 on previous guidance, didn't the Forbar mention this $10?

Second half will hold up as they are not discounting to the same extent as per last year which is my best indicator forward bookings are holding up through to June. Yes for the super price conscience there are cheaper options especially Auckland - EU however in the past when it has cut into loads, AIR price matches on their site not via direct advertising, have not seen so much of that this year:-)

Im all good where we are :-)

[Beagle]

They are being overly conservative on purpose I'd say and should overdeliver in H2 on this basis IMO, huge domestic demand about to kick in during H2.

It looks that way to me mate but the conference call will make an interesting listen. Winner - The fuel thing doesn't explain the reduction in second half earnings as they've already alluded to higher revenue / improving yields compared to 1H Fy17. I am a little puzzled by their second half outlook and when reading through the text of the result was quite surprised their full year guidance wasn't upgraded based on the $349m result for the first half. What are management seeing in the second half compared to the first half operating environment ? Can't be yields, can't be load factors, isn't anywhere near fully explained by jet fuel increase, what is it ?

[babymonster]

nicely done to all airnz people...

[stoploss]

It looks that way to me mate but the conference call will make an interesting listen. Winner - The fuel thing doesn't explain the reduction in second half earnings as they've already alluded to higher revenue / improving yields compared to 1H Fy17. I am a little puzzled by their second half outlook and when reading through the text of the result was quite surprised their full year guidance wasn't upgraded based on the $349m result for the first half. What are management seeing in the second half compared to the first half operating environment ? Can't be yields, can't be load factors, isn't anywhere near fully explained by jet fuel increase, what is it ?

Roger when they outperform in the 2nd half , they can then pay all the extra out in a special divvy ........

[Beagle]

Roger when they outperform in the 2nd half , they can then pay all the extra out in a special divvy ........

:lol: :lol:

[Beagle]

If you want to drill down into the nuts and bolts here's how

https://www.nzx.com/files/attachments/252605.pdf

Suggest you skim read this first
https://www.nzx.com/files/attachments/253624.pdf

[babymonster]

Qantas seems to doing worse... no surprised..

[kyanar]

Worse how? They're up $0.15 since open.

[Nasi Goreng]

Qantas EPS 0.27. Share price $3.70

Air EPS 0.228. Share price $2.22

Hmm

[winner69]

Qantas EPS 0.27. Share price $3.70

Air EPS 0.228. Share price $2.22

Hmm

20% discount for being a smaller air line
20% discount for being the outsider in the ASX and Having it's main listing on an exchange they call the NZX

Relativity seems about right

[Beagle]

I am happy with the analysts presentation and analysts seemed happy with the answers to questions.
Some key points I noted.
Traditionally first half is stronger.
Company is expecting less RASK decline in 2H and overall expects RASK improvements going into FY18 which is consistent with my long held view that opening specials by new competitors in our market don't last indefinitely.
Once new entrants have established a route and built demand from cheap pricing as they come around to their anniversary or even sooner they will look to normalize their yields to actually make money.
Company expects ongoing rask improvement half on half in the years ahead with higher oil prices.
Company thinks we're now at a cyclical high point in terms of intensity of competition and pressure on yields.

You could easily infer from that that the current level of projected earnings for FY17 are very close to a cyclical low. With capex falling dramatically in the medium term I have a high level of confidence about the sustainability of the dividend of 20 cps annually. Anyone hoping for a reversion to the cyclical low of the unprecedented depth's of the GFC is highly likely to be extremely disappointed and will be missing out on what is an extremely high gross dividend yield while they wait in vain hope on the sidelines.

All good, no worries...back to sleeping by the dividend food bowl :sleep:

[sb9]

I am happy with the analysts presentation and analysts seemed happy with the answers to questions.
Some key points I noted.
Traditionally first half is stronger.
Company is expecting less RASK decline in 2H and overall expects RASK improvements going into FY18 which is consistent with my long held view that opening specials by new competitors in our market don't last indefinitely.
Once new entrants have established a route and built demand from cheap pricing as they come around to their anniversary or even sooner they will look to normalize their yields to actually make money.
Company expects ongoing rask improvement half on half in the years ahead with higher oil prices.
Company thinks we're now at a cyclical high point in terms of intensity of competition and pressure on yields.

You could easily infer from that that the current level of projected earnings for FY17 are very close to a cyclical low. With capex falling dramatically in the medium term I have a high level of confidence about the sustainability of the dividend of 20 cps annually. Anyone hoping for a reversion to the cyclical low of the unprecedented depth's of the GFC is highly likely to be extremely disappointed and will be missing out on what is an extremely high gross dividend yield while they wait in vain hope on the sidelines.

All good, no worries...back to sleeping by the dividend food bowl :sleep:

Thanks for that Roger, was planning to listen to conf call but unfortunately other work meetings have cut into that time slot. Will try and listen to transcript later on.

Overall happy with result and more importantly divvy of 10c fully imputed. That Forbar analyst along with herald need to take a good look at themselves for such a deviated forecast, am sure that would've spooked some retail holder last evening.

[see weed]

Are we heading for a free fall tomorrow as the market would have seen the herald"s later afternoon scary story on its forthcoming results?
We could be half way up the next up trend, which started 5 months ago, I know because I started it in the $1.70s to 1.80s:). Was also at the start of the uptrend at the one before that , buying in at 80c to 1.10c, but did sell out too soon at 1.30s to 1.40s. The new low is now 1.90s to $2.... New planes less fuel etc. How high this time? Will let you know in 6 months. My av price at the moment is 2.02 and in the green about 40k including next div:t_up:

[Nasi Goreng]

So AIR have tightened their guidance which should be fairly predicatable given only 4 months to go plus forward orders.

But what are the rules regarding giving guidance? If it's looking like it's going to come in above or below, do they need to declare it?

[Beagle]

So AIR have tightened their guidance which should be fairly predicatable given only 4 months to go plus forward orders.

But what are the rules regarding giving guidance? If it's looking like it's going to come in above or below, do they need to declare it?

In a word, yes.

[Nasi Goreng]

Thanks for that. Must be different to US system where companies provide a guidance then beat it by a mile.

Just looking at the chart, we had that ugly head and shoulders which caused the down trend. It now looks like there could be a reverse head and shoulders forming, if it can break through $2.30 we could be looking at a bit of a rally.

[Beagle]

http://www.sharechat.co.nz/article/56db6202/air-new-zealand-more-upbeat-about-future-says-competition-may-have-peaked.html?utm_medium=email&utm_campaign=Air%20New%20Zealand%20more%20upbeat%2 0about%20future%20says%20competition%20may%20have% 20peaked&utm_content=Air%20New%20Zealand%20more%20upbeat%20 about%20future%20says%20competition%20may%20have%2 0peaked+CID_d59cfcfd021735d4de33a2c4de98ef7d&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle56db6202air-new-zealand-more-upbeat-about-future-says-competition-may-have-peakedhtml

Can't see you getting your $1.50 now Winner :p

[Bobdn]

This thread is my happy place today. Staying well clear of the SKT thread *sob*.

[see weed]

This thread is my happy place today. Staying well clear of the SKT thread *sob*.
Me to happy. Up 10c, so you can take your div now and sell or wait for real div and get.....;):t_up:. Appears to be more buyers than sellers so me am going to wait.

[couta1]

This thread is my happy place today. Staying well clear of the SKT thread *sob*. I see the Herald still using sensational headlines in the 2 articles they have up currently titled, Headwinds for Air NZ and What's clipped Air NZ wings. It wouldn't be polite to put on here what I think of their reporting without getting banned, so I'll leave it to your imagination. Anyway the market doesn't seem to give a toss what they think and neither should it.

[Beagle]

I see the Herald still using sensational headlines in the 2 articles they have up currently titled, Headwinds for Air NZ and What's clipped Air NZ wings. It wouldn't be polite to put on here what I think of their reporting without getting banned, so I'll leave it to your imagination. Anyway the market doesn't seem to give a toss what they think and neither should it.

You can put your feat up and relax mate, have a couple of cold ones... I think you can afford that luxury after today's share price performance :D

[Raz]

Nice to know not everyone listens to fake news in the paper, nice hot day and evening bbq to enjoy a good day.

[couta1]

You can put your feat up and relax mate, have a couple of cold ones... I think you can afford that luxury after today's share price performance :D Cheers mate, I'm grandchild minding tonight, so it will be tomorrow before I can follow your prescription, but very happy anyway.

[carrom74]

The good old Herald and it's gun Forsyth analyst, they know how to pick the perfect timing for releasing their negative articles, i'll give them that, apart from that I'd take the article and the analyst with an extremely large pile of rock salt. PS-I see boysy is back, them Rosehips sure can't be pretty to watch right now.

Nice one couta1...Yesterday the "analysts" predicted a 45% drop on NP and after seeing a 24% drop today,they have toned down the rhetoric by just saying AIR needs to keep tighter grip on operations...(on NBR).Eating a humble pie after seeing the sp skyrocket eh?

[winner69]

Never put your faith in Jetstar eh

It's almost like taking money by false pretences



http://www.stuff.co.nz/travel/travel-troubles/89781416/bruce-springsteen-fans-arrive-at-airport-to-find-jetstar-flight-cancelled

[QOH]

Never put your faith in Jetstar eh

It's almost like taking money by false pretences



http://www.stuff.co.nz/travel/travel-troubles/89781416/bruce-springsteen-fans-arrive-at-airport-to-find-jetstar-flight-cancelled

That totally sucks, how can they not refund them for the return journey when it's their fault.

[Beagle]

Never put your faith in Jetstar eh

It's almost like taking money by false pretences



http://www.stuff.co.nz/travel/travel-troubles/89781416/bruce-springsteen-fans-arrive-at-airport-to-find-jetstar-flight-cancelled

Far better chance of getting there and back in a nice newish AIR N.Z. ATR600 with proper staff and engineering backup than a 30 year old relic Q300 Jetsatar Australia couldn't sell with a bare skeleton of crew and engineering support. Been a victim of Jokestar's so called "service standards" twice already so they have been on my no fly list for some time now. Non refunding the return leg regardless of the fact that its useless to you as they cancelled the outbound leg is par for the course for them. They simply couldn't care less in my experience.

[Robomo]

Far better chance of getting there and back in a nice newish AIR N.Z. ATR600 with proper staff and engineering backup than a 30 year old relic Q300 Jetsatar Australia couldn't sell with a bare skeleton of crew and engineering support. Been a victim of Jokestar's so called "service standards" twice already so they have been on my no fly list for some time now. Non refunding the return leg regardless of the fact that its useless to you as they cancelled the outbound leg is par for the course for them. They simply couldn't care less in my experience.

Reminds me of my last experience with Jetstar, heading for a funeral Auckland to Christchurch. Plane delayed by an hour, then another hour, then told that I could only claim insurance or transfer to Air NZ if delay was more than three hours. Plane further delayed another hour, then another hour. Finally took off 4 hours late. Told by check-in clerk that insurance or transfer could not be claimed as "each delay" was less than three hours. Go figure. Didn't bother pushing the matter, even though it did not seem right. Noted that at least 10 people didn't fly in the end, some went back to the office, some just paid the $400 AirNZ were wanting.

That was four years ago, never again.

[Beagle]

http://www.nzherald.co.nz/business-travel/news/article.cfm?c_id=813&objectid=11806210

Nothing new here, just posting how the herald reported it.

Fact is analysts got this half very wrong especially Mr Bowley of Forsyth Barr who will have a very busy weekend cleaning all the egg off his face.
Closest to the mark was our very own friend Winner69 with his $300m+ prediction. The hounds $245m prediction was before tax and was over $100m light, proof the he doesn't always get over exuberant with one of his favorite stocks.

I am not surprised to see the SP rally on the back of this result. Fact is AIR are highly profitable in this new highly competitive market and are likely to remain that way.

[44wishlists]

"he doesn't always get over exuberant with one of his favorite stocks."

:t_up::t_up::t_up:

[Bobdn]

http://www.nzherald.co.nz/business-travel/news/article.cfm?c_id=813&objectid=11806210

Nothing new here, just posting how the herald reported it.

Fact is analysts got this half very wrong especially Mr Bowley of Forsyth Barr who will have a very busy weekend cleaning all the egg off his face.
Closest to the mark was our very own friend Winner69 with his $300m+ prediction. The hounds $245m prediction was before tax and was over $100m light, proof the he doesn't always get over exuberant with one of his favorite stocks.

I am not surprised to see the SP rally on the back of this result. Fact is AIR are highly profitable in this new highly competitive market and are likely to remain that way.

Bowley's prediction did give me some anxiety when it came out, I have to admit. However, I'm spread far and wide these days so failure in any one stock is not going to have me reaching for the oven fries; french vanilla ice cream and Whittaker's Braeburn Apple and Vanilla chocolate before my cheat day.

Really interesting that Buffett likes some airlines now, as was signaled earlier in this thread. Here's an update, just in case you missed it:

https://www.bloomberg.com/news/articles/2017-02-22/buffett-s-pattern-shows-he-may-buy-airline-morgan-stanley-says

[couta1]

Bowley's prediction did give me some anxiety when it came out, I have to admit. However, I'm spread far and wide these days so failure in any one stock is not going to have me reaching for the oven fries; french vanilla ice cream and Whittaker's Braeburn Apple and Vanilla chocolate before my cheat day.

Really interesting that Buffett likes some airlines now, as was signaled earlier in this thread. Here's an update, just in case you missed it:

https://www.bloomberg.com/news/articles/2017-02-22/buffett-s-pattern-shows-he-may-buy-airline-morgan-stanley-says Bowley's prediction didn't make me anxious, just very annoyed that such inaccurate rubbish could be published the night before the result, and to make matters worse the article was left up for most of the morning on the Heralds page in conjunction with the actual accurate result article. Buffett investing in airlines is great news, shame he's not investing in our great little profitable, big divvy paying company.

[Baa_Baa]

Bowley's prediction didn't make me anxious, just very annoyed that such inaccurate rubbish could be published the night before the result, and to make matters worse the article was left up for most of the morning on the Heralds page in conjunction with the actual accurate result article. Buffett investing in airlines is great news, shame he's not investing in our great little profitable, big divvy paying company.

Agree, what a stupid moment to post a down ramp forecast, unless he's short AIR and wants some downside? It seems to be pre-considered but shot in the foot by the announce and SP action. Forget Buffet, he's irrelevant to AIR, it's background noise and irrelevant, imo.

Speaking of which AIR has an interesting chart now bolting up to the down trend resistance line from the $3+ highs (log scale otherwise PT would tell me off). Heaps of technical resistance at and above this point, rejoice when (or if) it goes up further, otherwise keep an eye on it if you're concerned at all about invested capital.

JMO, GLTAH.
BAA

8710

[winner69]

Putting numbers to the words / info in AIRs future outlook if they only achieve $475m to $525m npbt than they haven't told us the full story - left something out

If there is no mystery thing left out bare minimum has to be $550m plus Virgin gain of $22m. If Chris suddenly realised this is the case probably no need to disclose as still within 10% /15% of guidance (range generally seen as need to disclose).

The earnings 'upgrade' will come at a time when it best suits AIR

That's how I see it anyway

[Beagle]

Bowley's prediction did give me some anxiety when it came out, I have to admit. However, I'm spread far and wide these days so failure in any one stock is not going to have me reaching for the oven fries; french vanilla ice cream and Whittaker's Braeburn Apple and Vanilla chocolate before my cheat day.

Really interesting that Buffett likes some airlines now, as was signaled earlier in this thread. Here's an update, just in case you missed it:

https://www.bloomberg.com/news/articles/2017-02-22/buffett-s-pattern-shows-he-may-buy-airline-morgan-stanley-says

Thanks, off topic but I really love your cheat day therapy methodology :)



Putting numbers to the words / info in AIRs future outlook if they only achieve $475m to $525m npbt than they haven't told us the full story - left something out

If there is no mystery thing left out bare minimum has to be $550m plus Virgin gain of $22m. If Chris suddenly realised this is the case probably no need to disclose as still within 10% /15% of guidance (range generally seen as need to disclose).

The earnings 'upgrade' will come at a time when it best suits AIR

That's how I see it anyway

I couldn't agree more. For reasons best known to management I think they are playing it very conservatively indeed with their updated FY17 full year guidance.

[bull....]

just back from overseas, travelled jet star for the first time we had delays on departing, delays on coming home no immigration paperwork on plane was available.
Air NZ wins hands down in my opinion.

[janner]

Real competition. https://www.rt.com/news/378661-pia-flight-standing-passengers/

[brend]

Real competition. https://www.rt.com/news/378661-pia-flight-standing-passengers/\

obviously trying to get that load factor up.

the comments in that article are extreme.

[janner]

The one with the food trolley will be calling out

" Allah Snack Bar "..

[couta1]

Analysts mean target raised from $2.09 to $2.17, with a high target of $2.29. Very big of them but still too low IMO, I know one of them will still be removing the egg from his face from last week.

[Nasi Goreng]

Well IMO, the chart at the moment looks quite healthy. There is a reverse head and shoulders emerging, so if you look at the big drop that we had last year which was the result of a head and shoulders, then we might get the reverse this year, i.e. big rally. $2.50 looks achievable right now within the next few months... then from there, who knows.

[Beagle]

well imo, the chart at the moment looks quite healthy. There is a reverse head and shoulders emerging, so if you look at the big drop that we had last year which was the result of a head and shoulders, then we might get the reverse this year, i.e. Big rally. $2.50 looks achievable right now within the next few months... then from there, who knows.

$3.00 maybe :D

[oldtech]

$2.30 hit, which is a nice price for me personally - my average cost is currently $2.295 so this is the first time in a while that I have been in the green (just) on this particular stock. :)

[couta1]

$2.30 hit, which is a nice price for me personally - my average cost is currently $2.295 so this is the first time in a while that I have been in the green (just) on this particular stock. :) Congrats for keeping the faith, I'm up as much as the divvy almost so very happy. Will be interesting to see post divvy behaviour this time on a rising trend line.

[Nasi Goreng]

I'm in a similar situation to you Coutts, although I didn't average down. The challenge is now we get to this area, keeping the faith a bit longer. I think the emerging trend supports holding longer. Its way different share price action now than it was last year.

[oldtech]

I did average down - I know opinion is divided on whether this is a good strategy or not, but if I hadn't I would be waiting for the share price to get up to around $2.80.

I'm cautiously optimistic and keeping the faith at the moment ... SP is heading in the right direction following the results announcement ... but let's bring on the divvy and then see where the roller-coaster heads ... hopefully we don't see a repeat of last September.

[couta1]

I did average down - I know opinion is divided on whether this is a good strategy or not, but if I hadn't I would be waiting for the share price to get up to around $2.80.

I'm cautiously optimistic and keeping the faith at the moment ... SP is heading in the right direction following the results announcement ... but let's bring on the divvy and then see where the roller-coaster heads ... hopefully we don't see a repeat of last September. Same re the $2.80, if I showed you my averaging down(Or catching a falling knife as some like to put it) history on this stock over the last year, you would probably have nightmares. Been a very profitable stock to own nethertheless.

[Beagle]

Interesting SP action since the result. Interestingly management believe competition has peaked, (high tide) and appear confident regarding yields for the future.
Going off the mid point of the forecast range $500m, less the one off for sale of Virgin = $478m, less full tax of 28% gives $344m after tax $344m / 1123m shares = EPS of 30.6 cps.

Previous analysis has sown a couple of things. PE's are usually higher than average at the height of the competitive storm, (trough earnings).
The ten year average PE for AIR is about 11. 11 is lower than most other airlines in the region at present.

11 x 30.6 cps = $3.36. Not suggesting it will hit that point anytime soon but the potential for a rerating is definitely there and in the meantime while we wait patiently we're being rewarded extremely handsomely with very high fully imputed dividend income. Great stock to hold for the foreseeable future especially with capex falling off the edge of a cliff in a couple of years time.

[Nasi Goreng]

Same re the $2.80, if I showed you my averaging down(Or catching a falling knife as some like to put it) history on this stock over the last year, you would probably have nightmares. Been a very profitable stock to own nethertheless.

I literally LOLd at this. Fortune favors the brave eh. It's nice when it works out, well done.

[see weed]

Interesting SP action since the result. Interestingly management believe competition has peaked, (high tide) and appear confident regarding yields for the future.
Going off the mid point of the forecast range $500m, less the one off for sale of Virgin = $478m, less full tax of 28% gives $344m after tax $344m / 1123m shares = EPS of 30.6 cps.

Previous analysis has sown a couple of things. PE's are usually higher than average at the height of the competitive storm, (trough earnings).
The ten year average PE for AIR is about 11. 11 is lower than most other airlines in the region at present.

11 x 30.6 cps = $3.36. Not suggesting it will hit that point anytime soon but the potential for a rerating is definitely there and in the meantime while we wait patiently we're being rewarded extremely handsomely with very high fully imputed dividend income. Great stock to hold for the foreseeable future especially with capex falling off the edge of a cliff in a couple of years time.
Gotta bit of spare dosh in the cm account and was thinking of getting some SKC for the ex div next Thursday, but decided to top up with more AIR tomorrow. Not too worried about sp dropping after ex div, if it does drop. As long as we can lock in that div, the sp can go where ever it wants to. What time is the st meeting next Saturday please?

[Beagle]

Gotta bit of spare dosh in the cm account and was thinking of getting some SKC for the ex div next Thursday, but decided to top up with more AIR tomorrow. Not too worried about sp dropping after ex div, if it does drop. As long as we can lock in that div, the sp can go where ever it wants to. What time is the st meeting next Saturday please?

Midday this Saturday mate. I'm looking forward to seeing you and some other very amiable and articulate folks too.

[sb9]

Solid uptrend with good support, haven't seen that in a while. Could easily push to at least 250 in the short term, don't expect the price to stay lower post div too. Just all in my opinion, DYOR.

[workingdad]

Just sold half my holdings - want to free up some cash for a possible purchase, still have faith and keeping the other half long term. Nice to lock in a profit (including divvy) after having some frustrating days as a holder :)

[winner69]

Solid uptrend with good support, haven't seen that in a while. Could easily push to at least 250 in the short term, don't expect the price to stay lower post div too. Just all in my opinion, DYOR.


...surely $3 in short/medium term

[peat]

Just sold half my holdings - want to free up some cash for a possible purchase, still have faith and keeping the other half long term. Nice to lock in a profit (including divvy) after having some frustrating days as a holder :)

I noticed this little 'u' on the quotes - it must have been you.
8713

(it means 'undisclosed volume' )

[sb9]

...surely $3 in short/medium term

Now now winner, let's not do a ST forum curse by revoking that (in)famous $3 call...

[workingdad]

I noticed this little 'u' on the quotes - it must have been you.
8713

(it means 'undisclosed volume' )

Not quite, I did see those earlier in the day and volume went up accordingly so some big buyers out there too, think it will continue to climb breaking resistance but keen to spend some $ and don't want to break a cash term deposit we have.

[see weed]

WOW... Big lot of buyers coming through at end of day:t_up:.

[Bobdn]

I'm savouring the Air ascent, it's been a tough week. What a great lunch you'll have Roger.

[Beagle]

Went fishing today on the Manukau by coincidence ended up directly under the flight path of watching our birds come into land. Fishing was pretty average, company was great, the free landing show was awesome but catch of the day was coming home to see the SP :)...suspect Couta1 had an even better day...good on ya mate :)

[Joshuatree]

Think I've heard that before Roger; same place, more planes; Planespotter for sure!.Im visualising you fluffing a cast and foulhooking the tail of a jet taking off:) Good few days for us holders.
ps sequel to trainspotter about to hit the screens

[vin]

...surely $3 in short/medium term

You have made this call a number of times over the last couple of years... Let's forget the $3 mark until it happens!! haha

[Raz]

You have made this call a number of times over the last couple of years... Let's forget the $3 mark until it happens!! haha

Not this time unless it happens before July/August

http://www.stuff.co.nz/travel/news/89910894/cathay-pacific-to-fly-direct-to-christchurch

nice...

[axe]

air up 13% in two weeks.... i wonder how Couta is coping? :)

[see weed]

air up 13% in two weeks.... i wonder how Couta is coping? :)
Very happily you would think. At this rate sp will be 2.40 by days end maybe 2.50 by ex div eve in 6 work days time. I'm with Couta on this one, have just topped up with an extra 102,000 in last couple of weeks. But don't try this at home:). On a side issue, went to the ANCCG meeting yesterday about the new flight paths over Auckland, but that's another story.

[modandm]

From late last year:




Been a tough year obviously. I think most of us underestimated the impact to yields that the lower oil price/competition would bring. It's a global phenomenon. Certainly my FY17 earnings estimates have fallen from 40-45c down to 30-35c. That said the share price move down has been dramatic, leaving the company (imho) significantly undervalued, as has been the case for about the last 5 years (has it been that long...).

I certainly knew that FY16 was peak, and perhaps naively thought the dividend / cash-flow story would support the stock. Clearly the negative momentum and uncertainty on yields has mean't a tough devaluation, and risk being priced into the stock.

Where to from here then?

For the ST investor: Yield comparisons get easier in January, so should the operating stats firm up I would expect a re-rating towards 2.50, which values the stock on a reasonable 8x PE.

For the LT investor: Personally i'm not too concerned whether AIR make 28 or 32c in FY17 EPS. The question is sustainability and ideally growth in profit from there. If sustained (along with cash flow) there is a bonanza in FY19-20. I did a few figures and have spoken to the CFO, basically over the next 4 years (if things stay stable), AIR could pay $1.80 in dividends. That's based on a 50c special in FY19, and a 60c special in 2020 plus recurring twenty something ordinary. Over 5 years, you basically get your entire capital back, so if the stock is still at $2, you double your money (15% p.a). Any growth is cream on top.


Pleased with the recent result and expecting the yield improvement to roll in from here. What is clear is that sentiment has switched from cautious to neutral and happily seen the stock advance. The cost performance and fleet simplification benefits are starting to show up, and I expect analysts to continue to be surprised positively by these over the coming 18m.

Still see the capital return bonanza in a few years time, this is now being recognised in analyst models, though most see this as outside the 'investment horizon', and therefore it gets little credit in the valuations (which cluster at 2.30 - funny that..).

The short term question for us now is what would you pay for 20c p.a dividend, I think it could settle at 2.60 pre div, 2.50 after - providing 8% forward yield.

For the longer term investor a return to yield growth in FY18 will bring EPS upgrades, which should support the stock towards $3.00. In FY19 we will need to watch out for announcements about capex, but as management have explained pre-payments for deliveries 2023-on (777-200 replacement) are likely to begin in 2021.

I maintain that the improvements this company has made through the last few years (fleet, IT, lounges, processes, new routes, network alliances) set it up for a sustainably higher level of returns than in the past, and that short term earnings focused analysts don't properly account for this in either their estimates or the multiples they use to value AIR. With the NZX50 trading at a high multiple, and the outlook for NZ better than ever, AIR should gradually re-rate upwards from here.

Best, Mod

[Beagle]

From late last year:



Pleased with the recent result and expecting the yield improvement to roll in from here. What is clear is that sentiment has switched from cautious to neutral and happily seen the stock advance. The cost performance and fleet simplification benefits are starting to show up, and I expect analysts to continue to be surprised positively by these over the coming 18m.

Still see the capital return bonanza in a few years time, this is now being recognised in analyst models, though most see this as outside the 'investment horizon', and therefore it gets little credit in the valuations (which cluster at 2.30 - funny that..).

The short term question for us now is what would you pay for 20c p.a dividend, I think it could settle at 2.60 pre div, 2.50 after - providing 8% forward yield.

For the longer term investor a return to yield growth in FY18 will bring EPS upgrades, which should support the stock towards $3.00. In FY19 we will need to watch out for announcements about capex, but as management have explained pre-payments for deliveries 2023-on (777-200 replacement) are likely to begin in 2021.

I maintain that the improvements this company has made through the last few years (fleet, IT, lounges, processes, new routes, network alliances) set it up for a sustainably higher level of returns than in the past, and that short term earnings focused analysts don't properly account for this in either their estimates or the multiples they use to value AIR. With the NZX50 trading at a high multiple, and the outlook for NZ better than ever, AIR should gradually re-rate upwards from here.

Best, Mod

Many thanks modandum. I really appreciate your updated thoughts and couldn't agree more. A very well run company that's positioning itself extremely well with a very young modern fuel efficient fleet and good airline alliances. We are well positioned :)

[bull....]

hit 61.8% retracement level yesterday from bottom lows of 1.72 odd still looking good airlines index looking good too msci

[see weed]

Many thanks modandum. I really appreciate your updated thoughts and couldn't agree more. A very well run company that's positioning itself extremely well with a very young modern fuel efficient fleet and good airline alliances. We are well positioned :)
Likewise here, thanks modandm. Yesterday morning was thinking of topping up at 2.29-2.30 but thought would wait for a cheaper price later in afternoon, and ended up paying higher price later on in afternoon. Have learned one thing, go with your gut feeling, cause if you don't, somebody else will jump in or out before you. So now, what is going to happen today? Same as yesterday? Another big surge at end of day? Remember your gut feeling, don't miss out:D:t_up::D.

[winner69]

You have made this call a number of times over the last couple of years... Let's forget the $3 mark until it happens!! haha

And like last time when it gets to $3 it'll go to $3.20 plus

[see weed]

Here they come again, buyers building up:t_up:. I do think the big sellers at 2.38 and 2.40 may be claytons sellers;).

[Beagle]

air up 13% in two weeks.... i wonder how Couta is coping? :)

Probably been visiting the local Jaguar dealer :)...or if he's feeling especially brave he might be looking into buying one of these 1000 horsepower beautys https://www.youtube.com/watch?v=u2MLEkH4hIA

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

Average target now $2.23. For what its worth, (which isn't a lot in my opinion because analysts are simply following management's lead so you might as well do the same and draw your own conclusions), analysts are now forecasting higher earnings before tax in FY18 than FY17. I take their FY19 estimated earnings in particular with a large grain of salt...(an awful lot of guesswork built into their DCF's models that far out), and I reckon my crystal ball is at least as clear as there's.

Little birdie tells me there's A LOT of overseas interest in this bird at present, as evidenced by the late afternoon trading pattern see weed was referring too.
Bet those overseas investors can't believe how good the dividend yield is compared to airlines in their neck of the woods.

[JoeGrogan]

Damn i keep missing the boat to re up. Tried to get another parcel at 2.33 this morning but missed out. Might just wait to see what happens with the big sellers at 2.38

[see weed]

Damn i keep missing the boat to re up. Tried to get another parcel at 2.33 this morning but missed out. Might just wait to see what happens with the big sellers at 2.38
That's what I said yesterday at 2.30, also thought that at 2.20, 2.10, 2, 1.90, 1.80:D. ps Not many left at 2.38.

[winner69]

Damn i keep missing the boat to re up. Tried to get another parcel at 2.33 this morning but missed out. Might just wait to see what happens with the big sellers at 2.38

If you keen on buying just buy the god damned things ....especially as you seem to be an 'investor' rather than 'trader'

[JoeGrogan]

If you keen on buying just buy the god damned things ....especially as you seem to be an 'investor' rather than 'trader'

My initial purchase of AIR was an 'investment' you could say. However, my reasons for buying another lot is to trade them before the dividend is paid out rather than holding.

[winner69]

Market obviously thinks the $475m to $525m guidance is a load of the proverbial .....and that $600m plus is more likely.

If so maybe the 20 cent dividend will be 25 cents ......that be good

The man with the halo surely toying with us

[arc]

I thinking this rather steep rise has the feel of a bubble. Last time that happened we did a lemming dive to $1:80-ish

Thoughts folks

[Xerof]

Those dorky brokers who churned their client discretionaries have been caught with their pants down (again)
the uptrend identified from 2.02 cum HY and SPEC divs remains in force - higher highs and lower lows (yes I know the last low went a cent lower, but do I really care?)

wot downtrend?

[Beagle]

I thinking this rather steep rise has the feel of a bubble. Last time that happened we did a lemming dive to $1:80-ish

Thoughts folks

Big demand coming from overseas mate...have you checked the dividend yield of other regional carriers including Qantas and Virgin ? If you did you wouldn't be surprised at the demand from yield starved offshore investors.
Notice that as soon as they've announced the 10 cent divvy, confirmed the mid point of guidance, (yes Winner I think they are playing this ultra conservatively) and pointed out capex is soon to fall off the edge of a cliff everyone's now thinking they can sustain their 20 cents annual dividends, (something I was at pains to highlight at quite some length many months ago). Where else do you get a sustainable 8.33% fully imputed (11.6% gross) divvy yield in the airline industry ?... and that with a 10 cent divvy in five minutes time so to speak !

[see weed]

Whats this, went out to cut firewood and get back and it's up 5c:t_up:. Will go out and cut some more wood and see if it hits 2.50 by close:D.

[Beagle]

Whats this, went out to cut firewood and get back and it's up 5c:t_up:. Will go out and cut some more wood and see if it hits 2.50 by close:D.

LOL, we'll be ordering the most expensive drinks on the menu on Saturday if this keeps up :D Chop up a double lot more firewood please :)

[winner69]

Annual visitor arrival numbers reached 3.5 million this January

It was only a few years ago we raved when they reached 3 million

Irrespective of how they got here not much choice how to do internal air travel if that's there way of getting around

Jetstar couldn't cope. .....but AIR will boom .....as share price rises to $3 plus

[bonmaklad]

So it finally hit my 2 4 target and where I value air nz. I have an average of 1.795

If I decide to sell it would not be based on my negative feelings towards air nz but my selfish feelings of taking the moola and running :-)

[arc]

Big demand coming from overseas mate...have you checked the dividend yield of other regional carriers including Qantas and Virgin ? If you did you wouldn't be surprised at the demand from yield starved offshore investors.
Notice that as soon as they've announced the 10 cent divvy, confirmed the mid point of guidance, (yes Winner I think they are playing this ultra conservatively) and pointed out capex is soon to fall off the edge of a cliff everyone's now thinking they can sustain their 20 cents annual dividends, (something I was at pains to highlight at quite some length many months ago). Where else do you get a sustainable 8.33% fully imputed (11.6% gross) divvy yield in the airline industry ?... and that with a 10 cent divvy in five minutes time so to speak !

It would be most interesting to know which country is generating the bulk of the purchases. Im using a small cluster of 6 machines running some models and so far the american data is looking... medium to low, Im not yet sure but the DOW and S&P upticks may be mostly confidence driven. ( realising that confidnce is a prerequisite for market activity anyway)

I think we "down under" have a more realistic market and for our size some distinct quality companies, Aussie included... as much as we like to harass them at times., and beat them in sport. I think being in a small environment like ours actually helps one to both develop and keep a competitive edge, you have to be on your toes ALL the time, you cant let the giant market size/too big to fail, mentality of over there carry you along.

Any one else seeing the AIA + THL + AIR dance routine, its almost symbiotic.

Im also seeing positive flow on effects for Cafe owners, Tourist adventure operations and Motels. I must start to quantify the wine and beer consumption figures..

Yet another Rant/plug: Someone with some ba??s to get behind a "Very Rapid Rail" system linking the tourist spots... if we are going to bring the tourists in then at least we could deliver the scenery we are famous for... NOT THE ******* Auckland motorway for 4 hours just to reach Bombay, which I had last week. How about air nz cutting the wings off a good sized plane and mounting wheeled bogeys..(laugh) If your going to do it then do it with Style

[Raz]

Annual visitor arrival numbers reached 3.5 million this January

It was only a few years ago we raved when they reached 3 million

Irrespective of how they got here not much choice how to do internal air travel if that's there way of getting around

Jetstar couldn't cope. .....but AIR will boom .....as share price rises to $3 plus

Watching with interest and amusement :-)

Firstly a lot more tourist are travelling around Auckland and surrounds than coming south this year. Queenstown is running on lower occupancy than last year while most tours are coming down the west coast of the SI which is consisting of EU and US tourist, not many from asia. So I don't believe domestic demand for flying is as great as the increase in tourist numbers would indicate.

I found it very interesting the AIR management is more confident in 2018 as i had expected competition to show more in the first half of 2018 as i note unadvertised discounting on international routes more frequent to date and to even a lower price level than last year. Sill discounting provides no indication of volume available. It has been a great forward indicator that I have used for trading in the past however the relationship I have observed may have been broken.

Heavy overweight in AIR even though I have started to sell my trading position acquired for the dividend play. Investment parcel will be held for now.

[Raz]

So it finally hit my 2 4 target and where I value air nz. I have an average of 1.795

If I decide to sell it would not be based on my negative feelings towards air nz but my selfish feelings of taking the moola and running :-)

Why not take a mixed approach..you can take the dividend and more in the price movement for at least part of you parcel if you are happy with the payout.

[Beagle]

Anyone else notice today's breakout over $2.40 was on massive volume, five million shares ! No TA expert by any stretch of the imagination but I think the volume and $2.40 breakout are significant factors from a TA perspective. Disc Holding for long term dividend yield.

[Raz]

Anyone else notice today's breakout over $2.40 was on massive volume, five million shares ! No TA expert by any stretch of the imagination but I think the volume and $2.40 breakout are significant factors from a TA perspective. Disc Holding for long term dividend yield.

How could you not notice the volume and price points today. Hard to read anything into it. May be just one Institution or broader based support...

[Snow Leopard]

Anyone else notice today's breakout over $2.40 was on massive volume, five million shares ! No TA expert by any stretch of the imagination but I think the volume and $2.40 breakout are significant factors from a TA perspective. Disc Holding for long term dividend yield.

Turnover today [1-Mar-2017] was 2,500,537

Average daily turnover for the last year [up to and including 1-Mar-2017] is 1,901,771.

Best Wishes
Paper Tiger

[winner69]

Turnover today [1-Mar-2017] was 2,500,537

Average daily turnover for the last year [up to and including 1-Mar-2017] is 1,901,771.

Best Wishes
Paper Tiger

ANZ Sec said 5,001,074 / NZX said 2,500,537

Total sold plus total bought is 5,001,074 - is that how ANZ work it out?






Just fuzzy logic ....seeing it applied to all stocks yesterday

[Snow Leopard]

ANZ Sec said 5,001,074 / NZX said 2,500,537

Total sold plus total bought is 5,001,074 - is that how ANZ work it out?






Just fuzzy logic ....seeing it applied to all stocks yesterday

Random Acts of Programming - but in this case not mine :p

Best Wishes
Paper Tiger

[Raz]

ANZ Sec said 5,001,074 / NZX said 2,500,537

Total sold plus total bought is 5,001,074 - is that how ANZ work it out?






Just fuzzy logic ....seeing it applied to all stocks yesterday

Thanks... shows some of us were awake last night..unlike myself :-)

[Beagle]

5 million was what showed beside the AIR ticker on CNBC and on ANZ securities website. US airlines stocks up strongly overnight...another good day for AIR after two very strong ones in a row already ?

[winner69]

What chance of a 25 cent divie this year when $600m npbt is announced (another 15 cents to go that is)


That would support a $3 plus share price

[sb9]

What chance of a 25 cent divie this year when $600m npbt is announced (another 15 cents to go that is)


That would support a $3 plus share price

Guess that depends a lot on how fuel prices go for next 4 months, if they stay where they currently are there is no reason to there won't be a 15c final divvy..

In the meantime, exactly a week to go before it goes ex-divvy and it appears as though buyers starting to pile up again after early morning profit taking.

[Arbroath]

Guess that depends a lot on how fuel prices go for next 4 months, if they stay where they currently are there is no reason to there won't be a 15c final divvy..

In the meantime, exactly a week to go before it goes ex-divvy and it appears as though buyers starting to pile up again after early morning profit taking.

I personally don't think many analysts and some posters here are grasping what AIR management have been quite clear about. They intend to pay a "sustainable" dividend which barring a major shock to me is 10cps every 6 months until probably 2019 at which point, all things going well, they might do a special of 15-20cps as the capex falls off a cliff as long as FCF remains strong. That's my take.

No cuts, no increases....just a very satisfactory 10cps every 6 months.

[Raz]

I personally don't think many analysts and some posters here are grasping what AIR management have been quite clear about. They intend to pay a "sustainable" dividend which barring a major shock to me is 10cps every 6 months until probably 2019 at which point, all things going well, they might do a special of 15-20cps as the capex falls off a cliff as long as FCF remains strong. That's my take.

No cuts, no increases....just a very satisfactory 10cps every 6 months.

That's the one, although it has been the best trading share eva at this point:)

[777]

Any capex reduction is short term. If they are going to continue to grow then new aircraft are going to be needed along with older ones replaced. The 777-200's are all over 10 years old now.

[Robomo]

Any capex reduction is short term. If they are going to continue to grow then new aircraft are going to be needed along with older ones replaced. The 777-200's are all over 10 years old now.

The 777-200 should be good for 20 years - well maintained and being long-haul will not have been subject to a high number of takeoffs and landings. From memory the first of these was delivered about 2004 so replacement won't be happening till close to 2024 (7 years away).

ANZ originally ordered 8 787s with options on a further 8. They have 9 now with another three to come. I'm betting that the 787s will eventually replace all eight 777-200s (similar pax load and range with much better operating costs) so by 2027 we'll have 20 of the 787's. Then the seven 777-300s will be due to be replaced, possibly with 777x. Not to mention the twenty three, 49 seat Q300s that will probably need replacing mid 2020s.

So, ANZ will have a relative capex holiday from 2019 - 2024, then it's all on again! Or that's what I'm picking!

[Beagle]

I personally don't think many analysts and some posters here are grasping what AIR management have been quite clear about. They intend to pay a "sustainable" dividend which barring a major shock to me is 10cps every 6 months until probably 2019 at which point, all things going well, they might do a special of 15-20cps as the capex falls off a cliff as long as FCF remains strong. That's my take.

No cuts, no increases....just a very satisfactory 10cps every 6 months.

Bingo. They actually went slightly outside their self imposed 45-55% gearing range (55.9% as at 31 December 2016) to maintain the 10 cps interim on the basis that we're starting to close in on a huge capex holiday in two years time. I am fully expecting a final of exactly 10 cps this year, nothing more regardless of the fact that I think the upper end of their updated forecast range ($525m) is easily beatable. Northing wrong with the divvy yield at 20 cps per annum fully imputed, I think I calculated it yesterday at 11.6% gross. As long as its sustainable, and I believe it is, who can complain about that sort of return in a low interest rate environment !


The 777-200 should be good for 20 years - well maintained and being long-haul will not have been subject to a high number of takeoffs and landings. From memory the first of these was delivered about 2004 so replacement won't be happening till close to 2024 (7 years away).

ANZ originally ordered 8 787s with options on a further 8. They have 9 now with another three to come. I'm betting that the 787s will eventually replace all eight 777-200s (similar pax load and range with much better operating costs) so by 2027 we'll have 20 of the 787's. Then the seven 777-300s will be due to be replaced, possibly with 777x. Not to mention the twenty three, 49 seat Q300s that will probably need replacing mid 2020s.

So, ANZ will have a relative capex holiday from 2019 - 2024, then it's all on again! Or that's what I'm picking!

It wouldn't surprise me if they went to an all Dreamliner widebody fleet if the price is right. As you will know they have nine online now and have leased another one coming in Fy19 and in addition have another three coming in the next couple of years, (total 9 owned now, three confirmed coming and one leased) but I believe they have another 6 exercisable options, (possibly at pretty attractive prices). I think they'll exercise those options in due course and end up with a fleet of 18 owned Dreamliners with any others required being leased. Having just the one type, (fleet simplification taken to the next level), of a really efficient medium sized aircraft like that for long haul seems to make a lot of sense to me for the size of the company and the routes involved. This would have the additional benefit of providing a consistent uniform experience right across the long haul.

[allfromacell]

Decided to take some profit and sold 1/3 of my holdings for $2.445. Still holding long term but feel the SP has got a bit ahead of itself.

[bonmaklad]

Why not take a mixed approach..you can take the dividend and more in the price movement for at least part of you parcel if you are happy with the payout.

Need to think about it over the weekend. I believe we will hit $3. However I do not know how long this will be.

[dobby41]

Need to think about it over the weekend. I believe we will hit $3. However I do not know how long this will be.

LOL - I believe it will hit $5 - maybe 20 years from now.
Of course it will hit $3 sometime (unless they go out of business).

[winner69]

LOL - I believe it will hit $5 - maybe 20 years from now.
Of course it will hit $3 sometime (unless they go out of business).

How about $3 by end of April - a bit more specific

That be when Chris upgrades guidance ......and his halo will become so bright they turn the lights off at HQ. how times have changed - less than a year ago management sucked and were useless.

[bonmaklad]

How about $3 by end of April - a bit more specific

That be when Chris upgrades guidance ......and his halo will become so bright they turn the lights off at HQ. how times have changed - less than a year ago management sucked and were useless.


IfIcometotheideathatit'saprilaswell...thennowayIsh ouldsellhaha

[dobby41]

IfIcometotheideathatit'saprilaswell...thennowayIsh ouldsellhaha

Whaat? .

[winner69]

Whaat? .

Just his way of saying he's not selling because AIR is going to be $3 by end of April

This happens when you get excited

[bonmaklad]

Whaat? .

If I come to the idea that it's april as well...then no way I should sell haha

Missing all my spaces haha

I am not sure. I need to sit down and think and do some technical analysis. I can see already over 600k sitting in the sell column this morning. Profit taking might be too great to see us go to $3 by April. If it is even going near 2.8 by april/june. I would stay in :)

[Rossimarnz]

While not disagreeing with those who speak of the mythical $3, I think the rise will be slower than anticipated by some. I anticipate a lot of sellers looking to recoup recent losses as the price rises could make for a bumpy and prolonged ascent to cruising altitude.

Disc - Holding happily having purchased at $2.17 on Aug-16 dividend announcement day.

[winner69]

While not disagreeing with those who speak of the mythical $3, I think the rise will be slower than anticipated by some. I anticipate a lot of sellers looking to recoup recent losses as the price rises could make for a bumpy and prolonged ascent to cruising altitude.

Disc - Holding happily having purchased at $2.17 on Aug-16 dividend announcement day.

The mythical $3 is actually $3.24 (even though it was $16 at the turn of the century) and when it gets over that it will be a new high (OK 15 year high) .....just like AIR with its record or near record profits

Sooner than later I reckon

[Raz]

While not disagreeing with those who speak of the mythical $3, I think the rise will be slower than anticipated by some. I anticipate a lot of sellers looking to recoup recent losses as the price rises could make for a bumpy and prolonged ascent to cruising altitude.

Disc - Holding happily having purchased at $2.17 on Aug-16 dividend announcement day.

Post of the week..be careful when the cheer leaders come out:-) Too many walking wounded on this share for some not to cash out...slow any potential rise.

Sold a few over the past couple of days from the trading pile...a quick 20-30 cents per share is nice business without being greedy...

[bonmaklad]

and I am out. The recent sell down from the Chief Operational Integrity & Standards Officer made my case for me. I hope I am wrong and you guys shoot to 2.6 but I am new to investing and have made my 35% in 6 months and I am very happy as AirNZ was 100% of my portfolio until just now :)

I am sure i'll be buying back in soon enough

[Beagle]

Captain David Morgan is a recidivist offender, (if you call such a thing a moral offence). Personally I am not reading anything into that other than some people like to invest their money / and or spend it in places other than where they work.

[winner69]

Captain David Morgan is a recidivist offender, (if you call such a thing a moral offence). Personally I am not reading anything into that other than some people like to invest their money / and or spend it in places other than where they work.

He's got a good title now that David - was just Chief Pilot before ha ha. That was decent payday though eh. Does he miss out on a $32,000 divie?

Management seem to have good financial advisers with a trading bent I reckon. They were pretty good at picking the top the last rash of selling weren't they .....do we expect to see a series of these anouncements over next few weeks?

[bonmaklad]

He's got a good title now that David - was just Chief Pilot before ha ha. That was decent payday though eh. Does he miss out on a $32,000 divie?

Management seem to have good financial advisers with a trading bent I reckon. They were pretty good at picking the top the last rash of selling weren't they .....do we expect to see a series of these anouncements over next few weeks?

This_is_what_I_am_thinking_as_well

[Beagle]

He's got a good title now that David - was just Chief Pilot before ha ha. That was decent payday though eh. Does he miss out on a $32,000 divie?

Management seem to have good financial advisers with a trading bent I reckon. They were pretty good at picking the top the last rash of selling weren't they .....do we expect to see a series of these anouncements over next few weeks?

The fancy pants title probably came with a further pay rise :eek2: Yes he misses the divvy and average sale price was $2.31 so maybe not quite such good timing this time.
Yes they seemed to pick the right time to sell last time, (management in general). A series of these announcements would be a little disconcerting but as I am holding a core portfolio position primarily for long term dividend income I am happy to ride the aircoaster long term with seatbelt firmly fastened, tray table folded away and motion sickness pills on standby :)

[RTFQ]

Captain David Morgan is a recidivist offender, (if you call such a thing a moral offence). Personally I am not reading anything into that other than some people like to invest their money / and or spend it in places other than where they work.
A birdy says hes building a house in central.Gone over budget.

[Raz]

The fancy pants title probably came with a further pay rise :eek2: Yes he misses the divvy and average sale price was $2.31 so maybe not quite such good timing this time.
Yes they seemed to pick the right time to sell last time, (management in general). A series of these announcements would be a little disconcerting but as I am holding a core portfolio position primarily for long term dividend income I am happy to ride the aircoaster long term with seatbelt firmly fastened, tray table folded away and motion sickness pills on standby :)


You know a string of announcements will follow at some point as they enable a culture to cash out regardless of the reason. It just creates a lot more uncertainty to the market which works against investors. It certainly is a negative point in my view to AIR.

[vin]

Agreed, there will be a significant portion of traders that had been burnt over the last while.. I think it'll be a slow process to get back to the $3 stage.

[Beagle]

You know a string of announcements will follow at some point as they enable a culture to cash out regardless of the reason. It just creates a lot more uncertainty to the market which works against investors. It certainly is a negative point in my view to AIR.

Agreed. To be fair, (and I know we've discussed this before), looking from the top, Chris Luxon's base salary at around $1.5m Kiwi, (going off memory) is pretty modest for a company of that size with 11,000 employees so senior management's remuneration package is deliberately designed to be incentive based depending upon the financial performance of the company so to quite a degree their interests are indeed aligned with shareholders. The other point is would you invest most of your money in the same company that employs you if you were in their shoes ?

[Raz]

Agreed. To be fair, (and I know we've discussed this before), looking from the top, Chris Luxon's base salary at around $1.5m Kiwi, (going off memory) is pretty modest for a company of that size with 11,000 employees so senior management's remuneration package is deliberately designed to be incentive based depending upon the financial performance of the company so to quite a degree their interests are indeed aligned with shareholders. The other point is would you invest most of your money in the same company that employs you if you were in their shoes ?


When I was in executive role in the US we had heavy internal cultural pressure not to sell and no one really did unless it was an extreme personal situation...same deal with a few boards been on the AIM secondary market in the UK. I can think of only one occasion that did occur and he talked to the CEO who in turn talked to the Board before it happened. Still base salaries were higher as you mention, 1.5 million hardly gets you anything substantial in executive roles. In the fortune 500 company it was the market perception while with the others it was the same however also a lot less liquid market, with a company on the up..why sell.

Having said that Air NZ is not internationally a big company with a lack of volume on shares and overall shareholding movement. Personally their remuneration policy seems a little out of balance and although not intended last year a few sell offs by executives of approx. 400k shares was substantial in relation to daily volume and personally believe had a disproportionate effect on the market at a key pivot point in price. Hardly aligned with investors.

Have a great weekend..feel for me I have to spend in it all in Auckland -)

[winner69]

Agreed. To be fair, (and I know we've discussed this before), looking from the top, Chris Luxon's base salary at around $1.5m Kiwi, (going off memory) is pretty modest for a company of that size with 11,000 employees so senior management's remuneration package is deliberately designed to be incentive based depending upon the financial performance of the company so to quite a degree their interests are indeed aligned with shareholders. The other point is would you invest most of your money in the same company that employs you if you were in their shoes ?

Annual Report has Chris's 2016 total remuneration at $4.7m of which $1.5m in performance rights remain at risk

The leadership team share ot about $16m between themselves

[Beagle]

Base salary $1.47m, short term incentive $1.6m, (who can complain when they made $800m before tax in 2016), and the $1.5m in performance rights.
He had the conviction of his beliefs to stand up to the other directors and CEO of Virgin and returned 25 cents per share of capital to shareholders, money that would otherwise be invested in a non performing pup.
I'd say he well and truly earned his keep in 2016.

[see weed]

Just a little reminder, you have until 5pm to get your full of AIR shares, to receive the big juicy 10c div:).

[RTFQ]

Is it the 10th already?? my watch is wrong.


Just a little reminder, you have until 5pm to get your full of AIR shares, to receive the big juicy 10c div:).

[brend]

Is it the 10th already?? my watch is wrong.

ex divy is 9th

https://nzx.com/markets/NZSX/securities/AIR/dividends

[bung5]

https://www.airnewzealand.co.nz/dividend-history