AIR - Air NZ.

[winner69]

Scaremongering?

https://traveltalk.nz/news-opinion/air-new-zealand-about-to-be-hit-with-further-dreamliner-issues/

Extract-
Further issues have been found with the Trent 1000 engines which point to some major turmoil ahead, and disruptions this time around may even lead to the full grounding of Trent 1000 powered Dreamliner fleets.

[Benny1]

Scaremongering?

https://traveltalk.nz/news-opinion/air-new-zealand-about-to-be-hit-with-further-dreamliner-issues/

Extract-
Further issues have been found with the Trent 1000 engines which point to some major turmoil ahead, and disruptions this time around may even lead to the full grounding of Trent 1000 powered Dreamliner fleets.
Very real chance of Aircraft once again being parked.
NZE did not make it back in to service..and currently no spare engine available with more inspections to be made over the next couple of months.
This is a developing situation but one that could get quiet ugly..

[Raz]

I personally find it difficult to believe every hotel and motel in Auckland was booked out.
does not take much to book out all Auckland hotels from my experience and all the airports seem to run independent to the airlines and discourage access over night which use to be a given...

[iceman]

Very real chance of Aircraft once again being parked.
NZE did not make it back in to service..and currently no spare engine available with more inspections to be made over the next couple of months.
This is a developing situation but one that could get quiet ugly..

Thanks winner and Benny1 for this info. This is a really serious issue and from a customers pint of view, these engines should be completely replaced. I sold all my AIR last time this issue came to light and have only recently bought in again. Also booked on a Dreamliner flight in 3 weeks time so this is bad news.
I hope they haven't sent all the HiFly planes and crew back yet !!

[winner69]

Market took last disruptions in its stride ....hopefully share price won’t be affected this time either

[winner69]

https://airwaysmag.com/industry/rolls-royce-ups-estimate-to-fix-boeing-dreamliner-engines/

A worry in that once things start breaking you never really fix the problem .....applies to most things, not just plane engines

[iceman]

Market took last disruptions in its stride ....hopefully share price won’t be affected this time either

Could be quite disruptive to AIR if the United States Federal Aviation Administration slashes flight times over water and remote areas as discussed in this article http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12032557

[Beagle]

Before we all get a little carried away with this new information. It's one thing for engines, (plural) to be imploding and fan blades cracking left right and centre and quite another for just a simple increase in frequency of an existing check from every 2000 cycles to every 300, a check that only takes a couple of hours.

"The check involves looking at an area of the compressor, it is completed on wing (without removing the engine) and only takes a couple of hours."
Thoughts.
Doesn't sound like a major check to me.
AIR predominantly uses the newer engine variety on North American routes so these routes should be unaffected.
If ETOPS approval is reduced to 140 minutes they will have to redeploy Dreamliners on South American routes elsewhere in their network and substitute with 777 - 200 / 300 aircraft.
What has impressed me to date with this issue is that AIR have maintained increased forward guidance throughout the 787 disruption process which has included extensive use of other leased aircraft.
This would suggest to me in the absence of any other confirming data that the compensation coming from Rolls Royce is designed to ostensibly cover all or the vast majority of the disruption / costs incurred by AIR.
Two hour on wing engine inspections of an area of the intermediate compressor area of an engine every 300 cycles does not sound like a major disruptive factor but I would have to concede if the ETOPS certification is lowered this could be more problematic from a fleet utilization perspective however could lead to AIR having a legal claim for full replacement of these affected engines with the newer engine variant and compensation for damages incurred in the period leading up to replacement.

I think Rolls Royce are going to be taking the lion's share of the hit not AIR but I note RR shares fell by less than 1%.

[Baa_Baa]

It just never stops with airlines does it, bad news seems always just around the corner from good news. No sooner do we get the impression that everything is OK and it's worthwhile holding just for the dividends, albeit nearing SP highs (been a nice SP rise recently but the next divi is ages away in Sept), bingo some negative news comes along. Typical.

This time it's dragging up the unresolved issue of the flakey self-imploding engines and the certainty of more frequent inspections, which is minor compared to the possibility of flight time restrictions, and minuscule compared to an engine failure, or two and ... it doesn't bear saying!

I thought the engines thing had been fixed and blown over, but obviously not, maybe I got sucked into the 'she'll be right' rhetoric, or maybe just not paying enough attention after the recent SP bounce and nice follow through?

I wouldn't fly in a Dreamliner anymore until its totally fixed, stuff that. I don't care either whether Rolls Royce take a share of the pain. It's come back again, stupid flakey engines, just when it looked like we had a shot at the long term highs and a nice divi in Sept.

Maybe I should be saying, oh hey it's ok, not a big deal, RR will pay out, nothing to worry about. But if I did, it would be maligned as only being about propping up confidence while selling at the first sight of weakness on Monday.

Bloody airlines.

[Raz]

It just never stops with airlines does it, bad news seems always just around the corner from good news. No sooner do we get the impression that everything is OK and it's worthwhile holding just for the dividends, albeit nearing SP highs (been a nice SP rise recently but the next divi is ages away in Sept), bingo some negative news comes along. Typical.

This time it's dragging up the unresolved issue of the flakey self-imploding engines and the certainty of more frequent inspections, which is minor compared to the possibility of flight time restrictions, and minuscule compared to an engine failure, or two and ... it doesn't bear saying!

I thought the engines thing had been fixed and blown over, but obviously not, maybe I got sucked into the 'she'll be right' rhetoric, or maybe just not paying enough attention after the recent SP bounce and nice follow through?

I wouldn't fly in a Dreamliner anymore until its totally fixed, stuff that. I don't care either whether Rolls Royce take a share of the pain. It's come back again, stupid flakey engines, just when it looked like we had a shot at the long term highs and a nice divi in Sept.

Maybe I should be saying, oh hey it's ok, not a big deal, RR will pay out, nothing to worry about. But if I did, it would be maligned as only being about propping up confidence while selling at the first sight of weakness on Monday.

Bloody airlines.

I like your honesty....it would be nice if you had an active choice on flying their 787s currently however they have rescheduled us on these sucker aircraft after booking...may have to consider an alternative.... naturally at our additional expense...this does seem a long term disruptor.

[iceman]

This time it's dragging up the unresolved issue of the flakey self-imploding engines and the certainty of more frequent inspections, which is minor compared to the possibility of flight time restrictions, and minuscule compared to an engine failure, or two and ... it doesn't bear saying!

I thought the engines thing had been fixed and blown over, but obviously not, maybe I got sucked into the 'she'll be right' rhetoric, or maybe just not paying enough attention after the recent SP bounce and nice follow through?

I wouldn't fly in a Dreamliner anymore until its totally fixed, stuff that. I don't care either whether Rolls Royce take a share of the pain. It's come back again, stupid flakey engines, just when it looked like we had a shot at the long term highs and a nice divi in Sept.

Maybe I should be saying, oh hey it's ok, not a big deal, RR will pay out, nothing to worry about. But if I did, it would be maligned as only being about propping up confidence while selling at the first sight of weakness on Monday.

Bloody airlines.

Agree that the announced extra inspections are not a major issue per se, but the possible flight restrictions from US authorities would be a major blow.
While AIR and RR may well manage this well and with limited extra costs, it all comes down to current and potential new customers having faith. You've obviously lost faith in flying on these affected aircraft and so have I. I bet you we are not the only ones. And herein lies the risk for AIR.

[Maverick]

Stuff .co have this picture on the weekend news. It's the fan blades of one of these engines now requiring inspections every 300 long haul trips. Used to be 2000. Yikes...! My dentist has shown me better pictures of my back teeth before telling me I need to take out a small morgage. I cant actually believe this picture is a true representation of normal blades in service but if my mecahnaic said he wants to see my car every month now instead of yearly I'd buy a new car. Hard to see how frequent inspections actually fixes anything. The posters here warned of this last year and I sold on that concern so thank you to you guys. I like this company a lot but will be sitting this one out for now. Somehow this story is on stuff.co travel and not the business section and quite hard to find.So that might buy some time for anyone wanting to exit.https://www.stuff.co.nz/.../air-new-zealand-checks-on-rollsroyce-engines- spark-flight-changeshttps://www.sharetrader.co.nz/webkit-fake-url://7a18d952-47f1-4857-869d-169ab9791b20/imagejpeg

[Beagle]

I get it that some people are frustrated. Airlines do involve more risk than many other sectors which is exactly why they have traditionally traded on cheap PE multiples.
There are no investment free lunches. In my view the 2018 PE of 9.6 fairly reflects the potential risks and rewards.

[stoploss]

I get it that some people are frustrated. Airlines do involve more risk than many other sectors which is exactly why they have traditionally traded on cheap PE multiples.
There are no investment free lunches. In my view the 2018 PE of 9.6 fairly reflects the potential risks and rewards.
Beagle someone told me some of the ATR”s are out at the moment , you know anything about that ?

[Beagle]

Beagle someone told me some of the ATR”s are out at the moment , you know anything about that ?

ATR's have been a reliable work horse mate. Some of the early ATR 500's are more than 17 years old so one could be in for an engine overhaul or an upgrade.

[Benny1]

ATR's have been a reliable work horse mate. Some of the early ATR 500's are more than 17 years old so one could be in for an engine overhaul or an upgrade.

ATR 500's being gradually replaced with the 600's so don't think too much upgrade work is being carried out on these.. Will just be the usual planned maintenance and anything found during those checks..
Haven't heard of any ATR's being out of action...

[Mush]

https://community.infinite-flight.com/t/faa-plans-rollback-of-etops-time-for-trent-1000/205142

[winner69]

ETOPS or whatever they are shortened to 140 minutes .....at least in the USA

https://traveltalk.nz/news-opinion/air-new-zealand-about-to-be-hit-with-further-dreamliner-issues/

[winner69]

Bit of a worry that officials say there is a risk of both engines failing during a flight .....losing one would be bad enough.

Bit scary

Mind you I once flew 2 long hAul flights in DC10s (I think but those ones with an engine on the tail) when they were falling out of the sky and there was a mad exodus of passengers ....nice flights as row to your self on pretty empty planes.

[Beagle]

Important to understand that there is nine affected engines not nine affected planes.
Also important to understand that FAA change is temporary and RR are working on improvements to certain components of those engines.
I imagine AIR are well positioned to juggle their fleet such that those planes with engines temporarily affected by any possible future CAA change are assigned to routes that fit the new requirements and the other six Dreamliner's fitted with the "ten" version of this Trent engine and are unaffected are used on routes requiring 330 min ETOPS. In my view this is a sensible move by FAA in the circumstances until such time as Rolls Royce can overhaul all earlier version engines with newer components.

[value_investor]

Engine problems, crude oil prices going beserk. Now I remember why airlines are valued how they are!

AIR will do well to come out of all of this unscathed considering all the stuff that has happened this year. Its a testament to the company but says a lot about investing in airlines on a broader scale. Some things are just far out of your control.

[winner69]

Thousands of AIRpassengers affected

https://www.stuff.co.nz/business/industries/103207039/air-nz-cancellations-due-to-rollsroyce-engine-issues

As the House of Travel man says ...."Unfortunately they always take longer than you hope."

[Beagle]

No way to sugar coat this, AIR shareholders should ensure their seat belts are firmly fastened, seat back's upright and tray tables folded away. Depends how many cracked and delaminating turbine blades they find in all the 787's they inspect this week...think I might avoid use of the word "Dream"liner for a while.
Rolls Royce need to get their **** together, plain and simple. I think AIR's general counsel will be hounding RR for all costs and compensation they can point a stick at.
Wonder if they need a good contract forensic beancounting hound to sniff out all possible avenues of compensation...I'd be up for that role with a huge amount of gusto.., but alas they probably have it covered already, hence the no change to upbeat forecast statement.

www.nzherald.co.nz/business/nhttps://www.comvita.co.nz/ews/article.cfm?c_id=3&objectid=12034082

[bull....]

Engine problems, crude oil prices going beserk. Now I remember why airlines are valued how they are!

AIR will do well to come out of all of this unscathed considering all the stuff that has happened this year. Its a testament to the company but says a lot about investing in airlines on a broader scale. Some things are just far out of your control.


rising oil will bite soon in there results

[Beagle]

Yields and fuel prices are inextricably linked. I think this is the least of their problems.

[peat]

Does anyone have any knowledge as to what engine it was that blew up on that US SouthWest plane where that woman got killed.
Sorry if this is completely irrelevant to Air NZ but all the talk about engines on this thread and then this happening made me wonder and I couldnt see any mention of the engine type in the news

[777]

Different engines.

[winner69]

Does anyone have any knowledge as to what engine it was that blew up on that US SouthWest plane where that woman got killed.
Sorry if this is completely irrelevant to Air NZ but all the talk about engines on this thread and then this happening made me wonder and I couldnt see any mention of the engine type in the news

French/US engines

Interesting article

http://www.straitstimes.com/world/airlines-inspecting-boeing-737-engines-after-fatal-southwest-incident

[peat]

thanks for clarifying that accident is completely un related to the types of engines used by Air NZ.

[percy]

thanks for clarifying that accident is completely un related to the types of engines used by Air NZ.

Reassuring knowing any aircraft engine can explode.?

[couta1]

Reassuring knowing any aircraft engine can explode.? The fact that any engine, car or plane doesn't explode under load is a miracle in itself.

[dobby41]

Reassuring knowing any aircraft engine can explode.?

And not be contained!

[couta1]

And not be contained! How are you going to do that? The testing room for these engines have 8 foot thick concrete walls.lol

[dobby41]

How are you going to do that? The testing room for these engines have 8 foot thick concrete walls.lol

My point was too subtle - the engines are supposed to contain any flying debris within the casing (or engine) and not have it fly out and break a window.

[Raz]

As we have said before how an airline communicates when things go wrong can be very telling. Currently in the US heading home next week.

Had already read stuff and herald and noted cancelled flights re 787s disruption...no LAX flights included. In addition, did not expect a problem as booked on 777s on the way back to Auckland. Received no email or txt updates of further cancelations. Thought I would look at the detail AIR site..just as much from a shareholder interest...and there is LAX flights cancelled and some rescheduled 12 hours earlier and not inline with our domestic US connection flight for our outbound flight...

So onto the call centre..wait time..international call... 1 hour 40 min on hold....hmmmm

Then things improved..brilliant call centre operator..looks at our options and help us make new flights work...no extra cost..no hassle..tried a few questions to test her and clearly highly trained to de-escalate the situation.

So the people side was exceptional..IT and communication side..needs improvement...

[Raz]

My point was too subtle - the engines are supposed to contain any flying debris within the casing (or engine) and not have it fly out and break a window.

They are all talking about this issue here in the US...

[Lola]

as we have said before how an airline communicates when things go wrong can be very telling. Currently in the us heading home next week.

Had already read stuff and herald and noted cancelled flights re 787s disruption...no lax flights included. In addition, did not expect a problem as booked on 777s on the way back to auckland. Received no email or txt updates of further cancelations. Thought i would look at the detail air site..just as much from a shareholder interest...and there is lax flights cancelled and some rescheduled 12 hours earlier and not inline with our domestic us connection flight for our outbound flight...

So onto the call centre..wait time..international call... 1 hour 40 min on hold....hmmmm

then things improved..brilliant call centre operator..looks at our options and help us make new flights work...no extra cost..no hassle..tried a few questions to test her and clearly highly trained to de-escalate the situation.

So the people side was exceptional..it and communication side..needs improvement...

about time air nz had their feet held to the fire over customer communications. They are an arrogant bunch. I will always go jetstar in nz and have never had a problem.. Correction i did once and their service was a delight. Time that jetstar got a pat on the back..the media always give them a thrashing.

[garfy]

Air NZ - most reputable company in Australia
Air NZ - NZ best company.

I no complain!!!

[ratkin]

about time air nz had their feet held to the fire over customer communications. They are an arrogant bunch. I will always go jetstar in nz and have never had a problem.. Correction i did once and their service was a delight. Time that jetstar got a pat on the back..the media always give them a thrashing.

Funny how experiences differ, I had a nightmare with Jetstar, stuck in Wellingtomn for hours with no explanation or customer support. Vowed never to fly with them again.

[dobby41]

Funny how experiences differ, I had a nightmare with Jetstar, stuck in Wellingtomn for hours with no explanation or customer support. Vowed never to fly with them again.

Since we are on about Jetstar I had a fascinating experience.
Flight from Saigon to Auckland (via Melbourne) was cancelled and rebooked 1 WEEK later.
Yes - 1 WEEK.
It was all because they had actually cancelled the Melbourne to Auckland. Rebooked for a later that day flight.
But who in their right mind would think that rebooking for 1 week later would be OK????

[iceman]

A good Shoeshine article on NBR today headlined "Cracks in Air NZ's image after Dreamliner debacle".

[Beagle]

I see Toyota N.Z. have overtaken them and are now the most trusted brand in N.Z. (AIR second). Seems like a fair enough assessment to me.

[iceman]

I see Toyota N.Z. have overtaken them and are now the most trusted brand in N.Z. (AIR second). Seems like a fair enough assessment to me.

But AIR is till the most trusted brand in Aussie according to Colmar Brunton :-)

[Beagle]

No question this is going to hurt the brand a little bit, (folks its well worth reading shoeshines article this morning for the full detail) and I have to concede I agree with what's been said in that report.

I think AIR have quite a problem with these engines going forward as the FAA have only said they will consider re-establishing 330 min ETOPS in due course if RR can sort this issue properly. I read this as RR have to really prove this engine is going to be safe and that proof will only be forthcoming with quite some volumes of air passing through those overhauled engines, (i.e. a fair passage of time with no further engine failures and no further cracking of compressor blades)
I suspect it will take quite some time for the FAA to grant re-approval if indeed it is forthcoming which is by no means a certainty.
As Benny suggested recently, this has the potential from an operational point of view to get a little ugly for AIR...

We all know how much customers hate having their schedules messed up. Whilst they might be forgiving once or perhaps even twice because people understand that engineering issues happen from time to time but if there's ongoing disruption over the months ahead AIR's reputation will take a collateral hit no question.

Its hard to figure that they will completely escape meaningful direct costs for something somewhere along the line in direct operational cost too.

Disc: I have reduced my stake this week as a portfolio risk management strategy. There are no dividends in the next few months and I see this stock as primarily a dividend yield investment at this sort of price. I think the potential for a SP correction is real.

The change in ETOPS rating and how these aircraft may have their wings clipped from an operational perspective is what concerns me the most going forward and oil being at its highest level in 4 years is an emerging possible headwind too. Headwinds starting to build ? You be the judge and DYOR.

[Filthy]

Disc: I have reduced my stake this week as a portfolio risk management strategy. There are no dividends in the next few months and I see this stock as primarily a dividend yield investment at this sort of price. I think the potential for a SP correction is real.

yep, ditto.

rising oil prices do not help either. all 'okay' for now (because everything is hedged short-term) but a bit of a future risk if it continues to head north prior to the next purchase period.

expecting SP to come under a bit of pressure, albeit it seems to be holding up pretty well this week! - maybe the market is not that bothered....

[winner69]

yep, ditto.

rising oil prices do not help either. all 'okay' for now (because everything is hedged short-term) but a bit of a future risk if it continues to head north prior to the next purchase period.

expecting SP to come under a bit of pressure, albeit it seems to be holding up pretty well this week! - maybe the market is not that bothered....

Filthy .....Yields and fuel prices are inextricably linked.

Number of ASKs and capacity the main drivers

[Benny1]

Think there are now at least 2 787's parked up.. With AIR scrambling to fit 'good' engines to which ever airframe they can to get something flying...
Reliability is a very big part of an airline's reputation ...that is something AIR needs to preserve as much as possible.
Oil price is an interesting proposition as far a I'm concerned.. Yes this can and probably will hit the bottom line quite hard, but it will also have an effect on every other airline flying to or within New Zealand.
New Zealand is seen as a 'long thin route' and as such can be an attractive place to fly to when your costs are relatively low, however as soon as your costs rise NZ can become quite unattractive quite quickly to alot of foreign airlines so thick could lead to a quite significant drop in services from these airlines.
Any reduced competition will of course benefit AIR.
AIR can only take advantage of this however if they actually have planes they can fly 😱
One thing though... Should make for some interesting questions at the Shareholders meeting.. Pity I'm not a shareholder... !

[777]

The only route that requires 330 mins ETOPs is Buenos Aires.

All the Asian routes can be done with 120 mins ETOPS.

That leaves the North American routes that can be done with 180 Mins. A reduction to 140 mins would be a restriction.

However not all the engines are affected so dedicated aircraft can be used for the Americas, North and South.

[Beagle]

Think there are now at least 2 787's parked up.. With AIR scrambling to fit 'good' engines to which ever airframe they can to get something flying...
Reliability is a very big part of an airline's reputation ...that is something AIR needs to preserve as much as possible.
Oil price is an interesting proposition as far a I'm concerned.. Yes this can and probably will hit the bottom line quite hard, but it will also have an effect on every other airline flying to or within New Zealand.
New Zealand is seen as a 'long thin route' and as such can be an attractive place to fly to when your costs are relatively low, however as soon as your costs rise NZ can become quite unattractive quite quickly to alot of foreign airlines so thick could lead to a quite significant drop in services from these airlines.
Any reduced competition will of course benefit AIR.
AIR can only take advantage of this however if they actually have planes they can fly ��
One thing though... Should make for some interesting questions at the Shareholders meeting.. Pity I'm not a shareholder... !

Thanks for the fleet update mate and you make some good points and I have always said that oil around $70 a barrel is probably the sweet spot for AIR as it discourages too many other airlines flying the long skinny routes here and at this price AIR get a good return on the capex of these 787's but a prerequisite to that was my assumption that these fancy new carbon fiber birds are reliable.

Thanks 777, they'll be using the new code 2 configuration (more premium economy and business class seating) 787's to North America which have the new ten variant Trent engine fitted so they should be okay, provided that variant proves to be durable, (only time will tell on that front). Hi Fly charter aircraft will be back, that's my prediction and with them more passenger discontent.

[Sideshow Bob]

I see Toyota N.Z. have overtaken them and are now the most trusted brand in N.Z. (AIR second). Seems like a fair enough assessment to me.

As an aside, Toyota are rapidly changing their 'model' which seems like they make a few more friends??

https://www.stuff.co.nz/business/102686931/toyota-nz-to-ditch-dealerships-will-sell-cars-from-three-hubs

[winner69]

A couple of engines need to go to Singapore to get fixed ...out of action for a few months .....bugger

https://traveltalk.nz/news-opinion/air-new-zealand-about-to-be-hit-with-further-dreamliner-issues/

Once broken ...always a bit dodgy I reckon

[Beagle]

A couple of engines need to go to Singapore to get fixed ...out of action for a few months .....bugger

https://traveltalk.nz/news-opinion/air-new-zealand-about-to-be-hit-with-further-dreamliner-issues/

Once broken ...always a bit dodgy I reckon

I'd like to think that after this latest round of inspections and the pending overhaul of the engines that are presently inspected as unsuitable for service would be put this whole matter to rest but unfortunately what I think is that the remaining engines in service are simply operationally acceptable for now, but they will also need to be overhauled in due course. I think this is a 100% certainty and RR simply cannot overhaul all these engines in worldwide service fast enough so regrettably its possible we could see ongoing disruption going forward well into 2019 as well.
One would hope that AIR take this matter seriously and lease those 5 available 777's that someone talked about earlier this week which would give them considerable fleet optionality going forward. Hopefully AIR promptly give shareholders some detailed colour on how they will address this very serious issue ASAP.

[Mush]

https://www.flightradar24.com/ANZ99/111bdd8b

NZL currently in a holding pattern off northland

[winner69]

https://www.flightradar24.com/ANZ99/111bdd8b

NZL currently in a holding pattern off northland

Obviously not going to Tokyo is it

Long few hours going nowhere

[winner69]

Obviously not going to Tokyo is it

Long few hours going nowhere

Got a problem with its air reticulation system

Engine OK

Bit dodgy these Dreamliners?

[winner69]

Got a problem with its air reticulation system

Engine OK

Bit dodgy these Dreamliners?

It’s only a few months old that ZK-NZL .....do AIRplanes have warranties?

[winner69]

Got a problem with its air reticulation system

Engine OK

Bit dodgy these Dreamliners?

After three hours back at AKL ...prob time to fit in one movie

What happens on board when air reticulation goes wonky

[Filthy]

http://www.stuff.co.nz/business/103295313/Air-New-Zealand-engine-checks-to-cause-further-disruption-to-travellers

[Beagle]

Oh dear...RR in the gun for repair and no doubt for direct costs like alternative leased aircraft but what about other impacts on AIR ?
What about the fact that with all the unknowns with these aircraft's engines, *where there's smoke there's fire" and with schedule changes coming left right and center for months on end and leased in old planes...the question becomes if you were booking a trip in the near future and there's another quality airline that travels on the same route why would you take a chance on AIR now ?
How do you quantify the reputational damage and loss of business ? I would think the chances of getting compensation for that from RR even if you could quantify it is slim to none. Are analysts who are notoriously slow to change their opinion with AIR about to follow the hounds nose and sniff the breeze of headwinds coming ?

Goodwill only lasts so long and if you keep mucking people around without compensating them properly, (which seems to be their current modus operandi, i.e. just claim on your travel insurance and gosh we're sorry folks it's not our fault), eventually even loyal customers get miffed and book on another airline.

[iceman]

Oh

Goodwill only lasts so long and if you keep mucking people around without compensating them properly, (which seems to be their current modus operandi, i.e. just claim on your travel insurance and gosh we're sorry folks it's not our fault), eventually even loyal customers get miffed and book on another airline.

Agree Beagle. Yesterday I sold all my AIR shares. Today I am looking for an alternative airline to fly with my regular long haul flights. I wont be alone. AIR has got serious reputation issues and keeping their heads in the sand will not fix it

[Raz]

Agree Beagle. Yesterday I sold all my AIR shares. Today I am looking for an alternative airline to fly with my regular long haul flights. I wont be alone. AIR has got serious reputation issues and keeping their heads in the sand will not fix it

Snap, I was not going to be first to say it and surprised who said it first :-) The other point to clarify is most travel insurance will not cover this as it is classified as an airline controllable event..most events will be flights cancelation from management rescheduling of flights ...

[winner69]

Agree Beagle. Yesterday I sold all my AIR shares. Today I am looking for an alternative airline to fly with my regular long haul flights. I wont be alone. AIR has got serious reputation issues and keeping their heads in the sand will not fix it

Maybe our man Chris is struggling to balance maximising shareholder returns in the short term and doing what’s best for AIR long term. Short terminism not good.

In a recent interesting Forbes article it mentioned that a couple of HBR guys said that maximizing shareholder value is “the error at the heart of corporate leadership.” It is “flawed in its assumptions” and even went on to say it is “pernicious nonsense”

Hope Chris is not keeping his head buried in the sand as you suggest Iceman but AIR seems to be keeping a pretty low profile with these current problems.

[Beagle]

Maybe our man Chris is struggling to balance maximising shareholder returns in the short term and doing what’s best for AIR long term. Short terminism not good.

In a recent interesting Forbes article it mentioned that a couple of HBR guys said that maximizing shareholder value is “the error at the heart of corporate leadership.” It is “flawed in its assumptions” and even went on to say it is “pernicious nonsense”

Hope Chris is not keeping his head buried in the sand as you suggest Iceman but AIR seems to be keeping a pretty low profile with these current problems.

He doesn't do that but he wouldn't talk to NBR despite repeated requests according to shoeshine on Friday, the poor bugger is probably scrambling to understand the enormity of the issue and how to deal with it. I'd expect some explanation from AIR early this coming week on what their intentions are to manage and mitigate the problems.
Disc: As mentioned earlier this week, I reduced my stake as a risk management strategy, still have some. Feel sad for the company that they have to endure this **** from Rolls Royce.

[Baa_Baa]

Foolishly I thought the engine thing had subsided, got sucked into the rhetoric, media and optimistic chatter here, a lesson in keeping ones eyes firmly on the ball.

Albeit a bit of SP movement has presented some trading opportunities, though trading what is emerging as a negative sentiment environment is much more challenging than trading positive sentiment as we have less opportunity here in NZ to work the downside as we do the upside.

Clearly the engine issue hasn't subsided. The tightly increased frequency of engine checks and the punitive ETOPs restrictions show how serious the problems are, world wide - this is not just AIR, but every Dreamliner with the dodgy engines. Worst case, it's not a long bow to draw to suggest a couple more issues could down the worldwide fleet, until it's fixed.

Hopefully it won't come to that, but as they say hope is an awful investment strategy, so better maybe to just avoid and observe while the debacle unfolds.

[Beagle]

Yeap, listening to Chris Luxon in late February 2018 in the conference call...we have a really great relationship with RR e.t.c.e.t.c.e.t.c.... all problems to be fully resolved by mid April e.t.c.e.t.c.e.t.c... its hard to believe its come to this. Feel a bit miffed although to be fair the SP has risen from $3.05 on the day of the announcement Feb 23 I think it was as high as late 330's at one stage plus an 11 cent interim divvy in the last two months so hardly a trip down the garden path but nonetheless frustrating for those like me that bought long term hoping for a fairly safe divvy yield. Now its frankly anyone's guess the impact on FY19 earnings ? How you quantify that, quite frankly I have no idea which really leaves long term investors in no mans land doesn't it ! I know average forward booking period is approx. 2 months so profit impact in FY18 should be minimal as RR pick up charter plane replacement lease costs for sure but impact next year on bookings as people lose confidence in the "dream"liner ? and get sick of getting mucked around, how can anyone quantify the financial impact of that ????? The very first thing AIR came out and said this week was 16 of our long haul fleet of 27 planes are not Dreamliners. Sorry team, but if that was meant to reassure shareholders it did quite the opposite !!

[theace]

Some detail on the issues from RR, mentioning AirNZ: https://youtu.be/4IHKLr-OztI

[oldtech]

Actually got up to at least $3.415 Beagle, on the 11th of April ... I know this because that's when I sold what I had left. :)

I have made a reasonable amount of money from Air NZ in the past and will look to get back in at the right time, but as a relatively cautious investor I'm also taking a risk-minimisation approach right at the moment.

[Beagle]

Nice timing oldtech, can't beat that.
http://www.scoop.co.nz/stories/BU1804/S00548/global-rolls-royce-engine-issue-air-nz-update-three.htm Regarding that last sentence...that last sentence, they would say that wouldn't they !

[Raz]

Nice timing oldtech, can't beat that.
http://www.scoop.co.nz/stories/BU1804/S00548/global-rolls-royce-engine-issue-air-nz-update-three.htm Regarding that last sentence...that last sentence, they would say that wouldn't they !


The knowledge of the respective deterioration on the relevant engine parts must still be developing otherwise the full checks conducted in December would have established the current engine issues and changed the maintenance program then. Just four months ago. I'm going to avoid these planes... if it means travelling with someone else so be it.


https://www.stuff.co.nz/business/industries/103313019/air-nzs-long-haul-stops-forced-by-dreamliner-safety-concerns

[Benny1]

The knowledge of the respective deterioration on the relevant engine parts must still be developing otherwise the full checks conducted in December would have established the current engine issues and changed the maintenance program then. Just four months ago. I'm going to avoid these planes... if it means travelling with someone else so be it.


https://www.stuff.co.nz/business/industries/103313019/air-nzs-long-haul-stops-forced-by-dreamliner-safety-concerns

The original checks and rectification of the engines in December and early this year were solely based on the Turbine blade issue, as far as I am aware the rest of the engine was not inspected at that time..
The fact that this engines are only a few years old is probably the most concerning aspect of all this, and long term reliability must be called into question.

Looks like Hi-fly will be back for a short term wet lease (with crew) in the middle of next month, AIR also trying to secure a 777-200 on a dry lease ( AIR to crew and maintain) for up to 12 months.

[Baa_Baa]

The knowledge of the respective deterioration on the relevant engine parts must still be developing otherwise the full checks conducted in December would have established the current engine issues and changed the maintenance program then. Just four months ago. I'm going to avoid these planes... if it means travelling with someone else so be it.


https://www.stuff.co.nz/business/industries/103313019/air-nzs-long-haul-stops-forced-by-dreamliner-safety-concerns

It does raise some profound questions doesn't it, the more it's looked at, the worse it seems to get. Seems to be evolving into differing circumstantial interpretations:

- As a passenger, probably would rather just not fly on a plane that has any doubt around it's engines. Choice is a fine thing, AIR needs to provide the alternatives or competitors will.

- As an airline, play it down "it's all ok", schedule alternate aircraft and modify flights to accomodate restrictions - for those who will still fly on the Dreamliner. Trust them?

- As an investor, asking 'is this a biggie'? Not sure really, the market seems to be either slow to take on the implications or just not too concerned (so far), as it hasn't seemed too concerned since the situation began.

Doesn't quite fit with a volatile share, maybe investors are the possums in the headlights?

[dobby41]

At what point do they ask for their engine money back and go buy some decent ones?

[Beagle]

Raz- I don't blame you for not wanting to fly on one, I wouldn't either and I am pretty sure anyone cognisant of all the facts with these engines when presented with another airline of a similar standard on the same route would choose the alternative airline and who could blame them ?
CAA have obviously followed FAA requirements regarding ETOPS restrictions and the weight restrictions and having to make dog leg refueling stops shows what an unmitigated fiasco this really is.

Behind the paywall article on NBR yesterday suggested that RR sells most of its engines on a so called "total care" package basis such that they wear any unscheduled maintenance and cover direct costs incurred as part of any unscheduled downtime but I would suggest we are WAY past that covering the loss of reputation and lost business as people simply make safer choices around their travel. I'd be very surprised if there's any provision within that so called total care contract to cover the collateral damage to reputation and loss of confidence causing loss of business but I wouldn't completely rule out pressure being applied in that sense...certainly plenty of work for AIR's in-house legal counsel coming up I would think.

AIR must be ruing their decision to run with the so called Rolls Royce engine solution for these aircraft which has proved so far to be anything but a "Rolls Royce" solution. I think this issue dog's them well into 2019 as all the other engines need overhaul. Only time will tell if there are any other systemic weaknesses within those engines but they are made in the U.K. and contain 30,000 individual parts...you folks join the dots.

One wonders if they can retrofit the alternative engines and jettison these highly problematic engines once and for all ?
The potential for broker analysts to take a more negative view on AIR should be abundantly clear.
How does one forecast profit for FY19 with this ongoing fiasco causing loss of business and significantly more inefficient use of remaining 787's in service and Brent oil now at $75 ?

Is NZE one of the two grounded 787's or are there 3 grounded planes now Benny1 ?

[Benny1]

Yep NZE is one of the grounded aircraft. That hasn't flown since early December, has been repaired completely, but now needs engines, I think the engines that were to be fitted have been used to keep other aircraft flying.
One aircraft will return to service today or tomorrow so that will leave two grounded .
Sorry not seen any timeline as of yet for when these aircraft are expected back in the air.
As they are bringing in replacement aircraft it looks like this will be on going for a while yet.

[winner69]

Yep NZE is one of the grounded aircraft. That hasn't flown since early December, has been repaired completely, but now needs engines, I think the engines that were to be fitted have been used to keep other aircraft flying.
One aircraft will return to service today or tomorrow so that will leave two grounded .
Sorry not seen any timeline as of yet for when these aircraft are expected back in the air.
As they are bringing in replacement aircraft it looks like this will be on going for a while yet.

How long did it take to fix ZQ-NZL air problem the other day.

It seems to be dog legging its way around the world ...Papeete, Darwin and Guam etc

[Benny1]

Not sure about NZL don't think it would have been too much of a major.

[Beagle]

At what point do they ask for their engine money back and go buy some decent ones?

This interesting snippet from Wikipedia

The two different engine models compatible with the 787 use a standard electrical interface to allow an aircraft to be fitted with either Rolls-Royce Trent 1000 or General Electric GEnx engines. This interchangeability aims to save time and cost when changing engine types;[6] while previous aircraft could exchange engines for those of a different manufacturer, the high cost and time required made it rare.[225][226] In 2006, Boeing addressed reports of an extended change period by stating that the 787 engine swap was intended to take 24 hours.[22

Not impossible...sometimes you are better to cut your losses and move on...

Behind the paywall article on NBR suggested the RR engines cost $14m each, (they didn't say if that was $US or $NZ)

About $250m then for 18 new engines...but I seriously doubt G.E. have 18 new engines just sitting on the shelf ready for sale and sadly therein lies the problem.

[Beagle]

http://www.scoop.co.nz/stories/BU1804/S00594/ngati-porou-and-air-new-zealand-sign-partnership-agreement.htm

I am sure Shane Jones will be happy so shareholders should be ecstatic too, right ?

[Beagle]

Might explain why the SP hasn't tanked.
https://www.msn.com/en-nz/travel/news/unpopular-airline-hi-fly-could-be-returning-to-nz-skies/ar-AAvXLqy?li=AAaeXZz&ocid=spartandhp
Last paragraph is especially interesting.
The cost is piling up for Rolls-Royce. Air New Zealand purchased the engines with total warranty cover meaning the cost of any disruption or replacement aircraft has to be covered by the engine manufacturer rather than the airline itself. Emphasis added.
No doubt the total cost of the disruption will keep the bean counters very busy doing the sums.

[Baa_Baa]

Doesn't look too bad for Rolls Royce at this stage, although the death cross has happened and simple MACD looking a bit sick.
9646
Monthly chart with 50MA and 200MA approximations.

[iceman]

Might explain why the SP hasn't tanked.
https://www.msn.com/en-nz/travel/news/unpopular-airline-hi-fly-could-be-returning-to-nz-skies/ar-AAvXLqy?li=AAaeXZz&ocid=spartandhp
Last paragraph is especially interesting. Emphasis added.
No doubt the total cost of the disruption will keep the bean counters very busy doing the sums.

Its impossible to evaluate the cost IF customers lose faith in the Dreamliners and possibly even the AIR brand.Only time will tell what effect this will have on AIR. Too risky for me.

[Beagle]

Its impossible to evaluate the cost IF customers lose faith in the Dreamliners and possibly even the AIR brand.Only time will tell what effect this will have on AIR. Too risky for me.

I agree that its difficult to imagine they escape this fiasco without some collateral damage. I am expecting a slick public relations campaign once this issue is fully resolved and some heavily discounted fares to get the public back on board. The question in my mind given that I think its crystal clear that all the Trent 1000 engines will need to be overhauled is how long will this entire process take ? Then we have the question about the durability of the new fan blade design that's already in the ten version of this engine and is the rest of the engine reliable ? I think this is likely to dog AIR well in 2019 and possibly even longer ?
Nightmare liner ? Look at the impac t already...more flight and aircraft changes than you can shake a stick at https://www.airnewzealand.co.nz/travel-alerts?eventid=tyFOfznN4n3MGlii7RwS The fleet management team must be working extremely hard.

[Beagle]

Excellent article behind the paywall on NBR this morning. NBR earned their sub this month just with that one article alone.
Its deeply concerning that no director or the CEO will engage with the media over this at present.
Apparently its far more important for the Board to be meeting Iwi in Gisborne to ink a new regional development program including buying their carbon credits than to front foot this serious fiasco with the public or media at this time.
AIR claim this will not affect their 2018 earnings.
I think they're being disingenuous with the public and shareholders over how long this overhaul fiasco will take...it is absolutely certain all those Trent 1000 so called Package C engines will require overhaul and with Rolls Royce scrambling to try and deal with approx. 340 of these engines its quite possible this fiasco takes considerably longer than anyone's currently thinking.

I think this is certain to impact 2019 earnings as customers either lose confidence or get sick and tired of the delays and rescheduling.
Customer goodwill only lasts so long and is already stretched from more than four months of this fiasco. How will customers react if there's another 12-18 months of substandard service from the likes of Hi Fly ?

AIR managements refusal to engage with leading business journalists from NBR despite repeated requests is very troubling. Not much point in me emailing Chris Luxon and telling him he's making a complete hash of this, its perfectly obvious he is and I am sure I wouldn't get a reply.

Tony Carter doing a "great job" on the FBU board too.

Keeping just enough shares so I can bleat louder than a lamb lost from its mother at the annual meeting.

[Benny1]

Excellent article behind the paywall on NBR this morning. NBR earned their sub this month just with that one article alone.
Its deeply concerning that no director or the CEO will engage with the media over this at present.
Apparently its far more important for the Board to be meeting Iwi in Gisborne to ink a new regional development program including buying their carbon credits than to front foot this serious fiasco with the public or media at this time.
AIR claim this will not affect their 2018 earnings.
I think they're being disingenuous with the public and shareholders over how long this overhaul fiasco will take...it is absolutely certain all those Trent 1000 so called Package C engines will require overhaul and with Rolls Royce scrambling to try and deal with approx. 340 of these engines its quite possible this fiasco takes considerably longer than anyone's currently thinking.

I think this is certain to impact 2019 earnings as customers either lose confidence or get sick and tired of the delays and rescheduling.
Customer goodwill only lasts so long and is already stretched from more than four months of this fiasco. How will customers react if there's another 12-18 months of substandard service from the likes of Hi Fly ?

AIR managements refusal to engage with leading business journalists from NBR despite repeated requests is very troubling. Not much point in me emailing Chris Luxon and telling him he's making a complete hash of this, its perfectly obvious he is and I am sure I wouldn't get a reply.

Tony Carter doing a "great job" on the FBU board too.

Keeping just enough shares so I can bleat louder than a lamb lost from its mother at the annual meeting.

You almost make it sound tempting to buy a few shares just so I can come along and listen to you at the meeting!
Well almost....
Think this issue will be around for a while... Engines are sent to Rolls for a patch up job..they will all eventually have to be removed once more sent to Rolls for a permanent fix...if one is forthcoming from Rolls.
Hi-Fly is here from middle of next month for a short term lease only. Ex Singapore 777-200 will be in the fleet for up to a year.
One would presume that would take over the AKL-SIN route.. Will have AIR crew.. and SIN look after maintenance?
The silence from the board or the Exec is troubling. Some should be front-footing this..
I think they genuinely would have no idea though if asked how long this is all going to take to get resolved..

[winner69]

On the crappy water in Christchurch thread there’s mention of chemtrails ....planes putting stuff into the atmosphere (and some punters say stuff to change the behaviour of the populous)

Jeez - looks like Air NZ might be involved
https://chemtrailsnz.wordpress.com/category/commerical-airlines/air-new-zealand-commerical-airlines/

Rather spookily yesterday was a beautiful sunny day with blue skies in Wellington and I was intrigued with these narrow white clouds over Cook Strait. Not your normal vapour trail from the planes heading to the South Pole but a lot lower ...and I feel weird today.

[Xerof]

...and I feel weird today.

Take a tablet for AIR sickness Winner......:cool:

[winner69]

Take a tablet for AIR sickness Winner......:cool:

.....might try one of those new Blis ginger lozenges .....ginger meantbto be good for sea and air sickness and it will kill the bugs as well.

[Beagle]

You almost make it sound tempting to buy a few shares just so I can come along and listen to you at the meeting!
Well almost.... I do enjoy a good bleat...which is probably perfectly obvious to anyone on sharetrader :lol: I might look up the minimum holding requirement for you, could be worth the price of admission :D
Think this issue will be around for a while... Engines are sent to Rolls for a patch up job..they will all eventually have to be removed once more sent to Rolls for a permanent fix...if one is forthcoming from Rolls.And therein lies the real rub. Are these engines really just lemons ? I once sold a supercharged V8 powered car bought brand new because it simply burned too much oil which according to the manufacturer was within acceptable limits. Sometimes its better to simply jettison a pup of an engine and be done with it but getting the Board to understand that... I would suspect you'd be on a hiding to nothing as all you ever hear from Chris Luxon on the conference calls in we have a very good relationship with RR
Hi-Fly is here from middle of next month for a short term lease only. Ex Singapore 777-200 will be in the fleet for up to a year.
One would presume that would take over the AKL-SIN route.. Will have AIR crew.. and SIN look after maintenance?
The silence from the board or the Exec is troubling. Some should be front-footing this..
I think they genuinely would have no idea though if asked how long this is all going to take to get resolved I would think you'd be absolutely right which is a real worry..


On the crappy water in Christchurch thread there’s mention of chemtrails ....planes putting stuff into the atmosphere (and some punters say stuff to change the behaviour of the populous)

Jeez - looks like Air NZ might be involved
https://chemtrailsnz.wordpress.com/category/commerical-airlines/air-new-zealand-commerical-airlines/

Rather spookily yesterday was a beautiful sunny day with blue skies in Wellington and I was intrigued with these narrow white clouds over Cook Strait. Not your normal vapour trail from the planes heading to the South Pole but a lot lower ...and I feel weird today.

Be sure to wear your tin foil hat and everything will be fine mate :p Not sure we need yet another thing to worry about right at the minute !

Hard to believe our overseas based cat hasn't stuck his paw / oar into this issue isn't it ! Amazing we haven't hear one or two I told you so's already...he must be off the grid at present.

[winner69]

Market doesn’t think there’s any impending disasters to hit AIR

Share price holding up well

[Beagle]

Market doesn’t think there’s any impending disasters to hit AIR

Share price holding up well

AIR say there's no impact to FY18 earnings so the market has taken comfort from that. Very few people thinking about FY19 earnings impact...YET.

Just consider this. Joe average Bloggs is about to make a new booking on a popular route flown by a number of airlines for travel later this year.
He has a choice of quality airlines only one of which is having major problems with its engines, has safety concerns about its remaining so called dreamliners and is embarking upon massive upheaval to its scheduled flight program. This airline is not even compensating its customers properly. Why would Joe average Bloggs choose to now make that new booking with AIR ? No easy way for AIR to quantify that potentially significant amount of lost business in the future or seek redress from RR is there and that's before we even consider their reputation damage.

All good for this financial year because most of the current year's flights are already booked, (average lead booking is just over 2 months) but you'll see the first impact on their balance sheet as at 30 June 2018 with much lower forward bookings, mark my words. They'll be scrambling to fill flights once they're in a position to put them on again properly in my opinion. Analysts asleep at the wheel as usual and will wait until AIR management actually tell them the bleeding obvious that the outlook for FY19 isn't quite so good, before adjusting their forecasts down. Fortunately some of us have the wherewithal to sense the headwinds before they arrive in full force.

[Poet]

Spot on Beagle
I’m currently on route to Narita airport to board one of these pos aircraft and none too happy with the communication from air re the safety issues.
I certainly won’t book on one again
To be honest, in my opinion air has deteriorated significantly in the last few years and has fallen behind the likes of emirates in terms of value for money
Air used to be my go to airline, but not any more
As an example my next trip to Europe is booked with emirates at a price around $2000 cheaper than air equivalent and emirates will provide free ground transport at both ends plus in flight wifi and a safe aircraft
I wouldn’t think about holding air shares right now ( and I have had large holding in the past)
Anyway all just my view as a customer

[Robomo]

Spot on Beagle
I’m currently on route to Narita airport to board one of these pos aircraft and none too happy with the communication from air re the safety issues.
I certainly won’t book on one again
To be honest, in my opinion air has deteriorated significantly in the last few years and has fallen behind the likes of emirates in terms of value for money
Air used to be my go to airline, but not any more
As an example my next trip to Europe is booked with emirates at a price around $2000 cheaper than air equivalent and emirates will provide free ground transport at both ends plus in flight wifi and a safe aircraft
I wouldn’t think about holding air shares right now ( and I have had large holding in the past)
Anyway all just my view as a customer

Have to be careful with prices. $2000 cheaper sounds like a good deal but it depends entirely on what dates you are flying. I've also been looking...
24 September - 25 October: Emirates business $$7643, AirNZ $8720 (or via Singapore on SIA SIN-LHR $7653). Difference is $1077 / $10
27 June - 27 July: Emirates $7646, AirNZ $10271. Difference is $2625.
Air NZ business is sold out on 26 June.

From a shareholder point of view I'm happy to see those figures, ANZ obviously has no problems selling business class seats even at a considerable premium to Emirates.

[winner69]

This is cool innovation Emirates about to try. Apparently AIR didn’t think much of the idea so it must be crap ....but cool nonetheless

Get the feel for your seat before booking

https://runwaygirlnetwork.com/2018/04/26/virtual-reality-tool-to-help-you-choose-a-better-aircraft-seat/

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12039768

Virgin fighting back.

[BlackPeter]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12039768

Virgin fighting back.

Love it (as customer) - another trans Tasman price war looming. Hope though Virgin establishes as well some NZ routes, otherwise we might be back to the days where it is cheaper to fly CHC-SYD-AKL than take the direct route.

Whatever it is - the margins for shareholders might be a bit slimmer in the years to come. Better watch this fight from the sidelines ...

[Raz]

Have to be careful with prices. $2000 cheaper sounds like a good deal but it depends entirely on what dates you are flying. I've also been looking...
24 September - 25 October: Emirates business $$7643, AirNZ $8720 (or via Singapore on SIA SIN-LHR $7653). Difference is $1077 / $10
27 June - 27 July: Emirates $7646, AirNZ $10271. Difference is $2625.
Air NZ business is sold out on 26 June.

From a shareholder point of view I'm happy to see those figures, ANZ obviously has no problems selling business class seats even at a considerable premium to Emirates.

More a case of how many business class seats they have to sell. Back home and AIR put us on a 777 from Auckland international to Christchurch yesterday as a domestic flight..caught a lot of people out as they require bus transport over from the domestic resulting in boarding being a good twenty minutes earlier than a normal domestic flight. Caught a lot of Auckland based passengers out from conversations had. The chatter about added stress with AIR will spread so enough.

[winner69]

March stats

First impression a BOOMER of a month for long haul but more than solid numbers overall

No wonder guidance unchanged ...might need to upgrade the outlook

https://quoteapi.com/resources/da9866271f9d0071/announcements/air.nzx/317254/AIR_Air_New_Zealand_Investor_Update_(Op_Stats)_Mar ch_2018.pdf?bearer=eyJhbGciOiJIUzI1NiIsInR5cCI6Ikp XVCJ9.eyJzY29wZSI6WyJndWVzdHMiLCJ1c2VycyJdLCJuYmYi OjE1MjQ3ODQ0MTYsInN1YiI6Nzg5Njk1LCJpc3MiOiJzdG9ja2 5lc3MiLCJub25jZSI6IjgzYWJkYjUxYmE1MjAzY2MiLCJpYXQi OjE1MjQ3ODQ0MTYsImV4cCI6MTUyNDc4NTMxNn0.dzkh2MGyQv uEPXYLexlDlWtpEUaKydkhbEMiFrDc_4c

[Beagle]

Agree that those are very good operating stat's for March. Everything looks fine...in the rear view mirror.
Doubt it will happen but wouldn't it be ironic as a result of all this chaos they found that demand was pretty inelastic and they actually made more money by having to cancel / reschedule some flights and by carrying higher load factors.

[winner69]

Another look thrugh and enter into model the conclusion is -

AIR revenue growth v prior periods is getting stronger as each month goes by - there is some impressive positive momentum in the numbers

Business resilience is a great thing

[Beagle]

Another look thrugh and enter into model the conclusion is -

AIR revenue growth v prior periods is getting stronger as each month goes by - there is some impressive positive momentum in the numbers

Business resilience is a great thing

Well if they can get all the way through these engine drama's unscathed I'll take my hat off to them and take a really good stake going forward.
Imagine all those fuel efficient Dreamliner's working properly again and a young fuel efficient fleet and a capex hiatus for a couple of years...what to do with all that free cash flow ? Looking forward to having a far more meaningful stake when the storm has passed. I'm with Poet, too risky to have a big stake at this point.

[winner69]

This article mentions ETOPS might go down to 60 minutes for some planes

So stopping the engines working too hard is one cure ....bloody resonance. Too technical for me

https://leehamnews.com/2018/04/27/32-boeing-787s-are-aog-due-to-rolls-royce-trent-issues-number-will-climb/

[Beagle]

All the affected engines won’t be completely made over until 2022, but the interim actions, such as the surgical strikes and software proposal, are geared toward restoring the fleet to unrestricted service.

Oh dear oh dear...this is just as bad as your mother in law moving into your home for an indefinite period :eek2:

[BlackPeter]

Oh dear oh dear...this is just as bad as your mother in law moving into your home for an indefinite period :eek2:

I would rather live with my mother in law in our home than sitting next to a disintegrating Trent 1000 up in the sky :p

[Raz]

Oh dear oh dear...this is just as bad as your mother in law moving into your home for an indefinite period :eek2:

Its hard to get you head around this one isn't it. I do believe most Air NZ customers are sticky and not that sophisticated..unless burned by a bad experience will not alter their buying behaviour...it would take a major engine failure with consequences and the resulting negative PR to change demand. Just the duration of disruption makes you wonder about the hassle factor although the use of dry leases this time should avoid the hi-cXXp problems of the wet lease recent experience..

[Beagle]

Its hard to get you head around this one isn't it. I do believe most Air NZ customers are sticky and not that sophisticated..unless burned by a bad experience will not alter their buying behaviour...it would take a major engine failure with consequences and the resulting negative PR to change demand. Just the duration of disruption makes you wonder about the hassle factor although the use of dry leases this time should avoid the hi-cXXp problems of the wet lease recent experience..

Really hard. I agree with you 100% but I think this engine issue is very sticky too and I can't really figure how they get through this long fiasco without some meaningful collateral damage either to profitability or reputation or more likely both ?
On the other hand, demand is probably pretty inelastic and an article in the print edition of the Herald today said domestic fares increased last year by ~ 5% and more increases this year and international business class up even more. Then you have quality airlines like Emirates selling their soul and reducing business class seat width to a really pathetic 18.5 inches width, less than Singapore's economy sized seat, same width as AIR so called premium economy, (which is nothing more than what economy used to be before they started sardine canning people into their new "Dream"liner seats). AIR's pathetic sized business class seats actually starting to look not too bad in this new sardine can environment we're supposed to accept as normal. Maybe they can get through this thing if they really nail RR for every last bit of compensation their overworked computers can conger up ? The risk I don't like is we've seen what can happen when a fan blade breaks loose with the recent incident in America partially sucking that woman out of the plane and killing her and that could have happened and still could with AIR's planes :eek2:
One incident like that with engines that have a known weakness and AIR's reputation is in the toilet for a very long time and RR's with it, (if RR's rep isn't already).

[Brain]

I would rather live with my mother in law in our home than sitting next to a disintegrating Trent 1000 up in the sky :p

I would prefer to take my chances with the engine.

[Beagle]

I would prefer to take my chances with the engine.

LOL me too.

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12041757

Problems are going to persist right through to October 26 (notified at this stage). I would think that would be the very earliest and its highly likely we'll see more schedule changes after that as the rest of the 787 fleet have their fan blades replaced. I'm still thinking this persists at least until well into 2019 and that reinstatement of 330 min's ETOPS is no certainty.
Hi Fly will be back to further tarnish AIR's reputation with their old clunkers.
Iceman will be happy though on his regular business trips to South America...putting well proven older model 777-200's on that route. Pleased for you mate.
Good luck to shareholders.

[winner69]

This is interesting - could AIR use a few of them

Demand obviously not meeting Emirates expectations ...quite a few surplus A380s ..ouch

From Twitter

Alex Macheras (@AlexInAir)
29/04/18, 7:47 PM
Latest: #UAE-based #Emirates are removing more aircraft from the fleet, and sending the passenger jets to be stored at DWC airport, due to low demand.

• This month:
11 x Boeing 777
1 x A380

• May 2018:
14 x 777s
6 x A380s

• June 2018:
11 x 777s and 3 x A380s

[steveb]

would be expensive to change the livery and do a paint job on them though

[Rep]

Summing up:
- Air New Zealand has 11 787-9 Dreamliners (they were the launch customer)
- All eleven of them have the Trent 1000 engine - however nine of those 11 have the Package C configuration that has been subject to the revised ETOPs restrictions
- The other two 787s have Trent 1000 TEN engines which are subject (well at least not yet to restricted ETOPs)

If you are wondering what ETOPs is all about.

It means Extended range Twin engine Operating Performance Standards (or also known as Engines Turn Or Passengers Swim).

Basically a long time ago, the general wisdom was that if you were in a passenger jet with a greater number of engines such as the old DC8 or the 747 with four engines then if one of the four was disabled then getting by with three over a large distance (say over water) to the next airport was feasible. Similarly, this meant that three engined aircraft like the DC10 and the Lockheed Tristar could similarly operate (on the basis they'd still have two engines if one of the three failed). But mainly it was because no-one had built a sufficiently powerful two engine turbine with enough fuel capacity to contemplate making twin engine long haul overwater flight possible.

However, 3 and 4 engine aircraft have disadvantages - drag, weight, complexity so tend to use up more fuel.

When the 767-200 ER came along in the mid 1980s, it was the first jet airliner that could practically fly long distances across oceans. However, regulators were skeptical at first and they allowed for ETOPS in 1985 as ETOPS 120 (or the twins could fly for 120 mins away from any airport enroute) with the proviso that after 1 year of trouble free ETOPS 120 flights they could apply for ETOPS 180 (or having the twin fly for 180 mins from any airport enroute).

Once ETOPS 180 became available, something like 95% of the Earth could be accessed with an ETOPS flight - particularly useful if you in Auckland boarding a long haul flight going in an easterly direction over water.

The Dreamliners had received an ETOPS 330 in 2014 but the first ETOPS flight anywhere was an Air New Zealand 777-200ER getting from AKL to Buenos Aires in 2015. Having those bigger numbers means accessing routes that you can't otherwise OR enabling the ultra long haul legs (e.g. Auckland to Chicago or Houston without a stopover).

It should be noted that the 787 does have another engine package but switching it out would be expensive and time consuming. Hopefully this doesn't end up being RB211 saga for Rolls Royce.

The Airbus A350XWB has received ETOPS370 certification.

[Raz]

This is interesting - could AIR use a few of them

Demand obviously not meeting Emirates expectations ...quite a few surplus A380s ..ouch

From Twitter

Alex Macheras (@AlexInAir)
29/04/18, 7:47 PM
Latest: #UAE-based #Emirates are removing more aircraft from the fleet, and sending the passenger jets to be stored at DWC airport, due to low demand.

• This month:
11 x Boeing 777
1 x A380

• May 2018:
14 x 777s
6 x A380s

• June 2018:
11 x 777s and 3 x A380s

Not a demand issue more a lack of pilot issue..

"The airline is short about 100 to 150 pilots, forcing it to reduce the frequency of some routes to Florida in the United States this summer, Clark said. Chinese carriers in particular were offering extremely competitive packages for pilots."

Interesting given the Chinese airlines often have the cheapest fares...

[carrom74]

Summing up:
- Air New Zealand has 11 787-9 Dreamliners (they were the launch customer)
- All eleven of them have the Trent 1000 engine - however nine of those 11 have the Package C configuration that has been subject to the revised ETOPs restrictions
- The other two 787s have Trent 1000 TEN engines which are subject (well at least not yet to restricted ETOPs)

If you are wondering what ETOPs is all about.

It means Extended range Twin engine Operating Performance Standards (or also known as Engines Turn Or Passengers Swim).

Basically a long time ago, the general wisdom was that if you were in a passenger jet with a greater number of engines such as the old DC8 or the 747 with four engines then if one of the four was disabled then getting by with three over a large distance (say over water) to the next airport was feasible. Similarly, this meant that three engined aircraft like the DC10 and the Lockheed Tristar could similarly operate (on the basis they'd still have two engines if one of the three failed). But mainly it was because no-one had built a sufficiently powerful two engine turbine with enough fuel capacity to contemplate making twin engine long haul overwater flight possible.

However, 3 and 4 engine aircraft have disadvantages - drag, weight, complexity so tend to use up more fuel.

When the 767-200 ER came along in the mid 1980s, it was the first jet airliner that could practically fly long distances across oceans. However, regulators were skeptical at first and they allowed for ETOPS in 1985 as ETOPS 120 (or the twins could fly for 120 mins away from any airport enroute) with the proviso that after 1 year of trouble free ETOPS 120 flights they could apply for ETOPS 180 (or having the twin fly for 180 mins from any airport enroute).

Once ETOPS 180 became available, something like 95% of the Earth could be accessed with an ETOPS flight - particularly useful if you in Auckland boarding a long haul flight going in an easterly direction over water.

The Dreamliners had received an ETOPS 330 in 2014 but the first ETOPS flight anywhere was an Air New Zealand 777-200ER getting from AKL to Buenos Aires in 2015. Having those bigger numbers means accessing routes that you can't otherwise OR enabling the ultra long haul legs (e.g. Auckland to Chicago or Houston without a stopover).

It should be noted that the 787 does have another engine package but switching it out would be expensive and time consuming. Hopefully this doesn't end up being RB211 saga for Rolls Royce.

The Airbus A350XWB has received ETOPS370 certification.

Very informative post. Thank you for the insight

[Beagle]

Not a demand issue more a lack of pilot issue..

"The airline is short about 100 to 150 pilots, forcing it to reduce the frequency of some routes to Florida in the United States this summer, Clark said. Chinese carriers in particular were offering extremely competitive packages for pilots."

Interesting given the Chinese airlines often have the cheapest fares...

Makes you wonder what the Chinese are paying their cabin, ground and catering crews doesn't it ! Friends tell me the very small size of their meals is quite startling :eek2:

[Filthy]

https://www.stuff.co.nz/travel/travel-troubles/103546689/air-nz-schedule-changes-customer-concerned-passengers-arent-being-notified

[Snow Leopard]

Makes you wonder what the Chinese are paying their cabin, ground and catering crews doesn't it ! Friends tell me the very small size of their meals is quite startling :eek2:

Having not only flown with many Chinese Airlines but also breakfasted with a number of their air-crews I can confidently contradict your friends and state that they eat heartily.

Indeed, in a straight race to consume congee I am not sure that I could beat even the smallest flight attendant.

Note: Sichuan Airlines do a wickedly good spiced beef snack on their short-haul domestic flights.

[Beagle]

https://www.nzx.com/announcements/317480

On a quick skim read no mention of the engine problems or how they're planning to deal with them. Apparently that's not relevant information for a Macquarie investor presentation. Unfortunately its too early for a Tui...

[Filthy]

Unfortunately its too early for a Tui...

its never too early mate lol ;)

[777]

Interesting that 38% plus is offshore ownership.

Or put another way 79.16% of what the government doesn't own.

Share register
(as at 31 December 2017)
Retail investors 3%
International institutional investors 38%
New Zealand Government 52%
New Zealand institutional investors 7%

[Beagle]

Interesting that 38% plus is offshore ownership.

Or put another way 79.16% of what the government doesn't own.

Share register
(as at 31 December 2017)
Retail investors 3%
International institutional investors 38%
New Zealand Government 52%
New Zealand institutional investors 7%

From memory that was 4% last time they posted those stat's. Retail investors losing confidence in dodgy engines ?

[iceman]

A good summary in the Herald https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12044353

[Snow Leopard]

It was the Rolls Royce AGM today (Thursday).

Apparently everything is wonderful:

http://m.londonstockexchange.com/exchange/mobile/news/detail/13628110.html

[BlackPeter]

It was the Rolls Royce AGM today (Thursday).

Apparently everything is wonderful:

http://m.londonstockexchange.com/exchange/mobile/news/detail/13628110.html

Well - they "sincerely regret" the disruptions caused by their cock up. that's a nice gesture from them, isn't it?

On a different subject - at what stage turned the tiger into a panther to be reincarnated as leopard? As well - isn't SE Asia a bit hot for snow leopards, or did you stay in Tibet behind the big Chinese firewall?

[nizzy]

Comment from niece who flew on AIR Dreamliner from Brisbane to Auck last week for family bereavement:
outrageous $800 for a o/w way ticket & the seats were simply terrible - very narrow & could hardly fit in them, no legroom at all - she & her mother are both slight build.
Then return flight to Syd was cancelled and alternative offered was a 2 leg dogleg.
Air NZ customer service was v unhelpful when she rang asking for alternatives - they tried to charge her another $50 for changing flight !!
In her Sydney job she is a heavy booker of corporate travel and has vowed to never book her anyone on another Air NZ flight. Very poor experience.
I think AIR are struggling.
Disc: sold our AIR last month

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12044375

I haven't had the time to read the full incident report but what I find especially concerning is that there are now two separate area's of those engines that are known weaknesses. NZE sounds like it was sprayed with a fair bit of debris from the failure of the turbine blade towards the rear of the engine.
One wonders what would have happened if a fan blade had come off the front section of the engine where they're now having problems with the compressor blades ?

I have no desire to fly on one of AIR's so called dreamliners now.

[Beagle]

A good summary in the Herald https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12044353

Very good summary and makes it crystal clear that AIR will take a hit over this. Quite why the market hasn't woken up to this fact, go figure ?

[Marilyn Munroe]

In her Sydney job she is a heavy booker of corporate travel and has vowed to never book her anyone on another Air NZ flight. Very poor experience.


It is a truth universally acknowledged in the transit by enclosed airborne tube business that the one person you try very hard not to piss off is the corporate travel booker.

A fail for Cullen Airlines CRM system if it did not flag her as a very very important person. If she was flagged but not accommodated I expect the contact centre supervisor will be dragged backwards and forwards across the carpet in the sales managers office.

"Madam wishes at short notice to have a spare seat beside her for a mink coat and diamond studded handbag. Of course madam no trouble at all."

Boop boop de do
Marilyn

[Sideshow Bob]

Got notice today from Air NZ that my flight from AKL to HKG next week was delayed due to Dreamliner issues - even though it is on 1 777-200.

It goes out of Auckland at 1.35am - the local residents will be thrilled!

[Sideshow Bob]

Got notice today from Air NZ that my flight from AKL to HKG next week was delayed due to Dreamliner issues - even though it is on 1 777-200.

It goes out of Auckland at 1.35am - the local residents will be thrilled!

Just remembered to select my seats - PE just over 50% full coming back but not even 25% full heading up there!

Shareholders :eek2:

Me :t_up:

[777]

Just remembered to select my seats - PE just over 50% full coming back but not even 25% full heading up there!

Shareholders :eek2:

Me :t_up:

How can you tell. It could be that a lot of people have not selected a seat and will take what they get.

[James108]

Just remembered to select my seats - PE just over 50% full coming back but not even 25% full heading up there!

Shareholders :eek2:

Me :t_up:

doesn't it usually cost extra to select your seats? Should this read

Shareholders :t_up:

you :eek2:

[blackcap]

Got notice today from Air NZ that my flight from AKL to HKG next week was delayed due to Dreamliner issues - even though it is on 1 777-200.

It goes out of Auckland at 1.35am - the local residents will be thrilled!

Bugger, hope that's not the new timetable for the forseeable future. I leave Auckland to Hong Kong in July on that same flight..... hope they got it solved by then or its a long wait in the lounge.
Air NZ got a lot of scheduling problems, just wondering what damage it will do to their reputation long term.. (will it stop me booking them in future.. I don't know at this stage)

[pierre]

My flight to Houston Saturday week has been put back 3.5 hours - now leaves at 7:30pm instead of 4pm - no big deal. AIR was very happy to move my connecting domestic flight as well so I wont be left hanging around the airport for 6 or 7 hours till take off. We're now travelling on a 777 instead of a Dreamliner - they're doing the shorter hops in the meantime.

I think there's a great deal of emotion being expressed on here by a few STers that isn't generally being felt by the majority of travellers. Everyone knows the rescheduling is not AIR's fault and that they are doing their best to cope with a difficult situation. Of course there will be occasional cock-ups with so many people impacted but I doubt that those events or the situation in general is going to sink the airline.

My experience with the call centre was the usual polite and friendly service - with the wry comment when I said I guess you guys are under a fair bit of stress at the moment - "yes it has been a bit busier than usual".

As long as planes don't fall out of the sky (especially Flight 28 on Saturday 12 May) then it's likely to be BAU for AIR - but not necessarily for RR.

[Sideshow Bob]

Bugger, hope that's not the new timetable for the forseeable future. I leave Auckland to Hong Kong in July on that same flight..... hope they got it solved by then or its a long wait in the lounge.


It use to be a real good flight time, as got into HK early in the morning for a full day - now 8:50am so not terrible. But with some of their regional flights current timetable, will be a few beers in the lounge......

[Sideshow Bob]

https://www.stuff.co.nz/business/industries/103640569/air-new-zealands-dreamliner-disruptions-presents-strong-case-for-compensation-experts-say

[Beagle]

Oil now an additional headwind to deal with.

[couta1]

Oil now an additional headwind to deal with. Coupled with Taxcinda, not a good combo.

[Beagle]

Coupled with Taxcinda, not a good combo.

Obama ripped off AIR for a cool half a million as well. https://www.msn.com/en-nz/news/world/comment-obama-ripped-off-air-nz-with-dollar500k-fee/ar-AAwUyh4?li=AAaeXZz&ocid=spartandhp

Agree 100%, the current political environment is most unhelpful.

[winner69]

Obama ripped off AIR for a cool half a million as well. https://www.msn.com/en-nz/news/world/comment-obama-ripped-off-air-nz-with-dollar500k-fee/ar-AAwUyh4?li=AAaeXZz&ocid=spartandhp

Agree 100%, the current political environment is most unhelpful.

Extract - I am amazed that Air New Zealand hasn't got more flak for dropping so much cash on Barack Obama ....


But jeez it stroked a few egos eh ....betcha Chris (and others) was on a high for a few days afterwards ....at least took dodgy planes off his mind for a few days.

[Beagle]

Extract - I am amazed that Air New Zealand hasn't got more flak for dropping so much cash on Barack Obama ....


But jeez it stroked a few egos eh ....betcha Chris (and others) was on a high for a few days afterwards ....at least took dodgy planes off his mind for a few days.

No doubt Johnny enjoyed catching up with his mate for a couple of rounds of golf, helicoptered around everywhere and wined and dined all at shareholders expense. Ain't life grand...for those at the top...
What value did AIR get from Obama's visit ? Another great question to bleat (like a lamb lost from its mother) about at the next AGM.

[Raz]

No doubt Johnny enjoyed catching up with his mate for a couple of rounds of golf, helicoptered around everywhere and wined and dined all at shareholders expense. Ain't life grand...for those at the top...
What value did AIR get from Obama's visit ? Another great question to bleat (like a lamb lost from its mother) about at the next AGM.

Thanks for the link.

It is with no checks and balances...simply reflects the attitude of the board room. I never get over the psychology of how intelligent and astute people so often are totally enamoured by the well known.

ps as an aside.. is it trendy to pick on male white people in business who are by definition must all be stale..every opportunity you get now in NZ media?

[dobby41]

Obama ripped off AIR for a cool half a million as well. https://www.msn.com/en-nz/news/world/comment-obama-ripped-off-air-nz-with-dollar500k-fee/ar-AAwUyh4?li=AAaeXZz&ocid=spartandhp

Agree 100%, the current political environment is most unhelpful.
And you thought JK would be good for the board - I suspect he just cost them $500k.

[RTM]

And you thought JK would be good for the board - I suspect he just cost them $500k.
Do you recall what JT used to call Willie Jackson?

[Beagle]

And you thought JK would be good for the board - I suspect he just cost them $500k.

The jury is still out on that one and will be for quite a while. Maybe with his contacts overseas he can help the airline grow, (when they eventually have a fleet that's all working properly).

[mikeybycrikey]

And you thought JK would be good for the board - I suspect he just cost them $500k.

And that $500k was just the cost for Obama to be here, wasn't it? On top of that there is the venue and the food and wine and Sam Neill and Peter Gordon and everything else.

On the whole I'm not that fussed about it. Who are they marketing to? Were they trying to sell NZ to the world by bringing Obama here? Or promoting Air NZ to rich NZers by inviting them to hear Obama speak? I'm pretty sure AIR knew what they were doing. Being headline news for several days probably helps too.

And I think AIR NZ got good value for money because weren't there three companies that brought Obama here but can anyone remember who they were? I'm pretty sure Westpac was one. Can't remember the third company though.

[Raz]

And that $500k was just the cost for Obama to be here, wasn't it? On top of that there is the venue and the food and wine and Sam Neill and Peter Gordon and everything else.

On the whole I'm not that fussed about it. Who are they marketing to? Were they trying to sell NZ to the world by bringing Obama here? Or promoting Air NZ to rich NZers by inviting them to hear Obama speak? I'm pretty sure AIR knew what they were doing. Being headline news for several days probably helps too.

And I think AIR NZ got good value for money because weren't there three companies that brought Obama here but can anyone remember who they were? I'm pretty sure Westpac was one. Can't remember the third company though.


"Or promoting Air NZ to rich NZers by inviting them to hear Obama speak?" Most likely the market business case..they keep in contact with stuff like this, naturally on a smaller scale, all the time..build positive brand enhancement towards AIR.

[sb9]

Adding more capacity domestically...

Air NZannounces additional services between Dunedin and Auckland
http://www.voxy.co.nz/business/5/310164

[couta1]

The jury is still out on that one and will be for quite a while. Maybe with his contacts overseas he can help the airline grow, (when they eventually have a fleet that's all working properly). Hopefully, because he did stuff all for the US during his time in power.

[Robomo]

Hopefully, because he did stuff all for the US during his time in power.

A bit unfair Couta. A lot of the time he was fighting a hostile Republican-majority Congress who were intent on stopping just about anything he proposed. Trump is also finding out that Congress does not necessarily agree with everything he wants to do.

[Beagle]

Adding more capacity domestically...

Air NZannounces additional services between Dunedin and Auckland
http://www.voxy.co.nz/business/5/310164

Been told this is well worth a visit. https://www.larnachcastle.co.nz/
Might take the grandkids down there this summer, (A320's still going okay last time I checked)

[Marilyn Munroe]

Adding more capacity domestically...

Air NZannounces additional services between Dunedin and Auckland
http://www.voxy.co.nz/business/5/310164

The primary reason Cullen Airlines is doing this is to suck walk-on freight from Virgin(Under Arm Bowlers Division) DUD --> BNE services.

Boop boop de do
Marilyn

[Sideshow Bob]

The primary reason Cullen Airlines is doing this is to suck walk-on freight from Virgin(Under Arm Bowlers Division) DUD --> BNE services.

Boop boop de do
Marilyn

Extra flights depart Dunedin at 6.00am, and new returns are later - to broadly mirror Virgins DUD departures and arrivals. But also for all those commuting to AKL for work (in the past red-eye went via Welly, and didn't get in until around 9am)

https://www.odt.co.nz/news/dunedin/extra-auckland-flights-great-dunedin

[Filthy]

chris selling up $300k....

https://www.nzx.com/announcements/317803

[BlackPeter]

chris selling up $300k....

https://www.nzx.com/announcements/317803

He probably just needs a new deck ...

[peat]

I got rather a confused signal from Air NZ during the course of my flight from Brisbane to AKL.
They officially advised me by email my low-ball offer for upgrade was not accepted.
And then they upgraded me (and charged the low offer).

I really enjoyed the slightly higher quality service - as I am always a real stinge with air tickets - much preferring to save funds for the destination. So they may have just tempted me to do it in the future.

But that process strikes me as less than ideal. Did I not read the fine print?

[winner69]

Oil could go to us$150 a barrel

https://www.smh.com.au/business/the-economy/prices-could-double-trump-s-oil-gamble-comes-at-just-the-wrong-time-20180510-p4zeek.html

Just as well fuel costs and yield are inextricably linked

[Beagle]

Oil could go to us$150 a barrel

https://www.smh.com.au/business/the-economy/prices-could-double-trump-s-oil-gamble-comes-at-just-the-wrong-time-20180510-p4zeek.html

Just as well fuel costs and yield are inextricably linked

LOL..within reasonable parameters. The problem if we see oil prices go that high is that the depths of the recession Labour are mismanaging us into will be even worse and then even wealthy retired folks will be keener to have fish and chips at their local beach rather than some exotic international destination.

As oil heads higher AIR with their so called dreamliners will be in a great position to take maximum advantage...if they can ever getting them running right again.

[winner69]

Air New Zealand are increasing all domestic fares by 5% from next Thursday.

Needs the government to intervene I reckon ....whoops they own half the airline ...one reason why governments shouldn’t own airlines (when they essentially a monopoly)

[Beagle]

Got a link to that news article about price increase mate ? Suppose its inevitable with fuel costs going up.

[winner69]

Travel agent told me

Also said that at the rate jet fuel is going up it’s only a matter of time before one airline blinks and brings back the fuel surcharge ...somebody has to be first cab of the rank

[Onion]

my low-ball offer for upgrade

How low was your low-ball offer? I'm looking at a flight and the lowest I can offer is $350pp!

[peat]

How low was your low-ball offer? I'm looking at a flight and the lowest I can offer is $350pp!
a mere hundy.

[Beagle]

Possibly all or more than what its worth for an upgrade for a quick one way trip back from Brisbane I would have thought.

[peat]

Possibly all or more than what its worth for an upgrade for a quick one way trip back from Brisbane I would have thought.

It actually was worth it to me as it helped ensure I caught the domestic connection - I'd timed it a bit close and that quick exit out was quite useful.
For them it was worth it because I am quite likely to do that again now - at least some of the time.

I must say what a pleasure it was to fly with a very professional Air Chatham. They've stepped up to the mark servicing Whanganui and no doubt will be looking at further opportunities that AIR leave open.

[Beagle]

Must say I am surprised by AIR's SP given all the issues they're having including the headwind of higher oil prices looming large for FY19.
Resilient that's for sure. Hope no more fan blades come off and do something even worse than spraying the aircraft with shrapnel. We wouldn't want any passengers sucked out of broken windows or something even worse. We can trust RR 100% that their inspections of cracked and corroded blades and the front and rear of those engines are free of any commercial bias that might otherwise add to their damages costs right ?
Hmmmm. These issues didn't even rate a mention by Chris Luxon at the Macquarie's Australian institutional investor day, quite obviously not relevant...or are they ?

[Baa_Baa]

Like winner69 said, investors shrugged it off last time and SP pretty solid recovery from recent dips suggests the same this time. The puny 4% of retail holders are not enough to sway the SP, assuming they acted at all to the news, when insto's who represent the balance of liquidity obviously aren't concerned! Recent MA supports and bounce (with golden cross) setup a short term trade still in play.

[IAK]

It actually was worth it to me as it helped ensure I caught the domestic connection - I'd timed it a bit close and that quick exit out was quite useful.
For them it was worth it because I am quite likely to do that again now - at least some of the time.

I must say what a pleasure it was to fly with a very professional Air Chatham. They've stepped up to the mark servicing Whanganui and no doubt will be looking at further opportunities that AIR leave open.

Flew to the Chatham Islands last year (on the Convair 580 I think) and couldn't believe the size (and comfort) of the seats compared to today's modern aircraft. Cabin crew were relaxed with a great sense of humour, made for a very memorable flight. Unfortunately, on the return trip, we got fogged in on the Chatham's and then missed the AirNZ connecting flight back to Rotorua. Pissed me off as the flight was still boardng and I had to wait for 6 hours for the next flight in which time my hapuka and blue cod fillets went off lol.

Disc. Holding

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12051041

Airlines getting more creative with what they refer too as business class with Emirates recently introducing business class seats that are just 18.5 inches wide which is less than what economy was about 7 years ago. Meanwhile Singapore airlines still has economy seats with a 19 inch width which makes Emirates new "business class" seats Claytons business class. Hopefully AIR learn a thing or two from Emirates mistake although with their recent trends with seating I wouldn't hold my breath.

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12051041

Airlines getting more creative with what they refer too as business class with Emirates recently introducing business class seats that are just 18.5 inches wide which is less than what economy was about 7 years ago. Meanwhile Singapore airlines still has economy seats with a 19 inch width which makes Emirates new "business class" seats Claytons business class. Hopefully AIR learn a thing or two from Emirates mistake although with their recent trends with seating I wouldn't hold my breath.

Putting wifi in some of their 777s for all to use

Cost $40 to use for the whole trip ....irrespective of duration

One of the highest charges of the airlines that have wifi

Good eh ...thinking of shareholders

[Beagle]

Putting wifi in some of their 777s for all to use

Cost $40 to use for the whole trip ....irrespective of duration

One of the highest charges of the airlines that have wifi

Good eh ...thinking of shareholders

Pretty cunning. People are addicted to the internet, of course I'm not lol

[Baa_Baa]

Putting wifi in some of their 777s for all to use

Cost $40 to use for the whole trip ....irrespective of duration

One of the highest charges of the airlines that have wifi

Good eh ...thinking of shareholders

Ridiculous isn't it, like hotels who thought they could charge a premium on room wifi when fairly quickly they realise it's a commodity that the punters expect for free ... or they pick a hotel that has free wifi or is in cooee of the Spark phone box and get their gB of wifi free.

Bet they didn't give a thought to shareholders making this decision, it's just a cynical margin on top of their back-haul & satellite costs. For how many years were we not even able to turn on our devices on the airplanes in case it buggered the flight control systems (and presumably crashed the plane)? Now it's suddenly OK and costs can be covered with a decent margin to the bottom line. Get real!

Crap like this, you'd think they might see through the eyes of the traveller, but no, maybe there's a few desperate enough connected travellers that are prepared to pay equivalent of 1/2 to 2/3 of a monthly hi-speed broadband fee just for one flight. Good luck on sustaining that!

I'd give it 6-12 months max before wifi is free on AIR. Like it should be.

[pierre]

Flew on AIR to Houston a couple of days ago and never saw a single Spark phonebox for the entire flight. Mind you a large part of the trip was at night.

[upside_umop]

Must say I am surprised by AIR's SP given all the issues they're having including the headwind of higher oil prices looming large for FY19.
Resilient that's for sure. Hope no more fan blades come off and do something even worse than spraying the aircraft with shrapnel. We wouldn't want any passengers sucked out of broken windows or something even worse. We can trust RR 100% that their inspections of cracked and corroded blades and the front and rear of those engines are free of any commercial bias that might otherwise add to their damages costs right ?
Hmmmm. These issues didn't even rate a mention by Chris Luxon at the Macquarie's Australian institutional investor day, quite obviously not relevant...or are they ?

I suspect AIR is holding up ok with their hedging strategy and the forward oil curve being in steep backwardation. I.e. the market doesn't believe high oil prices will remain.

If oil remains higher for longer, then AIR will suffer through higher costs and generally lower economic activity (from oil strangling the economy). It's a double whammy and for airlines, it's never worked out well.

I'm still surprised Warren invested in the US airlines to be honest.

[Beagle]

Brent now up over U.S.$78 at its highest since November 2014. AIR's policy on hedging only gives them limited time to adjust their business model.
Customers should expect higher airfares in the months ahead.

[upside_umop]

Brent now up over U.S.$78 at its highest since November 2014. AIR's policy on hedging only gives them limited time to adjust their business model.
Customers should expect higher airfares in the months ahead.

Just checked their hedging position as at 28 February 2018. They don't hedge as much as I thought they would have:

- 70% hedged Jan-Jun 2018
- 35% hedged from Jul-Dec 2018

https://p-airnz.com/cms/assets/PDFs/fuel-hedge-disclosure-14feb2018.pdf

Agree that you would expect significant increases in the airfares in the months ahead if oil prices don't reduce to the forward prices currently projected by the market.

[sb9]

Air New Zealand fares going up by 5 per cent on domestic routes from Thursdayhttps://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12051728

[winner69]

Got a link to that news article about price increase mate ? Suppose its inevitable with fuel costs going up.

Travel agent told me but here’s a link anyway

Only took NZHerald a week to get up to speed


https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12051728

[Beagle]

Travel agent told me but here’s a link anyway

Only took NZHerald a week to get up to speed


https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12051728

Yeap had to happen. Some guy on here a while back reckons fuel prices and air fares are inextricably linked :)
International airfares next and then fuel surcharges after that. Might put off some tourists and lead to slightly less intense overcrowding at Queenstown which wouldn't be a bad thing at all ! When your mate Jascinda imposes new fuel levies, (levy increase is not a new tax, yeah right) it'll cost about $2.50 per litre so extra costs to get to the airport and of course the airports are putting up car parking charges on such a regular basis it seems they go up every time I fly.
The cost for a little jaunt around the country is going through the roof ! (better hope SUM have their annual meeting in Auckland again next year)

[BlackPeter]

Yeap had to happen. Some guy on here a while back reckons fuel prices and air fares are inextricably linked :)
International airfares next and then fuel surcharges after that. Might put off some tourists and lead to slightly less intense overcrowding at Queenstown which wouldn't be a bad thing at all !

Add to that

a tourist tax from our new gummit,
reduced immigration (i.e. nobody who wants to work for the tourists anymore),
increasing hostility of natives against tourist drivers (conveniently ignoring all the home-bread idiots on our roads who only get slapped with wet bus tickets if they kill their fellow road users ...)
an increasing number of environmental calamities and
ah yes, and there are still some tourists who don't realize yet that the "clean and green" in our slogans refers to the (chlorinated) tap water ...


I am sure the tourists will learn and we will solve the tourism problem ;); I guess, really - who wants to make money?

Problem is just that it is not so easy to turn the tap on again after we closed it ...

[Snow Leopard]

These things happen occasionally:

https://youtu.be/PF7nTpAj44Y

[winner69]

Steve Biddle (@stevebiddle)
16/05/18, 8:51 AM
Singapore Airlines 777-200ER 9V-SVL will be joining the @FlyAirNZ fleet in a few weeks as ZK-OKI while the airline deals with the Dreamliner issues. Will be crewed by NZ crews.

[Benny1]

Steve Biddle (@stevebiddle)
16/05/18, 8:51 AM
Singapore Airlines 777-200ER 9V-SVL will be joining the @FlyAirNZ fleet in a few weeks as ZK-OKI while the airline deals with the Dreamliner issues. Will be crewed by NZ crews.

Should be Ex- Singapore Airlines...Aircraft now owned by Boeing..was a trade-in on a new aircraft apparently.

[Raz]

Travel agent told me but here’s a link anyway

Only took NZHerald a week to get up to speed


https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12051728

and then air has a domestic sale the day before the so called price increases, usual sale price to main cities and Queenstown however the sale prices are ten percent up on last years timed sale, still able to get between the four places from and within around 50$ each way from Christchurch. So you book what you need for the next four months and wonder why Shane jones doesn’t have them on for their price strategies like the public on the oil companies with fuel prices...prices go up however if you book with us ahead and on our so called sales then you get closer to our real commercial retail prices...

[Raz]

Add to that

a tourist tax from our new gummit,
reduced immigration (i.e. nobody who wants to work for the tourists anymore),
increasing hostility of natives against tourist drivers (conveniently ignoring all the home-bread idiots on our roads who only get slapped with wet bus tickets if they kill their fellow road users ...)
an increasing number of environmental calamities and
ah yes, and there are still some tourists who don't realize yet that the "clean and green" in our slogans refers to the (chlorinated) tap water ...
Bo

I am sure the tourists will learn and we will solve the tourism problem ;); I guess, really - who wants to make money?

Problem is just that it is not so easy to turn the tap on again after we closed it ...
haha that bubble of yours clearly does not extend to witnessing the dangers of driving South Island roads with theses tourists 😂🤗

[BlackPeter]

haha that bubble of yours clearly does not extend to witnessing the dangers of driving South Island roads with theses tourists ����

Clearly not the right thread to discuss the dangers of South Island roads or otherwise (and if you have an answer, we probably should create a separate thread). However - based on my personal experiences - I've seen many more dangerous driving natives on SI roads than tourists (but I agree - this is no statistically relevant sample). Do you have hard data to prove the opposite?

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12051933

I hope Shane Jones is so vigorous in his praise or AIR's expansion as he was vigilante in his approach last time AIR changed their domestic network.
Oh..No hang on a minute...very few of his target market supporters live in Wanaka so we can probably expect another barrage about social inequity in the area's AIR serves and how morally wrong it is that AIR adapt their business model to actually meet demand...I can "hardly wait"

[Zaphod]

Shane's career started too late - his beliefs are more at home in the 1970's and very early 1980's.

[Sideshow Bob]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12051933

I hope Shane Jones is so vigorous in his praise or AIR's expansion as he was vigilante in his approach last time AIR changed their domestic network.
Oh..No hang on a minute...very few of his target market supporters live in Wanaka so we can probably expect another barrage about social inequity in the area's AIR serves and how morally wrong it is that AIR adapt their business model to actually meet demand...I can "hardly wait"

hahaha - I for one aren't in Shane's target market!

Wanaka airport has been leased to Queenstown Airport - 75% local council and 25% Auckland airport.

Growth around here has been silly, so more numbers to support a service. A decent number of people working remotely these days and flying out of Qtown, with good service to AKL but not so good anywhere else. But they need to act now to take pressure off Qtown given predicted future growth, and also issues with night flights.

Understand would need to strengthen runway (?) if went to ATR's etc. But Qtown Airport already owns a couple of tracts of land close to the airport bought a couple of years ago.

In the past, given price, timing and destinations, it wasn't so well supported. Many locals still went over to Qtown, as still much cheaper.

Would work with te right schedule, pricing and aircraft.

[Baa_Baa]

Shane's career started too late - his beliefs are more at home in the 1970's and very early 1980's.

It's an uncomfortable dichotomy, whether the government as majority shareholder enjoy leveraging shrewd business and consequent financial returns to the Crown, or compromise that by leveraging controlling interest for the wider betterment of society that diminishes investor returns in servitude of social conscience.

Must be a terrible job to have, but no pity from me. Still it's a difficult time for investor confidence with these socialist influences backed by the ultimate authority of majority investor, and law maker.

[Jantar]

...
Wanaka airport has been leased to Queenstown Airport - 75% local council and 25% Auckland airport. ..... Geographically, Wanaka is a much better site for a large airport than Queenstown. Less affected by low cloud, and a much safer approach from any direction. It also has the advantage that the runway can be lengthened, with only a slight realignment, to take some of the more modern wide bodied aircraft.

[stoploss]

Geographically, Wanaka is a much better site for a large airport than Queenstown. Less affected by low cloud, and a much safer approach from any direction. It also has the advantage that the runway can be lengthened, with only a slight realignment, to take some of the more modern wide bodied aircraft.
Much safer from the West ?

[Jantar]

Much safer from the West ? Very much so. The prevailing wind is from the North west and the valley is sufficiently wide for large aircraft to let down and turn onto finals over Tarras. If there is a southerly wind then aircraft approaching from the northwest have all of lake Hawea to let down over and give them an unobstructed run in of more than 50 km. less turbulence as well.

I have landed at both airfields many times, although more at Wanaka than Queenstown when I am the pilot.

[Beagle]

I think Wanaka has huge potential. Its probably already overrun by tourists but not to the overwhelming extent that Queenstown is. I suspect a LOT of Kiwi's would be very happy to use this as this gateway to the South and avoid some of the intense crowding at Queenstown.

[777]

The biggest problem last time AIR operated Wanaka was the differential in the price of tickets between Wanaka and Queenstown. You could pay for a taxi fare from Wanaka to Queenstown and still pay less than departing from Wanaka. A larger aircraft will make a difference in pricing but it remains to be seen how this plays out.

[Beagle]

A pilot told me there's very little price difference between operating an ATR600 with 68 seats and a little Beechcraft 19 seater. No wonder AIR so keen to ditch those little planes. Wanaka probably has the critical mass now to warrant its own ATR service ex Chch. Doubt there will be a single congratulatory remark from Shane Jones, (plenty of wealthy Europeans in Wanaka, (hardly the demographic he's trying to make political capital from is it).

[Sideshow Bob]

Most of Queenstown (domestic) traffic/capacity is AKL - ZQN. Today for instance, there is 7 x A320's from Auckland, 2 x A320 from Welly, and 4 flights from Chch, 1 x jet and 3 x ATR's.

So the capacity into Queenstown is not great from Chch. Say maybe about 400 seats per day.

[Raz]

Most of Queenstown (domestic) traffic/capacity is AKL - ZQN. Today for instance, there is 7 x A320's from Auckland, 2 x A320 from Welly, and 4 flights from Chch, 1 x jet and 3 x ATR's.

So the capacity into Queenstown is not great from Chch. Say maybe about 400 seats per day.

capacity ex Christchurch , demand is flakey as the price point means if the A320 flights are at silly price point easier to drive down and also if iffy weather in winter you would only rely on the A320 flights rather than the ATRs so more options than Auckland, also on Em and Singapore airline direct into chch so is a way smaller hub than Auckland.

[Beagle]

https://www.msn.com/en-nz/news/national/pilots-poor-communication-caused-panic-during-aborted-landings/ar-AAxB3s9?ocid=spartandhp

Pleased I wasn't on that flight !

[winner69]

Jeez - they upgraded Bombardiers since I last flew in one

[777]

The media and aircraft recognition is not one of their strong points.

[winner69]

The media and aircraft recognition is not one of their strong points.

Yep a planes a plane eh and probably only good fortune they got one with the right livery

[dobby41]

Yep a planes a plane eh and probably only good fortune they got one with the right livery

They did say it was a A320 in the picture - maybe they feel they look nicer than the Q300.

[winner69]

The world is such a sad place ...specially for Koru punters

https://www.nzherald.co.nz/travel/news/article.cfm?c_id=7&objectid=12055746

[Leftfield]

Not exactly happy news for holders?

https://www.newsroom.co.nz/2018/05/22/110802/air-nz-risks-a-hit-as-oil-price-booms-analysts

[Beagle]

Not exactly happy news for holders?

https://www.newsroom.co.nz/2018/05/22/110802/air-nz-risks-a-hit-as-oil-price-booms-analysts


The stock is rated an average ‘hold’ based on six analyst recommendations compiled by Reuters, with a median target price of $3.14.


Yet the current price is circa $3.38. Hmmmm

[upside_umop]

Interesting comments coming out from Ryanair when announcing their results. Also interesting to see they have hedged 90% of their FY2019 fuel.

https://www.bloomberg.com/news/articles/2018-05-21/ryanair-predicts-profit-decline-this-year-as-labor-costs-jump

[Rep]

The world is such a sad place ...specially for Koru punters

https://www.nzherald.co.nz/travel/news/article.cfm?c_id=7&objectid=12055746

The author admits she actually wasn't entitled to access the Air New Zealand Lounge except as a guest of someone else - she's entitled to an opinion but she seems disenfranchised by her millenial sense of entitlement for a serene experience and exclusivity.

As a parent of young children, the access to the lounge for the family actually drives me toward loyalty for Air New Zealand for our overseas family holidays as opposed to other carriers and believe me I spend more time in the Auckland Lounge than I'd like.

[Marilyn Munroe]

The world is such a sad place ...specially for Koru punters

https://www.nzherald.co.nz/travel/news/article.cfm?c_id=7&objectid=12055746

I have posted this already but it worth repeating.

I have an acquaintance who does a lot of air travel. He regards airline lounges as overcrowded bun fights. He reckons up market restaurants or bars in the terminal are a less crowded better experience.

Boop boop de do
Marilyn

PS For those interested in corporate travel manager Serko he has some very uncomplimentary things to say about corporate travel policies corporate travel software and the gibbering baboons from corporate personnel who run it all.

[Raz]

The author admits she actually wasn't entitled to access the Air New Zealand Lounge except as a guest of someone else - she's entitled to an opinion but she seems disenfranchised by her millenial sense of entitlement for a serene experience and exclusivity.

As a parent of young children, the access to the lounge for the family actually drives me toward loyalty for Air New Zealand for our overseas family holidays as opposed to other carriers and believe me I spend more time in the Auckland Lounge than I'd like.

Koru lounges are over crowded compared with 3-5 years ago, the experience has fundamentally changed. It may work for you with young children however most people in the lounges are MPs, officials of the public service, sports teams and business people...so you would be in the minority when I have ever visited.

Other options certain have become more popular and available over the past couple of years and now hardly use koru lounges..

[gbogo]

FNZC research on AIR today says 28% increase in crude oil in NZD terms and lack of forward hedging in 2019 gives them target price of $2.98, down from $3.00 and UNDERPEFORM (was NEUTRAL).

[sb9]

Out of this for now, good returns over last two years incl that juicy special divvy in 2016 plus decent capital gain.

[Raz]

Out of this for now, good returns over last two years incl that juicy special divvy in 2016 plus decent capital gain.

Out also, expect the fuel and hedge sound bites should knock it down during the year...buying in at a lower level, the opportunity will come ...

[Beagle]

Koru lounges are over crowded compared with 3-5 years ago, the experience has fundamentally changed. It may work for you with young children however most people in the lounges are MPs, officials of the public service, sports teams and business people...so you would be in the minority when I have ever visited.

Other options certain have become more popular and available over the past couple of years and now hardly use koru lounges..

You should be on the top 100 list now mate that gives really special treatment :p


Out also, expect the fuel and hedge sound bites should knock it down during the year...buying in at a lower level, the opportunity will come ...

Likewise, headwinds building and are now too strong.

[dreamcatcher]

Interesting................ 23/05/2018 Morningstar BUY recommendation

Good volume recently maybe NZ retail shrinking ?

[Filthy]

Interesting................ 23/05/2018 Morningstar BUY recommendation

Good volume recently maybe NZ retail shrinking ?

there is a mistake somewhere - they must mean SELL/REDUCE (the valuation they have is $2.60). Usually, the rule of thumb is you should do the opposite with these guys, but in this instance I agree with them.

I think the smart retail is exiting (or already has) and instos are propping up the SP by accumulating $3.30-$3.40. AIR can work in strange ways sometimes.

I don't think we have seen the end of the engine issues, plus there is the rising oil prices. Once the increase in oil slips past AIR's hedged position, how long before the cost of flights increase. AIR will pass-through costs and passenger numbers will dip because people will struggle to afford to go on holiday, perhaps electing to stay local instead.

[Filthy]

how long before the cost of flights increase

noting that there was a recent 5% increase already (that was well documented by the media)

[Beagle]

noting that there was a recent 5% increase already (that was well documented by the media)

Some media reports also mentioned they had looked at international pricing where longer sectors mean a higher relative fuel cost as a percentage of overall flight costs vs domestic and couldn't put prices up due to international competitive forces at work. Jetstar today with a sale in the market with some eye watering prices e.g. Auckland to Queenstown for $45 !...surely this is below cost for those prepared to book far enough ahead ?, (October - Early December). Might have to revisit my self imposed ban on travelling Jetstar at that price ! :D I know they're absolutely the pitts with their service but you're only paying for your share of the jet fuel at that price and nothing else !

[Rep]

Koru lounges are over crowded compared with 3-5 years ago, the experience has fundamentally changed. It may work for you with young children however most people in the lounges are MPs, officials of the public service, sports teams and business people...so you would be in the minority when I have ever visited.

Other options certain have become more popular and available over the past couple of years and now hardly use koru lounges..

I used another option recently when we took the family to New Caledonia which was much quieter although I paid as opposed to access to Koru where I have access due to business travel.

Yes it is full of MPs and others you mention - the eldest met the ABs on his first overseas trip and mostly it is mainly me there for business travel. But it’s no different from say a Visa GoldCard which used to mean something but now everyone has one and you get bumped up up a free Platinum one instead.

[Raz]

Some media reports also mentioned they had looked at international pricing where longer sectors mean a higher relative fuel cost as a percentage of overall flight costs vs domestic and couldn't put prices up due to international competitive forces at work. Jetstar today with a sale in the market with some eye watering prices e.g. Auckland to Queenstown for $45 !...surely this is below cost for those prepared to book far enough ahead ?, (October - Early December). Might have to revisit my self imposed ban on travelling Jetstar at that price ! :D I know they're absolutely the pitts with their service but you're only paying for your share of the jet fuel at that price and nothing else !

As mentioned earlier the specials are similar prices every year within a few dollar for early bookings, I believe they reflect normal retail. I go to Queenstown for a conference every September and never paid more than $50 for a seat down. Book last week $49, prior year $45. So that is six years in a row...

[Raz]

I used another option recently when we took the family to New Caledonia which was much quieter although I paid as opposed to access to Koru where I have access due to business travel.

Yes it is full of MPs and others you mention - the eldest met the ABs on his first overseas trip and mostly it is mainly me there for business travel. But it’s no different from say a Visa GoldCard which used to mean something but now everyone has one and you get bumped up up a free Platinum one instead.

"But it’s no different from say a Visa GoldCard which used to mean something but now everyone has one and you get bumped up up a free Platinum one instead."

The difference is that AIR does not offer tiered lounge services except for a very small group...

Star Alliance lounges are far superior, so are their main competitors to Europe. They get a free pass on Australia or US thou....

[Filthy]

there is a mistake somewhere - they must mean SELL/REDUCE (the valuation they have is $2.60).

well, they finally figured it out an updated it to reduce lol

[mikeybycrikey]

well, they finally figured it out an updated it to reduce lol

I think what happened is that one of the data providers had AIR at an SP of 0.0003 or something. Morningstar picked that up and at that price AIR clearly is a buy. Now fixed, it seems

[Beagle]

Pretty solid numbers for April operating stat's and AIR have some good forward cover on oil for the balance of FY18 and the first half of FY19 which has a present value of ~ $49m and ~ $30m respectively but the cupboard is basically bare in terms of forward cover from 1 January 2019. They'd be hoping all their fuel efficient 787's are fixed by then, (but I doubt it).
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/318567/279987.pdf

[dreamcatcher]

GOLLY GOSH! COULD/MUST BE POSITIVE FOR AIR ??

ENERGY: Oil futures resumed tumbling after taking their worst losses in months on Friday, battered by reports that OPEC countries and Russia could start pumping more oil soon. Benchmark U.S. crude tumbled $1.99 a barrel to $65.92 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $2.83 to settle at $67.88 on Friday. Trading in Brent crude, used to price international oils, was suspended for a holiday in Britain. Oil producing countries cut output at the start of 2017 following a big supply buildup and agreed last year to extend those cuts through the end of 2018, but according to reports last week, they might agree to start raising production in June.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12060182

[Beagle]

Speaking of fuel costs its interesting that AIR are taking legal action over the ruptured pipeline.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12057826

[Hectorplains]

Speaking of fuel costs its interesting that AIR are taking legal action over the ruptured pipeline.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12057826

Interesting? Commercially prudent - there's a strong case here for AIR. Are you holding AIR, Roger?

[Beagle]

Interesting? Commercially prudent - there's a strong case here for AIR. Are you holding AIR, Roger?

I find it commercially interesting in that I would have thought the parties would have already held detailed discussions and seeing as BP "strongly denies" and is defending the claim and Z is also defending the claim that the fuel companies would have the best handle on the specific fine detail of their fuel supply contract as that's all they do.

I find it difficult to imagine their isn't some "Force Majeure" or "Act of God" supply interruption clause in their agreement and find it difficult to imagine how AIR propose to sheet home some allegedly negligent digger operator's actions on a aging pipeline owned by N.Z. refining onto a legal claim against the fuel companies ?

What are we talking about here ?, perhaps $1m+ in costs hiring a top commercial QC and if they lose they'll potentially cop substantial costs from the other parties. Maybe its just a tactic to get the fuel companies to the negotiating table ?

I made an uncharacteristic mistake when selling recent in the high 330's and left myself with a very small parcel which I'm keeping just because I like aviation as an industry. I'll be back to holding a far more meaningful stake when the headwinds subside.

[Baa_Baa]

I made an uncharacteristic mistake when selling recent in the high 330's

Don't beat yourself up, selling higher than it is now is not a mistake, especially for predominantly an investor who hasn't missed a dividend and has avoided capital losses. Nimble traders might have re-entered for a modest capital upside from around $3 but even then, that was a gamble, and it's small beer gains and has gone sideways for 11-12 weeks and could go anywhere from here.

jmho
BAA

[peat]

its a crazy situation re liability, and depends of course on all sorts of contracts we are not privvy to...
but it could go back to the insurers of the pipeline so perhaps AIR's broker should talk to NZR's broker, and each one of them can put good pressure on the assessor both directly and via an expensive claim preparer - who will of course be paid for by the insurer. Then of course there is thrashing out any ambiguities in the precise wording, and all costs and savings having to be identified and supported. Niggles and snags all to be worked through. The handler then may need to get confirmation of intention from the underwriter. Rinse and repeat a few times before settlement can be agreed. It takes time and a few more people clip the ticket.

[Beagle]

There's a surprise, (NOT) https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12061099

[clarky]

AIR seems to be taking a hiding today so far... seems someone knows something.

[couta1]

Oh dear :eek2:

[Beagle]

Oh dear :eek2:

Market starting to wake up to what I've been saying for a while now. Outlook for FY19 not all that bright with some clearly defined headwinds.
Reckon you might be right about that $2.50 you had as their target price quite some time ago. Right on the money, just got the timing a bit wrong eh mate :)

[dreamcatcher]

GS latest ....................We are Neutral-rated on AIR.NZ with a TP of NZ$3.22

[Benny1]

NZ6232 currently returning to AKL airport at the moment... NZE proving flight before re-entering service

[Beagle]

NZ6232 currently returning to AKL airport at the moment... NZE proving flight before re-entering service

Someone must have been hard at work fixing that bird up :)

[winner69]

Someone must have been hard at work fixing that bird up :)

Yep it did a round trip down Gisborne way and arrived back safely

[couta1]

Oh dear :eek2: I have to laugh at myself here, this is the only stock I saw any value in so ended up buying at $3.13, as for the others like SPK, yeah nah, MSCI index was a fizzer.

[Raz]

I have to laugh at myself here, this is the only stock I saw any value in so ended up buying at $3.13, as for the others like SPK, yeah nah, MSCI index was a fizzer.

Can see AIR dropping below that...

[couta1]

Can see AIR dropping below that... Of course it can but all depends on how long you hold it for doesn't it.

[Bobdn]

I have to laugh at myself here, this is the only stock I saw any value in so ended up buying at $3.13, as for the others like SPK, yeah nah, MSCI index was a fizzer.

Early days but nice work so far!

[Joshuatree]

a renewed cooperation announcement between AIR and Qantas a little later this arvo may be a fillip.

[Joshuatree]

Code sharing on 115 domestic routes in Aus /NZ using one of the others airlines to complete their journey in one 2nd journey.Includes cargo and ground services etc. 3rd attempt at this codesharing successful. source NZR National

[Beagle]

http://www.scoop.co.nz/stories/BU1806/S00020/qantas-and-air-nz-announce-codeshare-deal.htm

Virgin must be gutted. Good on AIR partnering with a proper airline to make travel easier.

[Joshuatree]

Bit slow on it today with your beloved AIR Rog but more info in your link. All good, although a minor announcement for AIR ,a positive one.

[Leftfield]

http://www.scoop.co.nz/stories/BU1806/S00020/qantas-and-air-nz-announce-codeshare-deal.htm

Virgin must be gutted. Good on AIR partnering with a proper airline to make travel easier.

Last time I flew AIR and Virgin the Virgin connection was cancelled at the last moment, meaning a 5hr wait till their next flight. I would never fly Virgin again. This move is the right one IMO.

[peat]

Isnt code-sharing just brand dilution?

Surely if you value your brand you wouldnt degrade it by letting other companies deal with your clients.
Obviously theres some big economic value to be gained but wouldnt a well capitalised business expand it services rather than fob off its customers to a (supposedly ) inferior service.

[Raz]

Isnt code-sharing just brand dilution?

Surely if you value your brand you wouldnt degrade it by letting other companies deal with your clients.
Obviously theres some big economic value to be gained but wouldnt a well capitalised business expand it services rather than fob off its customers to a (supposedly ) inferior service.

I agree, the things is they have a short tern commodity focus to strategic planning.

[percy]

"My enemy's enemy is my friend."

[carrom74]

I have to laugh at myself here, this is the only stock I saw any value in so ended up buying at $3.13, as for the others like SPK, yeah nah, MSCI index was a fizzer.

The drop was so mouth watering for me.... I ended up selling ATM at 10.87 and ended up buying a good chunk of AIR at 3.18... when i see both today... seems to be a good decision.