AIR - Air NZ.

[bung5]

Confusion over record date and ex div I guess

[winner69]

This 11Ants Analytics company is pretty clued up - good that AIR involved

[sb9]

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

Well, looks like some big keen sellers stacked along the way with some hefty volumes...

[arc]

ex-div on the 9th
With the last change to settlements now being 2 days, would those hoping to preempt the market and sell on the 10th still be on record for the div, or would they have to wait till the 14th.

[sb9]

ex-div on the 9th
With the last change to settlements now being 2 days, would those hoping to preempt the market and sell on the 10th still be on record for the div, or would they have to wait till the 14th.

if you sell today, you don't get divvy and if you buy today you do get divvy...simple as that.

[arc]

if you sell today, you don't get divvy and if you buy today you do get divvy...simple as that.

Not selling mine.. Im a long term holder... but just had a question posed to me by someone.

[sb9]

Not selling mine.. Im a long term holder... but just had a question posed to me by someone.

Its your call, my comments were around the divvy part and dates relating to that, that's it!!!

[vin]

Where do we see SP dropping to tomorrow?

[couta1]

Where do we see SP dropping to tomorrow? The question should be, where do we see the share price in 2 weeks time? Once this great Wall of overseas money dries up, I see the price going back to around $2.25ish.

[Jantar]

Where do we see SP dropping to tomorrow?
Probably to around $2.32. I would hope that it might go as low as $1.72 so I can buy more and reduce my average cost, but somehow I do not see that happening.

[Beagle]

Where do we see SP dropping to tomorrow?

I am holding long term for the dividend income so within reason don't care but its worth pointing out that for normal sized dividends most NZX stocks recover the dividend paid within a few weeks most of the time.
That said I think most of the 10 cents has already been priced in so a semi permanent drop to circa $2.30 wouldn't surprise me.

[see weed]

I am holding long term for the dividend income so within reason don't care but its worth pointing out that for normal sized dividends most NZX stocks recover the dividend paid within a few weeks most of the time.
That said I think most of the 10 cents has already been priced in so a semi permanent drop to circa $2.30 wouldn't surprise me.
Not to worried about sp dropping 10 or 20c. As long as I can lock in the div and then sell a few for a loss by the 31/3/17 for tax purposes. My av price atm is $2.05 so have about 36c wiggle room:cool:.

[Baa_Baa]

Big-wigs active again today.

[winner69]

Not to worried about sp dropping 10 or 20c. As long as I can lock in the div and then sell a few for a loss by the 31/3/17 for tax purposes. My av price atm is $2.05 so have about 36c wiggle room:cool:.

Losses when average price is $2.05?

[couta1]

Losses when average price is $2.05? Yes I was wondering the same thing as apart from a separate day/ short term trading parcel then all losses can only be claimed of your average buy in price, in this case $2.05 or less.

[winner69]

Yes I was wondering the same thing as apart from a separate day/ short term trading parcel then all losses can only be claimed of your average buy in price, in this case $2.05 or less.

Maybe a fellow poster who we won't name does his tax returns .......lol

[couta1]

Maybe a fellow poster who we won't name does his tax returns .......lol That be Creative Accounting INC aye winner.

[see weed]

Maybe a fellow poster who we won't name does his tax returns .......lol
It' a long story I would like to share at the next st meeting. Basically have made too much share trading and want to make a little loss so will not have to pay to much tax on profits. I would be happy for sp to drop back to 2.10 so as to make a loss on the last bundle bought between 16/2/17 and 28/2/17 at av price of $2.179c Already had a bundle bought in Oct last year at av price of $1.75c, which are not going to sell. So tomorrow is going to be a busy day.

[see weed]

That be Creative Accounting INC aye winner.
The IRD do my tax returns, after I do all the accounting. All they do is full in the dots;).

[Snow Leopard]

It' a long story I would like to share at the next st meeting. Basically have made too much share trading and want to make a little loss so will not have to pay to much tax on profits. I would be happy for sp to drop back to 2.10 so as to make a loss on the last bundle bought between 16/2/17 and 28/2/17 at av price of $2.179c Already had a bundle bought in Oct last year at av price of $1.75c, which are not going to sell. So tomorrow is going to be a busy day.

FIFO - No ?

Best Wishes
Paper Tiger

[couta1]

FIFO - No ?

Best Wishes
Paper Tiger And don't forget LIFO, but why complicate things when using average cost is the simplest legit method to use.

[Snow Leopard]

...but why complicate things when using average cost is the simplest legit method to use.

No it isn't. :p

Best Wishes
Paper Tiger

[couta1]

No it isn't. :p

Best Wishes
Paper Tiger I won't be drawn into Cattie arguments, so I'll let you argue with yourself on that one.:p

[Beagle]

Maybe a fellow poster who we won't name does his tax returns .......lol

Just to be clear...The hound does not have his paw prints on this.

[winner69]

AIR seem to use the word up-gauging a lot. Even AIA seem to use it

Is it just another way of saying bigger planes or is there a proper scientific / industry definition?

[777]

Using a bigger aircraft than what is usually used.

[Raz]

http://www.stuff.co.nz/business/90210972/air-new-zealand-qantas-jetstar-and-virgin-join-forces

Watch out airports...

[bull....]

nice drop in oil last night

[Onion]

http://www.stuff.co.nz/business/90210972/air-new-zealand-qantas-jetstar-and-virgin-join-forces

Watch out airports...

AIR: Hello Auckland air control. Air NZ flight 12 from Sydney requesting landing
AIA: Hello AIR 12, Permission to land from the west, please pay $2500
AIR: No thanks, I'll just circle till your landing fee drops to $2000 thanks

[Bobdn]

Good for my AIR NZ shares bad for BHP shares, my way of hedging :)

[Beagle]

http://www.stuff.co.nz/business/90210972/air-new-zealand-qantas-jetstar-and-virgin-join-forces

Watch out airports...

Hard hitting extremely well qualified Chairman appointed. ACCC have real teeth. Airlines appear deadly serious about working towards change.
Passengers might benefit too. $42 to park at Auckland airports uncovered standard car park for one day is price gouging when on occasion on special one one way flights around the country can be had for less !

[ddrone]

What's driving the downward pressure today? Depth looks terrible currently.

[Nasi Goreng]

Can someone please confirm ex divi for me. I think I got it but on Air results it says divi will be paid to shareholders on record at COB 10th March.

So is the reason for it going ex divi today because it takes two days for the shares to officially change hands?

[couta1]

The question should be, where do we see the share price in 2 weeks time? Once this great Wall of overseas money dries up, I see the price going back to around $2.25ish. Already hit $2.25, make that $2.18-$2.20 in 2 weeks time, just shows how big overseas money was holding up the price aye.

[BC_Doc]

Can someone please confirm ex divi for me. I think I got it but on Air results it says divi will be paid to shareholders on record at COB 10th March.

So is the reason for it going ex divi today because it takes two days for the shares to officially change hands?

Went ex div COB yesterday to my understanding.

[couta1]

Can someone please confirm ex divi for me. I think I got it but on Air results it says divi will be paid to shareholders on record at COB 10th March.

So is the reason for it going ex divi today because it takes two days for the shares to officially change hands? Forget about the record date, if you buy before ex date, you get the divvy, if you buy after ex date, you don't, simple as that.

[sb9]

Already hit $2.25, make that $2.18-$2.20 in 2 weeks time, just shows how big overseas money was holding up the price aye.

Or is it seeweed doing all the selling, must be in hurry :p

[777]

Or is it seeweed doing all the selling, must be in hurry :p

seeweed's logic defies me. A loss that has happened and can be used against your profits is one thing but to hope and achieve a cash loss to reduce your tax is the quickest way to lose money.

[Kelvin]

Can someone please confirm ex divi for me. I think I got it but on Air results it says divi will be paid to shareholders on record at COB 10th March.

So is the reason for it going ex divi today because it takes two days for the shares to officially change hands?

Same question comes up every single dividend, we should have a sticky post to explain this :p

[brend]

yeah.....losing $1 to gain 33cent back, unless im missing something

[couta1]

Same question comes up every single dividend, we should have a sticky post to explain this :p Share Investing 101, everyone should know it off by heart within a short space of time.

[Nasi Goreng]

seeweed's logic defies me. A loss that has happened and can be used against your profits is one thing but to hope and achieve a cash loss to reduce your tax is the quickest way to lose money.

I 100% agree. I would love my tax bill to be huge because that would mean I've had a great year. I can't imagine myself willing a stock price to go down so I can lose money and therefore pay less tax.

[Leftfield]

seeweed's logic defies me. A loss that has happened and can be used against your profits is one thing but to hope and achieve a cash loss to reduce your tax is the quickest way to lose money.

I often admire SW's skills in stock picking skills and market timing, however his type of short term trading and resulting tax complications are the reasons I stick to long term investment decisions.

Every year that I do not hear from the IRD is a good year for me!

[Raz]

I often admire SW's skills in stock picking skills and market timing, however his type of short term trading and resulting tax complications are the reasons I stick to long term investment decisions.

Every year that I do not hear from the IRD is a good year for me!

AIR is actually one of the simpler stocks to pick for trading...I pay a heap of tax and thats the only way to successfully trade.

[Beagle]

The shares have dropped 10 cents after going ex a 10 cent dividend, exactly what common sense would suggest and are clearly noted in the trading system as trading ex dividend.
AIR pays its dividends very promptly, something other companies would do well to try and emulate.

[sb9]

The shares have dropped 10 cents after going ex a 10 cent dividend, exactly what common sense would suggest and are clearly noted in the trading system as trading ex dividend.
AIR pays its dividends very promptly, something other companies would do well to try and emulate.

Exactly, you get the divvy in your account by next Friday. Don't think any other company on NZX pays divvy with such short turnaround time. Looks like most of early losses are fully recovered, expecting this to push back to 240s range soon.

[Beagle]

Exactly, you get the divvy in your account by next Friday. Don't think any other company on NZX pays divvy with such short turnaround time. Looks like most of early losses are fully recovered, expecting this to push back to 240s range soon.

The fact that the government is the major shareholder has nothing whatsoever to do with this highly unusual super prompt payment system AIR uses :D

I've posted many times on here regarding my theory regarding share price recovery of dividends paid. Usually within a few weeks, if its a gargantuan one like the 35 cents last year it can take 2-3 times longer as was the case last year. Selling any share cum dividend and hoping it will drop more than the dividend in the short term is a "brave" call. The odds from the study I have seen are stacked pretty heavily against such a strategy being successful. I guess if people are adverse to more dividend income in the 2017 tax year because they're already well over $70,000 income and paying tax at 33% and the dividend is only imputed to 28%, (a resulting 5% tax impost) some sort of argument can be made for the above strategy but swimming against the tide can be hard work.

[winner69]

Hey seeweed - you should mosey over to WHS

A 10 cent divie in a few weeks - get that for $2.50 at the moment, probably cheaper tomorrow

[Bobdn]

Oil getting cheaper. Stockpiles stockpiling. Still looks like it's a good time to own an airline.

[see weed]

Yesterday,successfully sold 17000 at a $1363 loss:), but sold another 31000 at $3202 profit:t_down:. Cannot sell any more until after 31/3/17, because they in the green $37000 and will have to pay to much tax, but am looking forward to $14300 div. next week. Time to stock up on a bit of STU and a lot of SPK their div coming soon;).

[winner69]

Yesterday,successfully sold 17000 at a $1363 loss:), but sold another 31000 at $3202 profit:t_down:. Cannot sell any more until after 31/3/17, because they in the green $37000 and will have to pay to much tax, but am looking forward to $14300 div. next week. Time to stock up on a bit of STU and a lot of SPK their div coming soon;).

Not into WHS then - used to be where everyone gets a bargain. Divie 10 cents 31/3

[Beagle]

https://www.nbr.co.nz/article/carry-kiwis-lax-frustrations-first-b737-max-9-and-qatars-suites-four-ng-200490

Chris been busy earning his salary.

[see weed]

Not into WHS then - used to be where everyone gets a bargain. Divie 10 cents 31/3
Not this time around. STU and SPK at the moment.

[couta1]

Not this time around. STU and SPK at the moment. Wise Man see weed, WHS looks like a slow moving train wreck currently, post divvy price may not recover the divvy amount for a long time indeed.

[tim23]

It might recover its dividend though?

[RupertBear]

Cant decide whether to get out now before it goes down or hold a little longer incase it keeps going up :confused:...hmmm...so nothing new I guess! ;)

[h2so4]

Cant decide whether to get out now before it goes down or hold a little longer incase it keeps going up :confused:...hmmm...so nothing new I guess! ;)

Well! Why not sell some?

[RupertBear]

Well! Why not sell some?

Not a bad idea! :D

[babymonster]

i believe the management team has traded more often than me in the past year... :(

[Balance]

i believe the management team has traded more often than me in the past year... :(

Been right so far to sell when management sell.

[Xerof]

except Directors have only bought in recent times, and the CEO exercised his options and has NOT sold. Senior management not held in same light as far as I'm concerned, as it's part of their package, off a significantly lower base salary. remember a lot of them also sold well below $2

but I have empathy with your general comment balance

todays little retrace may actually have more to do with AIR being removed from the NZX20 index?

[couta1]

Big overseas money not buying today, I wonder if they have their fill, or perhaps they are taking a breather after seeing management selling a few.

[forest]

Big overseas money not buying today, I wonder if they have their fill, or perhaps they are taking a breather after seeing management selling a few.

CFO sold more than 70% of his shares, CCO sold close to 50% and COO selling more than 600 thousand all at the same time is material in my books.
AIR seem to give performers shares and options away to their employees with ease so no doubt the company will replenish those shares in the future. Still this sort of selling can not build any confidence for retail share holders.

[couta1]

CFO sold more than 70% of his shares, CCO sold close to 50% and COO selling more than 600 thousand all at the same time is material in my books.
AIR seem to give performers shares and options away to their employees with ease so no doubt the company will replenish those shares in the future. Still this sort of selling can not build any confidence for retail share holders. A few was a deliberate understatement forest.

[iceman]

Couta1 you would be selling quite a few if you knew how mates and I are ripping through your grog in the lounge in Buenos Aires right now 😀 Divies will have to be reduced

[Joshuatree]

CFO sold more than 70% of his shares, CCO sold close to 50% and COO selling more than 600 thousand all at the same time is material in my books.
AIR seem to give performers shares and options away to their employees with ease so no doubt the company will replenish those shares in the future. Still this sort of selling can not build any confidence for retail share holders.

Thanks Forest; i hadn't picked up on that. Thats a warning signal for sure .

[44wishlists]

todays little retrace may actually have more to do with AIR being removed from the NZX20 index?

Hello Xerof, may I ask where did you find out about this piece of news please?

[winner69]

So management have cashed up (sold) over 2.5 million shares this month - just boosting the pay packet

Senior management team (9) total remuneration F16 was over $15 million

Some say well deserved - I say what a junket this is

[couta1]

So management have cashed up (sold) over 2.5 million shares this month - just boosting the pay packet

Senior management team (9) total remuneration F16 was over $15 million

Some say well deserved - I say what a junket this is Money for jam aye winner, I wonder if they would like to spend a few years working as managers in a large retirement village for under 100k a year.

[777]

Hello Xerof, may I ask where did you find out about this piece of news please?

https://nzx.com/files/attachments/254701.pdf

[winner69]

Hello Xerof, may I ask where did you find out about this piece of news please?

Replaced by A2 Milk - funny eh

[Beagle]

So management have cashed up (sold) over 2.5 million shares this month - just boosting the pay packet

Senior management team (9) total remuneration F16 was over $15 million

Some say well deserved - I say what a junket this is

Its a very large organization with approx. 11,000 employees. If you don't pay well you don't attract top talent. Compare AIR's performance with how senior management at Virgin have been performing for their shareholders :eek2:
Senior pilots are also paid very well but would you rather have someone on the controls who's come up right from base level through the flight school ranks and has 20,000 hours commercial experience landing at Wellington in a 30 knot crosswind or someone from Jetstar trained predominantly on a simulator ?

[JeremyALD]

Its a very large organization with approx. 11,000 employees. If you don't pay well you don't attract top talent. Compare AIR's performance with how senior management at Virgin have been performing for their shareholders :eek2:
Senior pilots are also paid very well but would you rather have someone on the controls who's come up right from base level through the flight school ranks and has 20,000 hours commercial experience landing at Wellington in a 30 knot crosswind or someone from Jetstar trained predominantly on a simulator ?

Don't make me scared Roger. I'm flying Jetstar tomorrow to Wellington!

[winner69]

Yikes - the Air NZ Senior Management team is less diverse than Heartlands

Of the 10 in the team only 1 female

Guess what - yes it's the Chief People Officer

Shocking stuff - not proud of my company

A recent study from MSCI found companies with strong female leadership generated a return on equity of 10.1 percent per year versus 7.4 percent for those without a critical mass of women at the top

[BlackPeter]

Don't make me scared Roger. I'm flying Jetstar tomorrow to Wellington!

... and I am sure you will be fine. How do they say ...they always come down, one way or another :sleep:;

No, seriously - I don't think that Jetstar has a worse safety record than AIR. What they however do offer is less and inferior service ... including the option to sell you a ticket but to not carry you at all if it doesn't suit them.

[Onion]

Yikes - the Air NZ Senior Management team is less diverse than Heartlands

Of the 10 in the team only 1 female

...

A recent study from MSCI found companies with strong female leadership generated a return on equity of 10.1 percent per year versus 7.4 percent for those without a critical mass of women at the top


What Makes a Team Smarter? More Women

There’s little correlation between a group’s collective intelligence and the IQs of its individual members. But if a group includes more women, its collective intelligence rises.

The research: Professors Woolley and Malone, along with Christopher Chabris, Sandy Pentland, and Nada Hashmi, gave subjects aged 18 to 60 standard intelligence tests and assigned them randomly to teams. Each team was asked to complete several tasks—including brainstorming, decision making, and visual puzzles—and to solve one complex problem. Teams were given intelligence scores based on their performance. Though the teams that had members with higher IQs didn’t earn much higher scores, those that had more women did.


https://hbr.org/2011/06/defend-your-research-what-makes-a-team-smarter-more-women

Not very comforting for the males amongst us!

[winner69]

“Know the power of women in leadership. SHE makes a difference.”

Fearless Girl - Statue put up by State Street Global Advisors .....to encourage companies to be diverse at A senior level

[winner69]

What's going on with AIR - those managers sure know how to time their cashing in their bonuses by selling shares eh

At this rate, with no more excitement for a while, could drift back to sub $2

[RupertBear]

What's going on with AIR - those managers sure know how to time their cashing in their bonuses by selling shares eh

At this rate, with no more excitement for a while, could drift back to sub $2

I sold half yesterday morning and then the other half after reading the managers had sold some so I missed todays drop. Feeling a tad lucky but they may take off again tomorrow, who would know! :confused:

[bull....]

I sold half yesterday morning and then the other half after reading the managers had sold some so I missed todays drop. Feeling a tad lucky but they may take off again tomorrow, who would know! :confused:

i sold 75% mine on ex day the bounce after ex was icing on the cake. airlines index down this mth so far so no reason air wont mimic it and drectors selling must indicate they think the price is good.

[couta1]

I sold half yesterday morning and then the other half after reading the managers had sold some so I missed todays drop. Feeling a tad lucky but they may take off again tomorrow, who would know! :confused: Well done RB, it won't take off again for a while unless the big overseas money returns or we get a profit upgrade, big money vacated the premises a couple of days ago. Looks like a slow drift down from here, from a TA viewpoint, IMO.

[allfromacell]

Meanwhile the oil glut continues and AIR continues to make well north of a million bucks a day. Hoping to pick some more up closer to $2!

http://www.marketwatch.com/story/oil-prices-slide-to-lowest-in-four-months-on-rising-us-rig-count-2017-03-13

"Analysts are worried that the climb in U.S. production could lure OPEC members to abandon their output-cut pledges. Such a move could wipe out any possibility for the group to extend their production agreement beyond the original six-month period."

[Nasi Goreng]

Gee, you guys are twitchy... and I am to. Sold mine before the divi date. Couta must have sold a bunch in the last week, haven't heard him talk the price down for a while.

[44wishlists]

Meanwhile the oil glut continues and AIR continues to make well north of a million bucks a day. Hoping to pick some more up closer to $2!

At the same time you may want to take into consideration the slipping rate between USD and NZD.

[bull....]

air has still outperformed this yr say compared to dj air index ( which has turned down sharply last 5 days) - so maybe it is playing catch up now. and management continuing to sell never a good look.

[skid]

air has still outperformed this yr say compared to dj air index ( which has turned down sharply last 5 days) - so maybe it is playing catch up now. and management continuing to sell never a good look.

unfortunately its a long term ,very bad habit,...management selling

[babymonster]

i m surprised the sp came back at the end of the day

[bonmaklad]

Good recovery today from 2.23. I'll look to get back in if it comes back to 2.14 before going to 3 :-)

I saw an Agile Coach job on seek today. I am tempted to take the contract just to get an idea of culture inside the building.... is that insider trading lol

Management selling so much is just not cool. It's what caused me to sell back in the 2.435 mark

[RTFQ]

How quickly things change.
At the same time you may want to take into consideration the slipping rate between USD and NZD.

[sb9]

Holders should be happy with divvy money flowing into bank a/c today....just in time to spend on some Guinness to celebrate St Patricks Day :D

[vin]

Holders should be happy with divvy money flowing into bank a/c today....just in time to spend on some Guinness to celebrate St Patricks Day :D

Yewww! Enjoy the weekend!

[winner69]

February operating stats out today or tomorrow?

Probably be pretty good and wil give me more confidence in my forecast of F17 earnings being greater than $600m

Wonder when they will tell us about higher earnings expectations - Chris won't be able to keep saying around $500m for much longer, unless things are actually turning to custard.

[couta1]

February operating stats out today or tomorrow?

Probably be pretty good and wil give me more confidence in my forecast of F17 earnings being greater than $600m

Wonder when they will tell us about higher earnings expectations - Chris won't be able to keep saying around $500m for much longer, unless things are actually turning to custard. Steady as she goes looking at latest stats but nothing to cause the SP to go any higher at this point in time.

[Beagle]

Steady as she goes looking at latest stats but nothing to cause the SP to go any higher at this point in time.

I think that's a fair assessment. Holding for gross dividend yield of 12.2% based on 20 cents per annum fully imputed.

[sb9]

I think that's a fair assessment. Holding for gross dividend yield of 12.2% based on 20 cents per annum fully imputed.

Yes, was dithering a bit recently to hold or sell, have now decided to keep in the bottom drawer for long term :)

[winner69]

RAsK numbers, both short and long haul, continue their decline v same period last year

[couta1]

I think that's a fair assessment. Holding for gross dividend yield of 12.2% based on 20 cents per annum fully imputed. All going to plan, I will have 100% of my portfolio in Air before the next divvy because of that yield, and I'm very partial to Mega divvies. PS-May have to invest in a new divvy bowl before then, or perhaps I'll just use the bathtub.

[couta1]

RAsK numbers, both short and long haul, continue their decline v same period last year To be expected, what will be of more interest will be how next year compares with this year now competition has reached its peak.

[Beagle]

All going to plan, I will have 100% of my portfolio in Air before the next divvy because of that yield, and I'm very partial to Mega divvies. PS-May have to invest in a new divvy bowl before then, or perhaps I'll just use the bathtub.

:lol: :lol: :lol: Cut it out mate, too funny !

[RTFQ]

I think you may be looking at "year to date", Short haul was up for the month.


RAsK numbers, both short and long haul, continue their decline v same period last year

[Jantar]

RAsK numbers, both short and long haul, continue their decline v same period last year
You must be reading a different report to one I am reading.
"Air New Zealand carried 1,268,000 passengers during the month of February, an increase of 2.4%compared to the same period last year. Revenue passenger kilometres (RPKs) were 2.0% higher on acapacity (ASKs) increase of 5.3%. Group load factors were down 2.6 percentage points overall to 81.6%."

Group load factors were down 2.6% in a month that 3.45% fewer days. That makes it an increase compared to the number of days.

[winner69]

This what I looking at

RASK YTD Short haul down 6.6% (worse than YTD January which was down 6.4%)
RASK YTD Long haul down 14.8% (worse than YTD January which was down 14.1%)

To me thats a continuation of declining RASKs v corresponding period last year (and not offset by increased ASKs)

[Arbroath]

You must be reading a different report to one I am reading.
"Air New Zealand carried 1,268,000 passengers during the month of February, an increase of 2.4%compared to the same period last year. Revenue passenger kilometres (RPKs) were 2.0% higher on acapacity (ASKs) increase of 5.3%. Group load factors were down 2.6 percentage points overall to 81.6%."

Group load factors were down 2.6% in a month that 3.45% fewer days. That makes it an increase compared to the number of days.

Jantar - load factor is RPK's divided by ASK's, nothing to do with days in a month. Think of it like capacity utilisation - Air's planes based on kilometres flown were 81.6% full in February.

[Snow Leopard]

RAsK numbers, both short and long haul, continue their decline v same period last year

I agree with you :)


I think you may be looking at "year to date", Short haul was up for the month.

Yes, he was. They do not give RASK for the month, but it was down. :(


You must be reading a different report to one I am reading.
"Air New Zealand carried 1,268,000 passengers during the month of February, an increase of 2.4%compared to the same period last year. Revenue passenger kilometres (RPKs) were 2.0% higher on acapacity (ASKs) increase of 5.3%. Group load factors were down 2.6 percentage points overall to 81.6%."

Group load factors were down 2.6% in a month that 3.45% fewer days. That makes it an increase compared to the number of days.

You are reading the same report, but you are totally misunderstanding it. :(

Best Wishes
Paper Tiger

[Jantar]

......
You are reading the same report, but you are totally misunderstanding it. :(

Best Wishes
Paper Tiger


Jantar - load factor is RPK's divided by ASK's, nothing to do with days in a month. Think of it like capacity utilisation - Air's planes based on kilometres flown were 81.6% full in February.

My apologies, I am in a daze today and you are both right. A factor is a ratio and has no dependence on time.

However,all the time dependant indicators are up on the same month last year.

[Beagle]

LOL for someone who said they weren't going to comment I think you might have tripped over your own paws there Paper Tiger :)

[RTFQ]

Short Haul passenger numbers increased 2.2%. In the Domestic market demand



(RPKs) increased by 5.9%, with capacity (ASKs) increasing by 6.4%, due to



increased services on Auckland - Queenstown and the main trunk routes, as



well as growth on the regional routes resulting from up-gauging to larger



aircraft. Domestic load factor decreased 0.5 percentage points to 83.2%.





Available seat kilometers increased for Feb17 relative to FEB16
Revenue per passenger kilometer increased Feb17 relative to Feb16
Load factor was only down 0.5% Feb17 as opposed to Feb16

I suggest costs are down per ASK's and Cargo is at record highs.

[Beagle]

Yes we'll likely see some further CASK improvement this half as fuel and maintenance hungry 767-300's leave the fleet this month replaced by state of the art dreamliners.
You know you're getting older when you can remember back 20+ years ago when those 767's were considered absolute state of the art and ultra efficient aircraft that apparently bean counters loved because they were so cheap to fly. Where do the years go...

[macduffy]

Where do the years go...

They disappear along with the DC3, the Viscount and the Lockheed Electra. Now there was an aircraft!

:mellow:

[winner69]

LOL for someone who said they weren't going to comment I think you might have tripped over your own paws there Paper Tiger :)

I'm glad he did comment - cause he said I was correct and I got a smilie thing

Made my day ha ha

[winner69]

My apologies, I am in a daze today and you are both right. A factor is a ratio and has no dependence on time.

However,all the time dependant indicators are up on the same month last year.

.....but revenues (money in the bank) are less than same month last year ....and for the year to date

[Snow Leopard]

LOL for someone who said they weren't going to comment I think you might have tripped over your own paws there Paper Tiger :)

It was not me - it must have been written by another Paper Tiger.

[janner]

It was not me - it must have been written by another Paper Tiger.

Maybe you did not pause enough ...

[sb9]

Good recovery today in an otherwise weak market overall...

[Beagle]

Good recovery today in an otherwise weak market overall...

Life in the old bird yet eh. :)

[JeremyALD]

Jetstar getting terrible press over cancelled flight to Auckland meaning people missed out on Adele. Their social media is a mess full of complaints. Bodes well for AIR NZ domestically. They only have one competitor Jetsar which has a pretty dismal reputation.

[couta1]

Jetstar getting terrible press over cancelled flight to Auckland meaning people missed out on Adele. Their social media is a mess full of complaints. Bodes well for AIR NZ domestically. They only have one competitor Jetsar which has a pretty dismal reputation. Jetstar service is abysmal and their backup is basically non existent. They offer a low level of competition for Air at the very most.

[Subway]

Jetstar service is abysmal and their backup is basically non existent. They offer a low level of competition for Air at the very most.

I think it really depends on the type of traveler, someone on business i'd think AirNZ has that one pretty well locked down, especially koru users. Those connecting with international flights i'd think the ease of having a single ticketed connecting flight again AirNZ would come out on top there.

However, AirNZ market share has gone down, with one report putting it at 80% market share down from 84%

http://www.infometrics.co.nz/regional-growth-pushes-domestic-aviation-past-12-million-passengers/

I guess the question is who those travelers are, I used jetstar frequently when I was in NZ as I didn't have checked luggage, I didn't mind if my flight was delayed slightly (no connections) and the price was often significantly cheaper unless AirNZ had a sale. Looking at my fellow travelers they definitely seemed to be more price conscious, and maybe AirNZ doesn't want these travelers, they would be low margin clientele.

I think these are two completely different airlines with different business models, unfair to constantly compare the two.

[iceman]

I think it really depends on the type of traveler, someone on business i'd think AirNZ has that one pretty well locked down, especially koru users. Those connecting with international flights i'd think the ease of having a single ticketed connecting flight again AirNZ would come out on top there.

However, AirNZ market share has gone down, with one report putting it at 80% market share down from 84%

http://www.infometrics.co.nz/regional-growth-pushes-domestic-aviation-past-12-million-passengers/

I guess the question is who those travelers are, I used jetstar frequently when I was in NZ as I didn't have checked luggage, I didn't mind if my flight was delayed slightly (no connections) and the price was often significantly cheaper unless AirNZ had a sale. Looking at my fellow travelers they definitely seemed to be more price conscious, and maybe AirNZ doesn't want these travelers, they would be low margin clientele.

I think these are two completely different airlines with different business models, unfair to constantly compare the two.

I hear that for example here in Nelson we are experiencing a large number in tourists flying in on Jetstar. With the road closed down the east coast many of the so called freedom campers which we are swamped with here, are flying between islands instead of taking the ferries and then picking up a van here (happy THL holder:-) ) and driving on down the West Coast, which is also bursting at the seams with inflow of tourists. The roads are also struggling with the traffic leading to lots of unscheduled road repairs, which has become very frustrating for road users.
I know this is only a recent and a very small part of domestic air travelers but I think the Kaikoura earthquake has certainly made a huge difference on how people in the South Island travel these days. I would suggest many more are flying down here, benefiting both AIR and Jetstar.

[dobby41]

Jetstar service is abysmal and their backup is basically non existent. They offer a low level of competition for Air at the very most.

But no mention of the AIR flight cancelled same day.

[Zaphod]

But no mention of the AIR flight cancelled same day.

Yes, exactly. Jetstar have become somewhat of a punching bag for the general public. AirNZ do have similar issues, although not to scale.

I think people need to remember that Jetstar's business model is predicated on low-cost and consequently, their performance is can be more effected by staff illness, aircraft breakdowns etc. than AirNZ who are running a relatively more modern and larger fleet, and who have much larger volumes of staff available to provide cover.

Perhaps it's human nature to want to pay next to nothing but expect perfect service?

[Carpenterjoe]

Jetstar service is abysmal and their backup is basically non existent. They offer a low level of competition for Air at the very most.

✈Fly Emirates on an A380, then compare it with any Air nz service. Ive also been told fly the new Air China services and compare with Air nz. Then talk about low level service😆. I think jetstar and Airnz are both budget airlines. Except airnz is a patriotic brand. Kiwis have been successfully sucked in with bloody good marketing.📺

I avoid flying airnz, a bus🚌 chch to dunedin will suffice. Cheaper and often takes the same time when flying in from Sydney. Sick of paying the same price from syd to chch as chch to dunedin.

[ace5715]

✈Fly Emirates on an A380, then compare it with any Air nz service. Ive also been told fly the new Air China services and compare with Air nz. Then talk about low level service. I think jetstar and Airnz are both budget airlines. Except airnz is a patriotic brand. Kiwis have been successfully sucked in with bloody good marketing.

I avoid flying airnz, a bus chch to dunedin will suffice. Cheaper and often takes the same time when flying in from Sydney. Sick of paying the same price from syd to chch as chch to dunedin.

I flew the Air China service on a 787 from Beijing to Auckland back in February and it wasn't anything special to write about. In economy class the food, seat and entertainment were all average at best and no where near as good as what Air NZ offers on flights from China. I travel a bit for work mostly to China these days and AirNZ is better than Air China and Southern China by quite a margin in my opinion.

[Carpenterjoe]

I flew the Air China service on a 787 from Beijing back in February and it wasn't anything special to write about. In economy class the food, seat and entertainment were all average at best and no where near as good as what Air NZ offers on flights from China. I travel a bit for work mostly to China these days and AirNZ is better than Air China and Southern China by quite a margin in my opinion.

Good to know, this was a Sydney Christchurch route. Wonder if they alter their standards on different routes.

[Jantar]

Good to know, this was a Sydney Christchurch route. Wonder if they alter their standards on different routes.
They do. Long haul flights are far superior in terms of leg room, food, service etc.

In a couple of weeks I'll be flying AIR to Shanghai then Air Austria to Vienna. Will be interesting to see how they compare.

[Beagle]

Yes, exactly. Jetstar have become somewhat of a punching bag for the general public. AirNZ do have similar issues, although not to scale.

I think people need to remember that Jetstar's business model is predicated on low-cost and consequently, their performance is can be more effected by staff illness, aircraft breakdowns etc. than AirNZ who are running a relatively more modern and larger fleet, and who have much larger volumes of staff available to provide cover.

Perhaps it's human nature to want to pay next to nothing but expect perfect service?

Yes absolutely it is but just like my mother and probably everyone else's mother told them as a child, you get what you pay for and with Jetstar that isn't much.
Anyone who has been very seriously inconvenienced by their old shabby aircraft or insufficient engineering or crew back up will know their approach is simply that they couldn't care less, (how is anyone for example expected to find a hotel in Queenstown at the last minute with their meagre $150 overnight allowance which is a complete joke, assuming they simply didn't keep you waiting at the airport almost indefinitely in the first place).
Its Jetstar's staff attitude that I personally find really offensive, honestly they just don't care and don't even make the slightest pretense about it either. I have concluded that I think a significant proportion of Jetstar's staff have a very strong preference to be flying for a proper airline and are simply starting with Jetstar as a way to get into the industry. Never again even if they are half the price or less of AIR.

[janner]

service .

On this I think Air are well ahead .. Is it possibly because the Cabin Crew are usually more mature ( to put it kindly )...

[winner69]

AIR marketing people salivating today with many of the photos taken on the flight south to see the southern aurora last night

http://www.stuff.co.nz/travel/themes/90798230/stunning-photographs-from-soldout-trip-to-catch-the-southern-lights

Awesome photo and what branding

(I've signed up to go next year if they get one organised)

[Toulouse - Luzern]

Jetstar are a punching bag because they cut far too many corners.

Why I no longer fly Jetstar ...

Eg. On a trip to Brisbane and on to Bali, the Jetstar WLG flight to Brisbane leaving from WLG at 7.30am ish was staffed by a Christchurch Jetstar crew who flew as passengers from CHC to WLG. CHC was foggy. We missed our Brisbane connection to Bali and lost a day of our holiday.

Coming home via Sydney Mrs TL and my luggage was checked in together.

Mrs TL got hers in WLG and went through customs.

After an hour and a half I gave up.

It took another week for my luggage to arrive ...

Air NZ service is very good, Singapore Airlines is excellent ...

[winner69]

Apparently many Adele fans flew into Hamilton and drove through to Auckland because airfares were much cheaper to Hamilton than flying to Auckland

Hope heads roll in AIR HQ for allowing this to happen - not maximising profits at peak demand times

Not good enough - hope they don't take the eye off the ball when the Lions are here

[Baa_Baa]

Apparently many Adele fans flew into Hamilton and drove through to Auckland because airfares were much cheaper to Hamilton than flying to Auckland

Hope heads roll in AIR HQ for allowing this to happen - not maximising profits at peak demand times

Not good enough - hope they don't take the eye off the ball when the Lions are here

Very funny winner, like Air have a questionnaire on their booking system .. "why are you flying to Hamilton?", answer 'to drive to Auckland for Adele' .. "sorry potential customer, your booking is denied". Lol, what a comedian.

Not sure those Hamilton arrivals actually made it to Adele anyway after the crashes delayed travel between Hamilton and Auckland?

[JeremyALD]

AIR really does charge ridiculous prices sometimes. On flights for work from Auckland to Wellington at peak times it's $350 one way or $700 return. That's​ quite simply ridiculous when you can fly to Australia for less, however I guess it's smart business practice if people are willing to pay it.

[Marilyn Munroe]

Apparently many Adele fans flew into Hamilton and drove through to Auckland because airfares were much cheaper to Hamilton than flying to Auckland

Hope heads roll in AIR HQ for allowing this to happen - not maximising profits at peak demand times

Not good enough - hope they don't take the eye off the ball when the Lions are here

I can assure you that there is a computer within Cullen Airlines whose job it is to notice a surge in bookings to Swampy Hollow and increase the price of the remaining tickets. Welcome to the wonderful world of yield management.

This same computer knows that on a weekday morning there will be a flood of civil servants businessmen and travelling salesmen who want to leave the big city to visit the capital city or the provinces do their calls and be back in the big city in time for dinner. Thus the air fares that JeremyALD complains about.

Boop boop de do
Marilyn

[sb9]

That big wall of 400k odd shares sitting at 2.30 just got knocked off.....

[JoeGrogan]

That big wall of 400k odd shares sitting at 2.30 just got knocked off.....

Wow wouldn't have picked that with the way the market is at the moment.

[arc]

That big wall of 400k odd shares sitting at 2.30 just got knocked off.....

Interesting move.... someone is being cautious, and others are following the euphoric market.

[couta1]

Wow wouldn't have picked that with the way the market is at the moment. The big boys are back for a bit of a play.

[Beagle]

The big boys are back for a bit of a play.

Some Australian investors appear to think AIR's SP at N.Z. $2.30 is relatively good value compared to Qantas at nearly $A4.00 and its hard to disagree, perhaps explaining why it got a kick up today.
According to average analyst estimates on 4 traders QAN currently trades on a FY17 PE of 7.93 v AIR of only 7.02.
Curiously both trade on a forecast PE for FY18 of 7.5 so according to analysts, (if you believe their forecasts for FY18) the relativity of the two share prices is about right.

[Marilyn Munroe]

Long term viewers of this thread will be aware I have made repeated calls for John Key to sell the governments share of Cullen Airlines.

Quelle Surprise! The OECD has published a reform agenda paper recommending this;

http://www.oecd.org/eco/growth/Going-for-Growth-New-Zealand-2017.pdf

Will the Double Dipper from Dipton follow the advice of policy wonks from Paris?

Boop boop de do
Marilyn

PS Maybe when the Sheik of Etihad, His Excellency Mohammed Al Mazouri learns of this recommendation he will be winging his way to Aotearoa bearing Bill gifts of gold frankincense and A320-NEO options.

[777]

Seems like they are as misguided as you.

[sb9]

Another strong finish, twice in two days....:)

[Beagle]

Another strong finish, twice in two days....:)

Very, very tempting to work out my profit for the last couple of days of this, SUM, A2, HBL and the rest of my portfolio...but that could be hazardous to my health, excess scoffing and drinking is sure to ensue, see dog tail wagging video clip in SUM thread, super funny !

[Baa_Baa]

Long term viewers of this thread will be aware I have made repeated calls for John Key to sell the governments share of Cullen Airlines.

Quelle Surprise! The OECD has published a reform agenda paper recommending this;

http://www.oecd.org/eco/growth/Going-for-Growth-New-Zealand-2017.pdf

Will the Double Dipper from Dipton follow the advice of policy wonks from Paris?

Boop boop de do
Marilyn

PS Maybe when the Sheik of Etihad, His Excellency Mohammed Al Mazouri learns of this recommendation he will be winging his way to Aotearoa bearing Bill gifts of gold frankincense and A320-NEO options.

Interesting read, thanks for posting. Who knows whether the Govt will act on the OECD recommendations, but it definitely recommends to get out of AIR and the government owned Gentailers (and that process started some time ago).

What would happen to the share price of AIR if the government put their lot up for sale? I suppose it depends on the price?

[tim23]

Went up pretty rapidly last sell down about $1.60 from memory

[peat]

Went up pretty rapidly last sell down about $1.60 from memory
yehitseemedareasonablepriceatthetime

[Leftfield]

What would happen to the share price of AIR if the government put their lot up for sale? I suppose it depends on the price?

Very hypothetical however much could also depend on who buys the Govt's shares too.

[winner69]

Grumpy passengers - **** happens and they need to accept this

Anyway AIR essentially the only choice ......that's good

http://www.stuff.co.nz/travel/travel-troubles/90989093/elderly-women-and-an-injured-man-left-hungry-and-confused-amid-travel-chaos

[dobby41]

Grumpy passengers - **** happens and they need to accept this

Anyway AIR essentially the only choice ......that's good

http://www.stuff.co.nz/travel/travel-troubles/90989093/elderly-women-and-an-injured-man-left-hungry-and-confused-amid-travel-chaos

I bet they didn't pay a lot for the ticket either.
At least AIRNZ has put extra planes on today to get AKL--WLG - a 777 even.

[winner69]

I bet they didn't pay a lot for the ticket either.
At least AIRNZ has put extra planes on today to get AKL--WLG - a 777 even.

Yep a 777 - no expensive runway extension needed

The Singapore 777 aborted 2 attempts to land in the fog yesterday (everything else had given up well before that). Got down to 300 feet before aborting. Must have been exciting eh

[macduffy]

Yep a 777 - no expensive runway extension needed

The Singapore 777 aborted 2 attempts to land in the fog yesterday (everything else had given up well before that). Got down to 300 feet before aborting. Must have been exciting eh

Are you sure that was a 777, winner? I thought SIA was flying late model 737's on that Sing/Canberra/Wgtn route?

[theace]

Are you sure that was a 777, winner? I thought SIA was flying late model 737's on that Sing/Canberra/Wgtn route?

http://www.singaporeair.com/en_UK/nz/plan-travel/local-promotions/flights-from-wellington/

777 it is

[winner69]

Are you sure that was a 777, winner? I thought SIA was flying late model 737's on that Sing/Canberra/Wgtn route?

My trusty flightradar app says Boeing 777-200 (twin-jet)*(B772)

[macduffy]

http://www.singaporeair.com/en_UK/nz/plan-travel/local-promotions/flights-from-wellington/

777 it is

Thanks, ace. I might try it sometime!

:)

[Zaphod]

Yep a 777 - no expensive runway extension needed

Yeah, for short haul it's possible, however for longer sectors they face restricted MTOW which make the use of the aircraft uneconomic.

[sb9]

Very, very tempting to work out my profit for the last couple of days of this, SUM, A2, HBL and the rest of my portfolio...but that could be hazardous to my health, excess scoffing and drinking is sure to ensue, see dog tail wagging video clip in SUM thread, super funny !

Saw that Roger, very funny lol...

Back to AIR looking at today's trade pattern on the back of last two trading days trend, am beginning to think is there something cooking in the background. Someone seem to be soaking up all volume on offer..

[RTFQ]

Any ideas as to where this rally will top out?

[allfromacell]

Maybe a few people are in the know of a soon to be announced guidance upgrade.

[Beagle]

Any ideas as to where this rally will top out?

From 4 Traders, current year PE 7.22, FY18 PE 7.72. http://www.4-traders.com/AIR-NEW-ZEALAND-LIMITED-6491407/financials/ Long run 10 year average PE for AIR is 11.
Management seemed confident on last months months conference call that yields looking forward looked set to improve.
Oil is down a bit since that conference call in late February.

QAN currently trading at A$4.00, current year PE 8.12, FY18 PE 7.65
http://www.4-traders.com/QANTAS-AIRWAYS-LIMITED-24735912/consensus/

[Joshuatree]

What if the Govt are selling their shareholding?. Any negatives there?

[Beagle]

What if the Govt are selling their shareholding?. Any negatives there?

LOL You've been reading too many of Marilyn Munroe's posts Joshuatree.

As you know already the Government's majority controlling interest protects Kiwi's national interests and provides a reliable source of new capital if for some unknown reason the airline needed it in the future. Something many people aren't aware of is that Government approval is required before any shareholder can own more than 10% of the airline.

This is purely speculative but in my opinion if for some reason the Govt wanted to remove those safeguards, (not that I think this is a good idea and is counter intuitive to protecting our national interest) you can well imagine a carrier like Singapore Airlines being able to borrow cheaply on the international debt market at 2-3% acquiring the airline at a significant premium to the current market price and based on a PE of say 10 giving an earnings yield of 10% this would be strongly EPS accretive for them from the get-go.

Disclaimer: I am not aware of any speculation in business or Govt circles or in any media channell which might suggest this is even a vague possibility.
Only our dear friend Marilyn Munroe's posts suggest this is the best strategy for the Govt.

[Joshuatree]

Thanks Roger. heres a bit of history re the Govt investment if anyones int.
I guess they will want to sell down at some point.Hey flying within NZ might become more reasonable if they did ehhh:D
The Crown's Investment in Air New Zealand (Part 1) (16 May 2016) (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt1)
The Crown's Investment in Air New Zealand (Part 2) (18 May 2016) (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt2)
The Crown's Investment in Air New Zealand (Part 3) (20 May 2016) (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt3)

[Baa_Baa]

LOL You've been reading too many of Marilyn Munroe's posts Joshuatree.

As you know already the Government's majority controlling interest protects Kiwi's national interests and provides a reliable source of new capital if for some unknown reason the airline needed it in the future. Something many people aren't aware of is that Government approval is required before any shareholder can own more than 10% of the airline.

This is purely speculative but in my opinion if for some reason the Govt wanted to remove those safeguards, (not that I think this is a good idea and is counter intuitive to protecting our national interest) you can well imagine a carrier like Singapore Airlines being able to borrow cheaply on the international debt market at 2-3% acquiring the airline at a significant premium to the current market price and based on a PE of say 10 giving an earnings yield of 10% this would be strongly EPS accretive for them from the get-go.

Disclaimer: I am not aware of any speculation in business or Govt circles or in any media channell which might suggest this is even a vague possibility.
Only our dear friend Marilyn Munroe's posts suggest this is the best strategy for the Govt.

The OECD report specifically recommends that the government sell AIR and gentailers. Why would they say that?

[couta1]

The OECD report specifically recommends that the government sell AIR and gentailers. Why would they say that? No matter why, it ain't going to happen in an election year and not in any Labour Govt's term, should they gain power.

[Joshuatree]

You lucky bugger you've got a/the Tardus and have been into the future.Hey who's the winner at Flemington All comers thoroughbred stakes on Feb 8th 2018 on a fast track:)

Those AIR $ could come in handy to cover the lower tax rate National are parroting on about ehhh.

[Baa_Baa]

No matter why, it ain't going to happen in an election year and not in any Labour Govt's term, should they gain power.

I'm not sure about yours or even if you have one, but in my trading diary (system) I have a tab called 'risks' for every share I own or is on my watch list.

Risks are things that 'might happen', not things that have happened, they can be upside or downside risks.

So making a note of the 'OECD recommendation for the government to sell AIR' is a new risk, whether upside or downside, is just part of my system.

I thought I would try and ask what others here think about why the OECD would say that.

Discounting the risk out of hand by saying "no matter why" suggests a cavalier attitude towards identifying, monitoring and responding to investment risks.

The notion that a Labour government would not entertain any asset sales is slightly helpful, though I would rate that as very low likelihood as it is attached to whether Labour are the government.

In the event that National continue as government, the notion that they might sell AIR based solely on an OECD report in an election year seems highly unlikely, so conversely your suggestion has some merit imo as well.

Taking that a step further, if the National government remain in power past Sept 2017, with their predilection for selling national assets, it seems warranted to maintain at least a moderate risk of them acting on the OECD recommendation (even if not primarily because the OECD recommended it).

My question though is about consequence, not likelihood. It seems to me to be a fair and reasonable question.

If this is all a bit too much for some, maybe they could refrain from flippant off-the-cuff answers. That might give some breathing room for those who might be tempted to post their thoughts, but don't, because this thread is dominated by the fan club who refuse to engage in any existential discussion, beyond financials and moving averages.

The question still stands. "The OECD report specifically recommends that the government sell AIR and gentailers. Why would they say that?"

[Beagle]

Thanks Roger. heres a bit of history re the Govt investment if anyones int.
I guess they will want to sell down at some point.Hey flying within NZ might become more reasonable if they did ehhh:D
The Crown's Investment in Air New Zealand (Part 1) (16 May 2016) (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt1)
The Crown's Investment in Air New Zealand (Part 2) (18 May 2016) (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt2)
The Crown's Investment in Air New Zealand (Part 3) (20 May 2016) (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt3)

Thanks for the links Joshuatree. Treasury's analysis focus's solely on direct financial returns from dividends and capital return.
It does not take into account indirect returns, taxation and other national interest issues.
The whole issue of international transfer pricing is "red hot" at present. All sorts of international companies doing large amounts of business in N.Z. and paying no or negligible tax here.
I am certain that if Marlyn had her way and AIr was sold to one of the sand state airlines the following would ensue
1. Sand state INC would pay very little if any tax in N.Z. This factor alone could have deprived the N.Z. Govt of over $200m in tax revenue just in the FY16 year
2. Sand State Inc would predominantly use their nationals to staff the airline depriving the N.Z. Govt of a significant portion of the annual PAYE they earn on AIR staff wages of circa $1.1 billion per annum
3. Sand State Inc would charge whatever they like for internal airfares within N.Z. due to their near market dominance and Jetstar would simply play along and extricate significantly more money from the N.Z. economy too.
3b Kiwi's would be effectively held hostage and pay hundreds of million of dollars, potentially as much as $1 billion a year in increased domestic airfares

Treasuries analysis does not look at the bigger picture as their brief is to strictly focus on quantifiable financial returns without considering broader social and national interest issues.

Baa Baa, I suggest you ask the report's author(s). From a conceptual point of view they are probably hypothesizing that Government normally doesn't have a good track record in commercial enterprise.
I think the mixed ownership model is working just fine. OECD recommend all sorts of things from time to time, doesn't mean there's a political will to follow along like a meek sheep to the slaughter.

An awful lot of Governments around the world either own their national airline outright or own a significant stake in it to protect the national interest. I think if one of the sand state airlines owned AIR Kiwi's would find out the real meaning of truly usurious airfares. We can rely on the Commerce Commission to ensure in those circumstances that domestic airfares are fair and reasonable...yeah right, someone please hand me a Tui !

Perhaps you'd be so kind as to post a link to their report which might assist people to see their conceptual point of view.

[peat]

The question still stands. "The OECD report specifically recommends that the government sell AIR and gentailers. Why would they say that?"

Because that is the default position of NGO Think Tanks as a result of the neo-liberal perspectives developed since the Thatcherism/Reaganism/ era that wishes to shrink government on the basis the market knows best.
I'm not judging just sayin.

[Baa_Baa]

Hey Roger, no problem, here's what Marilyn Monroe kindly posted, including the link to the OECD report.


Long term viewers of this thread will be aware I have made repeated calls for John Key to sell the governments share of Cullen Airlines.

Quelle Surprise! The OECD has published a reform agenda paper recommending this;

http://www.oecd.org/eco/growth/Going-for-Growth-New-Zealand-2017.pdf

Will the Double Dipper from Dipton follow the advice of policy wonks from Paris?

Boop boop de do
Marilyn

PS Maybe when the Sheik of Etihad, His Excellency Mohammed Al Mazouri learns of this recommendation he will be winging his way to Aotearoa bearing Bill gifts of gold frankincense and A320-NEO options.

[Baa_Baa]

Baa Baa, I suggest you ask the report's author(s). From a conceptual point of view they are probably hypothesizing that Government normally doesn't have a good track record in commercial enterprise.
I think the mixed ownership model is working just fine. OECD recommend all sorts of things from time to time, doesn't mean there's a political will to follow along like a meek sheep to the slaughter.

Lol, Roger, provocative, but I can move past the the sheep jokes, though definitely unhelpful and certainly an unrealistic suggestion to 'ask the reports authors'.

Just read the report, maybe you have an answer to my question. OECD try to justify why they make it. Hopefully we can get to some reasoned discussion.

[Beagle]

Because that is the default position of NGO Think Tanks as a result of the neo-liberal perspectives developed since the Thatcherism/Reaganism/ era that wishes to shrink government on the basis the market knows best.
I'm not judging just sayin.


Lol, Roger, provocative, but I can move past the the sheep jokes, though definitely unhelpful and certainly an unrealistic suggestion to 'ask the reports authors'.

Just read the report, maybe you have an answer to my question. OECD try to justify why they make it. Hopefully we can get to some reasoned discussion.

I have debated this issue at great length with Marilyn before and taken the time to clearly and thoroughly articulate my viewpoint which I succinctly summarized for you in post #10674 above.

For my money Peat has summed it up very succinctly and perfectly.

[winner69]

Because that is the default position of NGO Think Tanks as a result of the neo-liberal perspectives developed since the Thatcherism/Reaganism/ era that wishes to shrink government on the basis the market knows best.
I'm not judging just sayin.

Peat, right on.......and with the ulterior motive to line the pockets of a selected few.

They still want NZ to become more indebted to the world - and then push the issue harder.

Government will own ~50% if AIR for a few more years yet but maybe in four to five years time things will change.

[Joshuatree]

Thanks Roger for your opinions. One could debate the 1 to 3 b points you brought up. I think we are being ripped off already re airfares in NZ and doubt it would get much worse.But my lips are sealed as currently I'm a shareholder which makes me a hypocrite to be sure. Am i right that the govt stepped in to save AIR and didn't own any holdings previously. Im not in favour of govt owning companies like this ; better to leave them to govern thats their forte.

[Beagle]

Thanks Roger for your opinions. One could debate the 1 to 3 b points you brought up. I think we are being ripped off already re airfares in NZ and doubt it would get much worse.But my lips are sealed as currently I'm a shareholder which makes me a hypocrite to be sure. Am i right that the govt stepped in to save AIR and didn't own any holdings previously. Im not in favour of govt owning companies like this ; better to leave them to govern thats their forte.

No problem, I'm never short of an opinion LOL. Yes absolutely Joshuatree you're quite right, after the ill fated Ansett investment in 2001 and the terrible events of Sept 11 of that same year airline bookings simply fell off the edge of a cliff right at a time when AIR was stretched by their (if I remember correctly $450m investment). Govt did the right thing by all Kiwi's supporting AIR during its time of need in my opinion. Seems the current team learned from that experience and extricated themselves from Virgin without too much damage, well done to Chris Luxon for having the courage of his own convictions in that regard.

No question whatsoever AIR uses very sophisticated yield management software to try and extract the maximum yield from each and every flight, they're in business to make money not provide a social service and I don't have any problem with that in the light of the study they undertook. In 2014, sorry not sure if it might have been 2015 when the whole issue of domestic airfares was a political hot potato, Chris Luxon instructed the company to undertake a broad international survey comparison of other countries domestic airfares with similar sort haul characteristics and AIR assert that on an international comparative basis our domestic airfares are on average amongst some of the cheapest in the world. Cold comfort to those booking an airfare at the last minute during peak business hours but for an example as a purely random tiny piece of anecdotal evidence I got flights Auckland to Wellington on 27 April for SUM's annual meeting during business hours, down $89, (had enough airpoints for that one for free) and back, admit this is the last flight of the day at 7.45 p.m. so not truly business hours was $149 which hurt a little bit but still very strongly preferred over Jetstar at $99 for the same flight leaving 15 minutes later coming home. This morning on www.grabaseat.co.nz they had a bunch of airfares around the country at $1, $19 and $29 on sale for those early birds who are quick enough to catch the worm :) and $848 return to America ! I strongly believe if an overseas owned airline dominated the N.Z. domestic market they'd extricate vast amounts of Kiwi's wealth offshore.

Just imagine as a good analogy, if just one of the major fuel companies dominated 80% of the local fuel market and there was only Gull left to provide some limited so called competition, do you honestly believe the price of fuel would be the same as it is now ?

[Biscuit]

... the govt stepped in to save AIR and didn't own any holdings previously. Im not in favour of govt owning companies like this ....

If you consider that the NZ Govt stepped in to support a company it didn't have any ownership in it demonstrates the strategic importance of the company and the wisdom of the Govt in having some ongoing ownership.

[winner69]

Anybody grab this daily special ...before being taken down

http://www.stuff.co.nz/travel/91138845/air-new-zealand-admits-airfare-mistake-with-flights-to-honolulu

[Joshuatree]

If you consider that the NZ Govt stepped in to support a company it didn't have any ownership in it demonstrates the strategic importance of the company and the wisdom of the Govt in having some ongoing ownership.

I agree then but not sure about now when its making a motza.NZ railways well yes the govt were forced to buy it back after fay ,rich white made a killing and then was it Toll flogged it back to the Govt ; it is a strategic asset at this point; although thats debatable too. And has it ever made a profit?

Off on a tangent;I see the gisborne wairoa line being turned into a twin cycle track
Rail trail gets the nod | The Gisborne Herald (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwiL2rbgjofTAhWLxbwKHTP0BtgQFgggMAE&url=http%3A%2F%2Fgisborneherald.co.nz%2Flocalnews% 2F2725794-135%2Frail-trail-gets-the-nod&usg=AFQjCNH01BvycGsqS_204jHV6WH7EUjNQg)

[RTFQ]

"I agree then but not sure about now when its making a motza"

Yea right! As I have said before most good businesses aim for a 15% return on capital investment. AIR would be lucky to make 7% on capital.

AIR is one of our national flag wavers and for that reason alone I doubt the Govt would allow the possibility of outside control. Look at the huge success Brieleys made with it.

[Beagle]

http://www.msn.com/en-nz/news/national/air-nz-boeing-767s-take-their-last-flight/ar-BBz4VPQ?ocid=spartandhp

http://www.msn.com/en-nz/news/world/airport-mix-up-sees-winter-olympics-delegation-land-in-pyongyang-after-pilot-files-wrong-flight-plan/ar-BBzcDp5?li=AAaeXZz&ocid=spartandhp
You'd hope most airlines have better GPS systems that this pilot was using :eek2:

[Marilyn Munroe]

Have you heard of the Greenspan Put? This refers to an implicit understanding that should things go pear shaped for Wall Street Banks US Federal Reserve Chairman Alan Greenspan would flood the financial system with so much money these banks would be able to survive. Many commentators blame the "Alan's got our back" meme for banks trading recklessly leading to the Global Financial crisis.

Many of you will be aware that I have urged the Government sell its share in Air NZ. The colourful language I used may have lead some of you to conclude I was a loud mouthed troll. Maybe I am, but there is some serious thinking going on behind the noise.

Why do I want the Government to sell? Because the airline operates under the protection of a Cullen Put. Some believe the government has an obligation to shovel cash into the airline to keep it flying if we have an Ansett MK II.

Why should the government be called on for this financial support when it has more pressing calls on its cash for things such as mental health treatment debt repayment and adequate policing. Should the airline go down does it really matter? International routes are already well served by other airlines and I am sure there would be others willing to step into the void left by the airline domestically.

By selling the government would gain a descent wad of cash and free itself from the contingent liability of the Cullen Put.

Boop boop de do
Marilyn

[couta1]

I just awoke from this terrible nightmare that Air had been sold and Jetstar had taken over our domstic network in conjunction with Malaysia airlines.

[Subway]

I just awoke from this terrible nightmare that Air had been sold and Jetstar had taken over our domstic network in conjunction with Malaysia airlines.

Haha Malaysia Airlines really aren't that bad!

Marilyn Munroe: I think having a national airline is a priority for any government, you might disagree with that, but its not a great look for a country if their main airline fails

[dobby41]

Marilyn Munroe: I think having a national airline is a priority for any government, you might disagree with that, but its not a great look for a country if their main airline fails

Some time back the airline was wholly privately owned - no govt money.
Then they hit bad air and nearly failed - so the govt bailed them out.
Now that they are back flying high why does the govt still need to be in there? Their job is done - sell and move on.

[777]

Some time back the airline was wholly privately owned - no govt money.
Then they hit bad air and nearly failed - so the govt bailed them out.
Now that they are back flying high why does the govt still need to be in there? Their job is done - sell and move on.


Replace "bailed them out" with" took a large stake" in an airline that financially strapped due to a bad investment (Ansett) but was operationally very sound. History has proved it was a great investment.

[Baa_Baa]

Replace "bailed them out" with" took a large stake" in an airline that financially strapped due to a bad investment (Ansett) but was operationally very sound. History has proved it was a great investment.

Air would have failed without the government investment, that's a bailout in any language. I'm with the sellers, just don't think it's the best use of taxpayer capital anymore, turned into a cynical money spinner.

[Marilyn Munroe]

Replace "bailed them out" with" took a large stake" in an airline that financially strapped due to a bad investment (Ansett) but was operationally very sound. History has proved it was a great investment.

Yes it has turned into a good investment for the government and yes current management is top-notch.

But the government is still exposed to risk in an industry which has a mixed record financially.

If Ansett MK II happened how would you justify the cost to someone who needs a hip replacement because of pain but can't get one because the governments cash has been diverted into keeping the airline flying?

Boop boop de do
Marilyn

[skid]

Haha Malaysia Airlines really aren't that bad!

Marilyn Munroe: I think having a national airline is a priority for any government, you might disagree with that, but its not a great look for a country if their main airline fails

Malaysia Air to Malaysia was actually a better fight than AIR to Viet Nam,,(for me at least) cheaper too

[dobby41]

Yes it has turned into a good investment for the government and yes current management is top-notch.

But the government is still exposed to risk in an industry which has a mixed record financially.

If Ansett MK II happened how would you justify the cost to someone who needs a hip replacement because of pain but can't get one because the governments cash has been diverted into keeping the airline flying?

Boop boop de do
Marilyn

I agree - as I said, they have done the job they came to do (get the airline running again), time to move on.

[mondograss]

It's not as simple a trade-off. At the time of the bail out, the govt concerned was running surpluses and continued to do so for many years, while at the same time spending substantial amounts on things like hip operations, debt reduction etc. Now if the same situation occurred today, you could argue there would be a trade-off, but you'd have to question whether the current govt would actually spend the money it might invest in bailing out Air NZ on the health sector or any other part of the public service that's currently struggling. They can make the decision to spend that money on public services now, but they haven't so why equate the two?

As for whether it was a good investment or not, the following might be interesting to some:
http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt1
http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt2
http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt3

[mondograss]

I agree - as I said, they have done the job they came to do (get the airline running again), time to move on.

Maybe, but since they've already effectively recovered their initial investment, they're basically being free carried from here on in. Why shouldn't the govt earn dividends from investments if those investments prove sound (and they can back them up with govt policy to enhance them i.e. tourism programs).

[couta1]

Maybe, but since they've already effectively recovered their initial investment, they're basically being free carried from here on in. Why shouldn't the govt earn dividends from investments if those investments prove sound (and they can back them up with govt policy to enhance them i.e. tourism programs). Well said, and the Govt have made over 3 times what they put in bail Air out, this company is now a cash cow for them and provides valuable money for the benefit of all taxpayers.

[Joshuatree]

Thanks Roger. heres a bit of history re the Govt investment if anyones int.
I guess they will want to sell down at some point.Hey flying within NZ might become more reasonable if they did ehhh:D
The Crown's Investment in Air New Zealand (Part 1) (16 May 2016) (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt1)
The Crown's Investment in Air New Zealand (Part 2) (18 May 2016) (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt2)
The Crown's Investment in Air New Zealand (Part 3) (20 May 2016) (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt3)

8.4% return per annum

"Ignoring the time value of money, the Crown invested $1,042 million in Air New Zealand, has received $1,234 million of cash, and currently holds an investment in the company worth $1,341 million.
That might sound like a significant return, but it was over a fourteen year period. To put that into perspective, if you invested $1,000 in a bank term deposit that paid (say) 5% interest (after tax), and reinvested all of the interest payments, then after fourteen years you would have almost $2,000 in the bank.
The attached spreadsheet shows the details of the IRR calculation which, taking account of the time value of money, tells us the Crown's return on its investment in Air New Zealand was 8.4% a year"

[couta1]

The 8.4% doesn't take into account the XOS divvy last year.

[777]

8.4% return per annum

"Ignoring the time value of money, the Crown invested $1,042 million in Air New Zealand, has received $1,234 million of cash, and currently holds an investment in the company worth $1,341 million.
That might sound like a significant return, but it was over a fourteen year period. To put that into perspective, if you invested $1,000 in a bank term deposit that paid (say) 5% interest (after tax), and reinvested all of the interest payments, then after fourteen years you would have almost $2,000 in the bank.


The attached spreadsheet shows the details of the IRR calculation which, taking account of the time value of money, tells us the Crown's return on its investment in Air New Zealand was 8.4% a year"

You should have another look at your example. You can't ignore the dividend but include the interest to justify the result you want.

[Joshuatree]

Thanks guys and not trying to justify anything. How much difference does that make over 14 years?

[dobby41]

Well said, and the Govt have made over 3 times what they put in bail Air out, this company is now a cash cow for them and provides valuable money for the benefit of all taxpayers.

Maybe they should invest in other things also then.
If they played the market enough we wouldn't need taxes.
Where do you draw the line?

[couta1]

Maybe they should invest in other things also then.
If they played the market enough we wouldn't need taxes.
Where do you draw the line? They have currently assigned ACC to play the market and they do it with quite a lot of success. How many companies on the NZX has ACC not taken a stake in at one time or another.

[dobby41]

They have currently assigned ACC to play the market and they do it with quite a lot of success. How many companies on the NZX has ACC not taken a stake in at one time or another.

I'd be fine with ACC or the Cullen fund holding AIR.
Not the same as the Govt itself - different mandate.

[Joshuatree]

Heres the article i extracted from. hard to criticise it.

The Crown's Investment in Air New ZealandPublished 16 May 2016
Part 1 of 3 of a Treasury Staff Insights: Rangitaki article by Juston Anderson
On 18 January 2002 the New Zealand Government invested $892 million in Air New Zealand, giving the Crown an 82% ownership stake in the company. A further $149 million was invested in Air New Zealand in a rights issue in December 2004, taking the total invested by the Crown to $1,042 million.
So what financial returns has the Crown received for this investment?Using an internal rate of return (IRR) calculation, I estimate that the Crown has received a return of 8.4% per year[1] (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt1#note1) from its shareholding in Air New Zealand, as at 9 May 2016.
Below, I explain how I arrived at that figure.
Two subsequent blog posts will look at some implications of this analysis:


how movements in Air New Zealand's share price affect the IRR calculation
separating the IRR into realised and unrealised returns, and why this matters
the impact on the IRR of the Crown's sale of some of its shares in Air New Zealand in November 2013

Is 8.4% a "good" return?An internal rate of return can be used to compare two or more investments to each other; it doesn't tell you whether an investment was "good". And "good" is not really a term that an investment advisor would use, as it is a value judgement.
You could argue that 8.4% is greater than the Crown's cost of borrowing over the period from 2002 to today, and on that basis the investment was "good". This would not be a sound argument, for a number of reasons - for example, it ignores risk.
A better benchmark than the cost of borrowing would be to consider market estimates of Air New Zealand's cost of equity. This is the return that market analysts think that shareholders in a company would need to receive, to compensate them for the risks of investing in that company. A few years ago, market estimates of the cost of equity for Air New Zealand were between 12% and 16%, somewhat higher than the calculated IRR.
But of course the Crown is not a market investor, and the Crown's motivations for investing in Air New Zealand were not purely financial. The Crown had other reasons for investing[2] (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt1#note2). And the Crown did not invest on the expectation that it would sell the shares later and make a profit, as a private investor buying shares would.
Calculating the internal rate of returnTo work out an internal rate of return on an investment, you need to know four things:


how much was initially invested
any cash returns you have received from the investment
the current market value of the investment, and
the dates when all of the above happened.

Returns from Air New ZealandSince January 2002, the Crown has received around $869 million[3] (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt1#note3) in dividends from Air New Zealand. The dividends are shown in the graph below.
Chart 1: Dividends to the Crown from Air New Zealandhttp://www.treasury.govt.nz/publications/research-policy/staff-insights/staff-insight-anderson-anz-pt1-01.pngSource: Own calculationsThe blue bars are ordinary dividends, while the red bars show special dividends. The green bars are dividends paid on Air New Zealand's redeemable preference shares, which were issued to the Crown as part of its investment in Air New Zealand in 2002. They converted to ordinary shares in January 2005.
In November 2013, the Crown reduced its shareholding in Air New Zealand by selling around 221 million shares (reducing the Crown's shareholding in the company to around 53%) for which it received $365 million of cash.
So the total cash that the Crown has received is $1,234 million[4] (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt1#note4).
The market value of the investmentThe Crown's shareholding in Air New Zealand had a theoretical[5] (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt1#note5) value as at 9 May 2016 of around $1,341 million[6] (http://www.treasury.govt.nz/publications/research-policy/staff-insights/crown-investment-anz-pt1#note6).
The dates when this happenedWe need to know when all of this happened so that we can take account of the time value of money. This is the principle that a dollar today is worth more than a dollar at some point in the future. You could invest that dollar now, and with the income from the investment, you would (hopefully) have more than a dollar in the future. For the same reason, a dollar that you received in the past is also worth more than a dollar received today.
Ignoring the time value of money, the Crown invested $1,042 million in Air New Zealand, has received $1,234 million of cash, and currently holds an investment in the company worth $1,341 million.
That might sound like a significant return, but it was over a fourteen year period. To put that into perspective, if you invested $1,000 in a bank term deposit that paid (say) 5% interest (after tax), and reinvested all of the interest payments, then after fourteen years you would have almost $2,000 in the bank.
The attached spreadsheet shows the details of the IRR calculation which, taking account of the time value of money, tells us the Crown's return on its investment in Air New Zealand was 8.4% a year.

[couta1]

I'd be fine with ACC or the Cullen fund holding AIR.
Not the same as the Govt itself - different mandate. Different mandate but the same end result, more money available for average kiwis to obtain essential services.

[dobby41]

Different mandate but the same end result, more money available for average kiwis to obtain essential services.

Well yes and no.
If the ACC are investing then the return goes to the ACC - not hip replacements.
If the Cullen fund does it then the returns will be used some time in the future for people retirement.
It could be said that it means the govt then has money available for hip operations since they don't have to supply the money to ACC etc themselves.

[Beagle]

Thanks for the links Joshuatree. Treasury's analysis focus's solely on direct financial returns from dividends and capital return.
It does not take into account indirect returns, taxation and other national interest issues.
The whole issue of international transfer pricing is "red hot" at present. All sorts of international companies doing large amounts of business in N.Z. and paying no or negligible tax here.
I am certain that if Marlyn had her way and AIr was sold to one of the sand state airlines the following would ensue
1. Sand state INC would pay very little if any tax in N.Z. This factor alone could have deprived the N.Z. Govt of over $200m in tax revenue just in the FY16 year
2. Sand State Inc would predominantly use their nationals to staff the airline depriving the N.Z. Govt of a significant portion of the annual PAYE they earn on AIR staff wages of circa $1.1 billion per annum
3. Sand State Inc would charge whatever they like for internal airfares within N.Z. due to their near market dominance and Jetstar would simply play along and extricate significantly more money from the N.Z. economy too.
3b Kiwi's would be effectively held hostage and pay hundreds of million of dollars, potentially as much as $1 billion a year in increased domestic airfares

Treasuries analysis does not look at the bigger picture as their brief is to strictly focus on quantifiable financial returns without considering broader social and national interest issues.

Baa Baa, I suggest you ask the report's author(s). From a conceptual point of view they are probably hypothesizing that Government normally doesn't have a good track record in commercial enterprise.
I think the mixed ownership model is working just fine. OECD recommend all sorts of things from time to time, doesn't mean there's a political will to follow along like a meek sheep to the slaughter.

An awful lot of Governments around the world either own their national airline outright or own a significant stake in it to protect the national interest. I think if one of the sand state airlines owned AIR Kiwi's would find out the real meaning of truly usurious airfares. We can rely on the Commerce Commission to ensure in those circumstances that domestic airfares are fair and reasonable...yeah right, someone please hand me a Tui !

Perhaps you'd be so kind as to post a link to their report which might assist people to see their conceptual point of view.

Seeing as its repeat day, where people seem to be litigating their perspective again for some reason...I have no problem whatsoever with Treasury's strict financial return on investment calculations but there are serious dividends that the government will miss out on in the share of PAYE, approx. $300m every year, income tax and social cost to Kiwi's as another airline would likely price gouge hapless Kiwi's.
The Government has received BILLIONS of dollars of tax revenue and PAYE revenue from AIR over the period of Treasury's analysis.
Our dear fiend Marilyn assures us the free market knows best and another airline would step in to provide the necessary competition to ensure domestic airfares were reasonable, yeah right, time for a Tui.

The put option Marilyn refers too is a necessary evil to ensure stability and reliability of transportation within the N.Z. economy which the N.Z. Govt also benefits from.

[Biscuit]

Seeing as its repeat day, where people seem to be litigating their perspective again for some reason...I have no problem whatsoever with Treasury's strict financial return on investment calculations but there are serious dividends that the government will miss out on in the share of PAYE, approx. $300m every year, income tax and social cost to Kiwi's as another airline would likely price gouge hapless Kiwi's.
The Government has received BILLIONS of dollars of tax revenue and PAYE revenue from AIR over the period of Treasury's analysis.
Our dear fiend Marilyn assures us the free market knows best and another airline would step in to provide the necessary competition to ensure domestic airfares were reasonable, yeah right, time for a Tui.

The put option Marilyn refers too is a necessary evil to ensure stability and reliability of transportation within the N.Z. economy which the N.Z. Govt also benefits from.

Agree, also the Govt has shown that it likely wears the risk anyway - when push comes to shove it will not let AIR fail - whether it owns the company or not. If you wear the risk, you should prudently have some control.

[winner69]

Hows the share price going today

[Xerof]

what are flying conditions like at your place?

[winner69]

what are flying conditions like at your place?

AIRplanes all over the place

March operating stats should be pretty good

[Joshuatree]

Stealing from its own citizens. The Govt is ripping us kiwis off (including this hypocrite:) with esp domestic fares ; unless you are on a main route and can pick up the cheap fares on their time frames which seldom fits.They sure are looking after us; yeah right hand me and Marylyn a Moet. Sell their share I reckon and have a few caveats in place re kiwi employees etc. Time to leave business to run businesss. And if this great current management (who reward themselves over handsomely) did stuff up again well then the Govt could do it all again. sorta of a virtuose möbius loop:t_up:

[Snow Leopard]

Zodiac vows a lavatory Revolution (https://www.flightglobal.com/news/articles/aix-zodiac-vows-a-lavatory-revolution-435811/)

Might be useful for this thread :).

Best Wishes
Paper Tiger

[Beagle]

Stealing from its own citizens. The Govt is ripping us kiwis off (including this hypocrite:) with esp domestic fares ; unless you are on a main route and can pick up the cheap fares on their time frames which seldom fits.They sure are looking after us; yeah right hand me and Marylyn a Moet. Sell their share I reckon and have a few caveats in place re kiwi employees etc. Time to leave business to run businesss. And if this great current management (who reward themselves over handsomely) did stuff up again well then the Govt could do it all again. sorta of a virtuose möbius loop:t_up:

LOL had to book a last minute flight for my Mum to travel to Dunedin tomorrow for a funeral later this week...AKL to Dunedin tomorrow at 4.50 p.m. (business hours flight) $119 and back on Easter Tuesday $229 during peak Easter and school holiday time. Absolute theft...yeah right, definitely time for a Tui :) She's nearly 88 years old and really enjoys the superior service AIR offer...never too old to enjoy a good thing :t_up: She can't stand Jetstar either...must run in the blood..or maybe their service and aircraft really are third rate !

[JeremyALD]

Was travelling from Auckland to Napier today. Had two failed landings in Napier and the flight diverted back to Auckland. We were in the AIR for three hours!!! We got offered to try fly again at 5pm on another floghr and my answer was no thank you so I took the flight credit.

[Joshuatree]

Thats not a good enough reason to move to Auckland i never want to become a JAFA.
Drink your Tui JAFA, I'm having a nice Pinot Gris myself.:t_up:

[Beagle]

Was travelling from Auckland to Napier today. Had two failed landings in Napier and the flight diverted back to Auckland. We were in the AIR for three hours!!! We got offered to try fly again at 5pm on another floghr and my answer was no thank you so I took the flight credit.

Weather has been an absolute shocker. What are we up too now, the third one in 100 year weather event in the last month ?

Poor old Mum's going to have an "interesting" flight right through the middle of "Debbie" today on here way to Dunedin. Just as well there will be two highly experienced AIR pilots with many many thousands of hours of experience at the controls who have come up through the flight school ranks rather than being trained predominantly on a simulator like a lot of other airlines do...those simulators have a simulation for losing an engine mid flight in a bad storm and then landing in a 30 knot crosswind on one engine right ? :eek2: Another problem if the Govt ever were to sell AIR is we could end up with a fourth rate airline even worse than Jetstar as Jetstar's only competition...:eek2:

[Beagle]

Stealing from its own citizens. The Govt is ripping us kiwis off (including this hypocrite:) with esp domestic fares ; unless you are on a main route and can pick up the cheap fares on their time frames which seldom fits.They sure are looking after us; yeah right hand me and Marylyn a Moet. Sell their share I reckon and have a few caveats in place re kiwi employees etc. Time to leave business to run businesss. And if this great current management (who reward themselves over handsomely) did stuff up again well then the Govt could do it all again. sorta of a virtuose möbius loop:t_up:


Thats not a good enough reason to move to Auckland i never want to become a JAFA.
Drink your Tui JAFA, I'm having a nice Pinot Gris myself.:t_up:

I'd prefer not to comment on the name you've called yourself but it appears judging by the tone of your posts and words chosen this issue has really got under your skin so perhaps you should sell your shares as an effective protest ? Owning shares and receiving extremely healthy dividends so you can afford to enjoy regular fine wine appears to be somewhat morally repugnant to you.

Chill mate, nothing you I or Marilyn might say will effect any decision the government might make at some future point.

[dobby41]

Another problem if the Govt ever were to sell AIR is we could end up with a fourth rate airline even worse than Jetstar as Jetstar's only competition...:eek2:

Why would the quality of the airline be so closely coupled to Govt ownership?
I don't think there is shred of evidence for that.

Maybe the Govt should own everything if it is so great at managing business'?

[Beagle]

Why would the quality of the airline be so closely coupled to Govt ownership?
I don't think there is shred of evidence for that.

Maybe the Govt should own everything if it is so great at managing business'?

Anyone who has flown Jetstar knows that Qantas through their subsidiary are providing a second, (third or forth rate ?) service. Many other airlines train their pilots predominantly on simulators, that's a well known fact. All the evidence you need right there. Apart from that AIR as previously mentioned have conducted a major international study and found our airfares to be over all very competitive. Some people out in the regions may sometimes like to vent their spleen about regional airfare prices but they're generally very quiet when it comes to the upsides of living in the region in relation to air travel...like 5 minutes travel to the airport and vastly cheaper parking rates. Swings and roundabouts...

I reiterate the analogy point I made recently, if one of the major overseas owned oil companies dominated 80% of the fuel supply in N.Z. would fuel prices be where they are today ? We could rely on Etihad or one of the other sand state owned airlines to charge Kiwi's a fair price for domestic airfares, predominantly employ Kiwi's and pay circa $300m a year in PAYE, $150m a year in tax here couldn't we ?. Of course we could, (sarcasm intended).
As an aside I believe the Commerce commission decision to allow the merger of Z and Caltex to enable a somewhat dominant position was truly appalling.
I'm done with this "ownership" debate, life is too short....if other people want to waste their time regurgitating the issue over and over because of some axe they want to grind....I suppose that's their prerogative.

[dobby41]

So what you are saying, via your analogy, is that the govt ownership is having a restraining effect on prices.
Or is it that it is the NZ ownership (as opposed to foreign ownership) that is having that?
To former would imply the govt having more input into the running of the company than it does and the latter could be sorted with a limit % on ownership.

Also if this model is so good for AIR why isn't it used for other companies of national significance (like retirement villages etc)?

[Bobdn]

On a more positive note, heading off to Colombia this year. The absolute cheapest fare I could get was with AirNZ to Buenos Aires and then onto Bogotá. $2300 all up! Can you believe that? Love that South American​ link.

[Beagle]

The provision of a widespread network of safe, efficient and effective air travel is in the national interest which is why a lot of Governments around the world either own or have a significant stake in their national airline.
Without this you can get a third rate service where another airline with their own national interest will provide an aging fleet with very limited spare parts, engineering or staff backup and they only cherry pick the highly profitable routes.
Industries throughout N.Z. need the widespread, reliable, safe, efficient and effective service AIR provides...if owned by another country the network may be substantially rationalized and run in their national interest not ours.

[dobby41]

if owned by another country the network may be substantially rationalized and run in their national interest not ours.

You talk as if there are only 2 option - govt own or owned by another country.
For a person who shows a strong ability in detailed analysis this seems to show some bias.

[Beagle]

You talk as if there are only 2 option - govt own or owned by another country.
For a person who shows a strong ability in detailed analysis this seems to show some bias.

I have been responding to Mailyn's and joshuatree's posts which have been in support of selling the airline outright.

[777]

You talk as if there are only 2 option - govt own or owned by another country.
For a person who shows a strong ability in detailed analysis this seems to show some bias.

Take a look back in history and see what happened to AIR when Brierley Investments took a large controlling interest.

[RTFQ]

So what you are saying, via your analogy, is that the govt ownership is having a restraining effect on prices.
Or is it that it is the NZ ownership (as opposed to foreign ownership) that is having that?
To former would imply the govt having more input into the running of the company than it does and the latter could be sorted with a limit % on ownership.

Also if this model is so good for AIR why isn't it used for other companies of national significance (like retirement villages etc)?

The market dictates the prices. If they are so expensive, why is Jetstar not putting in more resources or another airline starting domestic operations.
To your last statement, They do its called, "Social Welfare" "State Housing" What ever. My bias to this company will probably pass the moment I sell it's shares.

[dobby41]

Take a look back in history and see what happened to AIR when Brierley Investments took a large controlling interest.

Was not the best of times that one!

[Beagle]

The market dictates the prices. If they are so expensive, why is Jetstar not putting in more resources or another airline starting domestic operations.
To your last statement, They do its called, "Social Welfare" "State Housing" What ever. My bias to this company will probably pass the moment I sell it's shares.

Hits the nail squarely on the head !

[skid]

http://www.economist.com/blogs/gulliver/2017/02/i-m-banned

[Joshuatree]

The market dictates the prices. If they are so expensive, why is Jetstar not putting in more resources or another airline starting domestic operations.
To your last statement, They do its called, "Social Welfare" "State Housing" What ever. My bias to this company will probably pass the moment I sell it's shares.


AIR I think have a big moat with all the facilities, infrastructure,brand, etc long established. I can't see how another airline can replicate this ; it would cost too much and take too long for not enough earnings.. Did Ansett try it out in the past and fail; sorry bit hazy there.Hey Roger , i poke at Aucklanders whenever i get the chance ; nothing personal thats why i put this :t_up: in.

[Beagle]

AIR I think have a big moat with all the facilities, infrastructure,brand, etc long established. I can't see how another airline can replicate this ; it would cost too much and take too long for not enough earnings.. Did Ansett try it out in the past and fail; sorry bit hazy there.Hey Roger , i poke at Aucklanders whenever i get the chance ; nothing personal thats why i put this :t_up: in.

All good Joshuatree. Yes Ansett with their four engine BA146's had a go for quite a while.

[theace]

Nice .... http://australianaviation.com.au/2017/04/air-new-zealand-unveils-new-seat-for-airbus-a320neoa321neo-fleet/

[RTFQ]

Haha Malaysia Airlines really aren't that bad!



http://www.avherald.com/h?article=483abb30&opt=0

AIR had something similar recently but their's was due huge windshear.

[weasel]

The market dictates the prices. If they are so expensive, why is Jetstar not putting in more resources or another airline starting domestic operations.


Because when they do, AIR lowers their prices, and forces them out again

[RTFQ]

Because when they do, AIR lowers their prices, and forces them out again


Is protecting ones patch not good business????????

[weasel]

Is protecting ones patch not good business????????

when did i say it wasn't good business?

[dobby41]

Is protecting ones patch not good business????????

Depends on whether you are a shareholder or customer.
Drop prices, force out competition, increase prices to gain monopoly profits.
Good for shareholder, not so good for customer.

[winner69]

On this day 50 years ago maiden flight of a NAC Boeing 737

Air NZ still leading the way

https://twitter.com/ArchivesNZ/status/850830627976994818

Love those posters from those days

[Joshuatree]

I see the main trunk route looks the same as 50 years ago. i haven't verified it yet but have heard Tauranga is now the 4th largest city so maybe it will become a main route soon (says he hopefully).

[777]

If you look at winner69's picture you will see it states "for NAC".

NAC actually got the first one in 1968.

ZK-NAC (c/n 19929, ex --) 737-219 First flown August 20, 1968 This aircraft was the first 737 on the New Zealand register. The aircraft was handed over to National Airways Corporation on August 30, 1968, and arrived in New Zealand on September 18. It went into service on October 7, 1968 named 'Piripiri'. Subsequently became part of Air New Zealand in 1978. Taken out of service on March 20, 1986 the aircraft had completed 36,553 hours/ 49,806 cycles in NAC/ANZ service. The aircraft was sold to International Finance Corporation (ILFC) and departed on March 24, 1986. The registration was withdrawn on April 22, and the aircraft become N321XV.


http://www.kiwiaircraftimages.com/737.html

[winner69]

If you look at winner69's picture you will see it states "for NAC".

NAC actually got the first one in 1968.

ZK-NAC (c/n 19929, ex --) 737-219 First flown August 20, 1968 This aircraft was the first 737 on the New Zealand register. The aircraft was handed over to National Airways Corporation on August 30, 1968, and arrived in New Zealand on September 18. It went into service on October 7, 1968 named 'Piripiri'. Subsequently became part of Air New Zealand in 1978. Taken out of service on March 20, 1986 the aircraft had completed 36,553 hours/ 49,806 cycles in NAC/ANZ service. The aircraft was sold to International Finance Corporation (ILFC) and departed on March 24, 1986. The registration was withdrawn on April 22, and the aircraft become N321XV.


http://www.kiwiaircraftimages.com/737.html

Thanks for that, very interesting

I should read Archives NZ tweets are bit more closely

First flight of a 737 today 50 years in 1967. First commercial fight by Lufthansa in Feb 1968. (Wiki)

NAC weren't too far behind.

Thanks 777

[Joshuatree]

The Kaimai crash: 50 years on | Stuff.co.nz (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwjfosHSlZjTAhVFnJQKHXcMA8gQFggfMAE&url=http%3A%2F%2Fwww.stuff.co.nz%2Fwaikato-times%2Flife-style%2F8863466%2FThe-Kaimai-crash-50-years-on&usg=AFQjCNGeqNGX8yy22xF4HqoH-vr7ua2AKw)

[iceman]

Met a couple yesterday (with elderly parents and a small child) that was booked to fly Nelson-Auckland. Their flight was canceled with few hours notice "due to insufficient staff". They were put on a later ATR flight that then had problems and circled Palmerston Nth airport for sometime before landing there with a suspected faulty nose wheel landing gear. Driven from there to Wellington and on another flight to Auckland. Not a good day for them relying on AIR. And I though they had flown Jetstar when they told me about all of this !!

[Beagle]

Very pleased it ended well for the passengers and crew. I heard about this on the radio as it unfolded. Could have been a different result if the landing gear really was inoperable. Relieved to hear on the 5.00 p.m. news everyone is well and plane landed safely. They did the right thing and evacuated everyone while the plane was still on the runway. Read another 9 flights in / out of Palmy were cancelled as the plane was left were it stopped awaiting a through engineering inspection.
Mechanical / electrical issues affect all airlines from time to time....far more so the incredibly old aircraft like Jetstar use.

[IAK]

Air New Zealand rated in the top 5 airlines in the world.

http://www.nzherald.co.nz/travel/news/article.cfm?c_id=7&objectid=11835698

[Beagle]

Air New Zealand rated in the top 5 airlines in the world.

http://www.nzherald.co.nz/travel/news/article.cfm?c_id=7&objectid=11835698

Nice :t_up: Can't see Qantas on that list or Virgin.

[ratkin]

Air New Zealand rated in the top 5 airlines in the world.

http://www.nzherald.co.nz/travel/news/article.cfm?c_id=7&objectid=11835698

Based on dodgy trip advisor reviews. Korean air in sixth, which has one of the worst safety records out there. But they cheap which no doubt led to some good reviews. I flew with them once, never again, flight was ok but Seoul airport very boring, and not a relaxing place to have to wait for connections

[Snow Leopard]

Based on dodgy trip advisor reviews.

Maybe.


Korean air in sixth, which has one of the worst safety records out there.

They have an excellent safety rating.


But they cheap which no doubt led to some good reviews.

They are definitely not cheap!


I flew with them once, never again, flight was ok but Seoul airport very boring, and not a relaxing place to have to wait for connections

Incheon airport is a lovely place to wait, Gimpo I do not know.
But if you have time then you can take the bus to Incheon town itself which is a great place to wander round.

[ratkin]

Maybe.


They have an excellent safety rating.



It must have improved, I last flew with them in 1999, at the time they had a terrible reputation, and back then they were cheap, and with good reason.
Looking at wikipedia it shows they had many incidents during the 1990s, but not so many now so maybe they have got their act together.
Currently they are rated around 50th for safety, which I guess is not too bad

[Snow Leopard]

World of difference between 'was' and 'is'


...wikipedia...

I hate that word.


24 years ago Domodedovo (http://www.domodedovo.ru/en/) was a terrible airport to wait for a flight at and Aeroflot domestic planes had overhead luggage shelves!.


Best Wishes
Paper Tiger

[777]

Quote "They have an excellent safety rating".

You have a short memory. I would not travel on them and have told my kids never to.

[Snow Leopard]

Quote "They have an excellent safety rating".

You have a short memory. I would not travel on them and have told my kids never to.

Air New Zealand flew into a mountain but everybody seems happy enough to get on their planes these days :).

Best Wishes
Paper Tiger

[Subway]

Not AIR, but bad look for United Airlines

http://www.courier-journal.com/story/news/2017/04/10/video-shows-man-forcibly-removed-united-flight-chicago-louisville/100274374/

Overbooked a flight, let everyone board, then decide that 4 passengers need to be offloaded, no one puts their hands up, so 4 chosen at random, one refuses, gets man handled off the flight...

[iceman]

Not AIR, but bad look for United Airlines

http://www.courier-journal.com/story/news/2017/04/10/video-shows-man-forcibly-removed-united-flight-chicago-louisville/100274374/

Overbooked a flight, let everyone board, then decide that 4 passengers need to be offloaded, no one puts their hands up, so 4 chosen at random, one refuses, gets man handled off the flight...

Yes was just watching that shocking news item, a couple of hours after booking a flight with United :-(

[dobby41]

That can't be good publicity for the airline.
Especially as it was so their own people could go instead.
Lawsuit coming I'd say - this is the USA!