AIR - Air NZ.

[winner69]

Talking of crashes somebody has produced this chart

Boeing’s 737 Max 8 has had more fatalities in its first years in service than other new aircraft model since 1966. (The other planes depicted were the other most dangerous.) @Morning_Joe

Apparently the 747 number is high because 2 of them collided on the Canary Islands. Also somebody noted the three 727s fell out of the sky before they realised they had to be landed on full throttle but that was launched pre 1966 and not shown

Whatever relative to the zillions of passengers not many killed

[dobby41]

Whatever relative to the zillions of passengers not many killed

Lol - so long as it isn't me in the 'not many' :t_up:

[winner69]

Lol - so long as it isn't me in the 'not many' :t_up:

What will come to you will come so don’t worry.

I remember flying in those DC10s I think they were - the ones with an engine on the tail - when they were falling out of the sky and there were so many people who changed their flights it made flying comfortable ....one flight HKY/AKL was so empty one had a choice of which row of seats to lie on and sleep.

[oldtech]

Whatever the reason, AIR SP is getting pushed down ... couldn't resist, I topped up at 2.34. :)

[martinchnz1]

Whatever the reason, AIR SP is getting pushed down ... couldn't resist, I topped up at 2.34. :)

Terrorist threats

[oldtech]

Terrorist threats

Sorry, I wasn't aware of that when I posted.

What has happened in Christchurch ... words fail me. What can you say?

[Beagle]

I feel profoundly sorry for all the victims and their relatives and friends and my thoughts and prayers go out to them. Such heinous acts of violence are to the best of my knowledge unprecedented in N.Z. in recent times. I am sure the whole country is in shock and disbelief.

[iceman]

Shame on Luxon and his team at AIR. Good on Robertson for calling them and giving them a talking to. What a ridiculous lapse of their senses https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12213438

[winner69]

Shame on Luxon and his team at AIR. Good on Robertson for calling them and giving them a talking to. What a ridiculous lapse of their senses https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12213438

Love Robertson quote “"Their call, and the right one." .....yeah right

Bit different from an earlier communication

@FlyAirNZ
We're saddened by the tragic events that has occurred and are trying to help those with travel over the weekend and those that are directly affected. Although we've been putting on additional capacity we have very little availability which is why the fares have increased. ^NA


That ^NA no doubt just doing his job ....failed leadership

Beagle and others should send Chris a blast with their outrage. Uber-esque pricing strategies do not apply to our ‘national carrier’

[Beagle]

Software system designed to maximise revenue needed to be overridden in these unprecedented circumstances and has been. Compassionate fares are there but not everyone knows about them. AIR could have done a better job communicating the compassionate fares available in these extraordinary circumstances.
Not making excuses for them but they probably wouldn't have been aware that demand would rise off the charts and this happened mostly on the weekend.

[winner69]

1pm - Air New Zealand says one of its long-serving engineers is among those killed.

Lilik Abdul Hamid, an aircraft maintenance engineer in Christchurch, was in the Deans Avenue Mosque at the time of the attacks.

Air New Zealand CEO Christopher Luxon says the airline is devastated to lose one of its team.

"Lilik has been a valued part of our engineering team in Christchurch for 16 years, but he first got to know the team even earlier when he worked with our aircraft engineers in a previous role overseas," said Luxon.

"The friendships he made at that time led him to apply for a role in Air New Zealand and make the move to Christchurch. His loss will be deeply felt by the team."

He leaves behind wife Nina and children Zhania and Gerin.

"I would also like to acknowledge the many, many other families, including the families of some of our other team members,who have also lost loved ones in this tragedy, and the wider Muslim and Christchurch communities," said Luxon.

[Raz]

1pm - Air New Zealand says one of its long-serving engineers is among those killed.

Lilik Abdul Hamid, an aircraft maintenance engineer in Christchurch, was in the Deans Avenue Mosque at the time of the attacks.

Air New Zealand CEO Christopher Luxon says the airline is devastated to lose one of its team.

"Lilik has been a valued part of our engineering team in Christchurch for 16 years, but he first got to know the team even earlier when he worked with our aircraft engineers in a previous role overseas," said Luxon.

"The friendships he made at that time led him to apply for a role in Air New Zealand and make the move to Christchurch. His loss will be deeply felt by the team."

He leaves behind wife Nina and children Zhania and Gerin.

"I would also like to acknowledge the many, many other families, including the families of some of our other team members,who have also lost loved ones in this tragedy, and the wider Muslim and Christchurch communities," said Luxon.

One would trust they would not use this to soften their mis-step earlier in the weekend. Well one Engineer suggested it to me however I would never be that cynical.

[Beagle]

Many people don't understand that AIR are continuously and automatically running a very sophisticated software system that is constantly looking to maximise the revenue from each and every flight.
Its not human intervention that caused the system to be seeking much higher fares it was human intervention / override that needed to be taken to take account of unprecedented circumstances.
Compassionate fares and their policy are there on their website https://www.airnewzealand.co.nz/compassionate-fares for all to find but I agree that in these circumstances they should have made concessions earlier. That said I did note on the very day of the massacre they almost immediately said anyone needing to make changes to existing travel plans could do so free of charge.
Beat up on the National airline...look frankly I think there are more important issues to talk about here https://www.sharetrader.co.nz/showthread.php?11484-The-Christchurch-Terrorist-Shootings-(15-March-2019)

[Joshuatree]

Beat them up for putting their software ahead of humanity. They need a very big serving here .

[Balance]

Beat them up for putting their software ahead of humanity. They need a very big serving here .

What about Jetstar?

Anyone know what they have been up to?

And other transport companies like coaches, ferries, taxis etc etc.

[Beagle]

Beat them up for putting their software ahead of humanity. They need a very big serving here .

Settle down JT. They set these programs up years ago and got on to overriding them as soon as it became problematic in these exceptional circumstances.

[iceman]

Settle down JT. They set these programs up years ago and got on to overriding them as soon as it became problematic in these exceptional circumstances.

"problematic" being the Finance Minister calling them to give them a serve. Sorry Beagle, we agree to disagree. AIR should have been onto this immediately. They know how their systems work and should have known immediately a human override was necessary. I don't care what Jetstar or other transport companies did, they are not owned by the NZ Government like our national carrier. You may defend it and call it a beat up on the national carrier. I suspect many disagree with you on that. I certainly do.

[iceman]

But full credit to AIR for eventually coming to the table and doing what we expect of them in circumstances like this. Credit where credit is due

[777]

Beating up the national carrier has always been a national pastime.

And the Crown only owns slightly more than half.

[horus1]

They should have droped the price without direction . Good on Robertson for doing it

[Beagle]

Beating up the national carrier has always been a national pastime.

And the Crown only owns slightly more than half.

I wonder if it has ever occurred to some people that :-
1. AIR immediately took steps on Friday afternoon to waive change of booking fees and allow people to take other flights at the original price paid
2. AIR exec's might have been very busy most of Saturday trying to find extra capacity to put on Chch routes ?
3. That AIR are still struggling to meet capacity and flight schedules due to the RR engine issue
4. Do these "experts" realise its the weekend and most executives would have been at home with their families ?
5. It might take some time to put in a software edit to change the pricing structure in the companies booking system.

Anyone can pretend they are the CEO and could do better and many often do. As you suggest, its almost a national pastime. What I find interesting and sad is those same people don't bother offering a single constructive comment on the situation itself in the appropriate thread https://www.sharetrader.co.nz/showthread.php?11484-The-Christchurch-Terrorist-Shootings-(15-March-2019)/page2

I see AIR are refunding the difference in price paid for all tickets bought between the massacre and before the capped prices were introduced, such that nobody will pay more than the capped price for any ticket purchased after this atrocity occurred. Of course I expect the cynics will say that's just a marketing stunt and they should never have charged extra in the first place...like somehow the airline can instantly change its systems for goodness sake...

I for one have complete confidence that AIR's executives have done the best job they could in extraordinary circumstances.
https://www.msn.com/en-nz/news/national/one-of-the-boys-air-nz-mourns-engineer-killed-in-christchurch/ar-BBURUbn?ocid=spartandhp
Anyone cynical enough to think this is just marketing PR is a very sad person in my opinion.

[Raz]

Love Robertson quote “"Their call, and the right one." .....yeah right

Bit different from an earlier communication

@FlyAirNZ
We're saddened by the tragic events that has occurred and are trying to help those with travel over the weekend and those that are directly affected. Although we've been putting on additional capacity we have very little availability which is why the fares have increased. ^NA


That ^NA no doubt just doing his job ....failed leadership

Beagle and others should send Chris a blast with their outrage. Uber-esque pricing strategies do not apply to our ‘national carrier’

The whole thing shows a lack of thought by all involved and also shines real transparency on Government influence..its "our" airline however that is also at the expense of the minority private shareholders, as required. It is not the first case one would be suspicious of Government direction/pressure over the past year.

The lack of capacity is the turbo prop adoption for near all regional flights from Christchurch combined with the airport set up with security arrangements that assume terrorism is not a consideration except for jets. Where assumptions can leave you.

Concerning the compassionate policy, it is stuff of urban legend how it works so unfairly in practice, day to day, talk about so many bitter people as a result of their policy. Wonder if it really works for them, longer term, trade off additional revenue vs loss of goodwill.

[peat]

. Uber-esque pricing strategies do not apply to our ‘national carrier’

Why not? Shouldnt they? Airlines are one big uber and demand is their profit - I wouldve thought.
Of course not in an event like this but normally, as a shareholder , wouldnt you say bring it on (pricing based on demand)
After all when the plane takes off an empty seat is worth 0 so why not the other way round

[RTFQ]

Current management have been riding the wave of momentum generated by the previous, whom invested heavily in their staff. The wave has broken and current management are caught cavitating in the white water, hence the continued slide in share price.

"BRING BACK ROB" I say

[percy]

Current management have been riding the wave of momentum generated by the previous, whom invested heavily in their staff. The wave has broken and current management are caught cavitating in the white water, hence the continued slide in share price.

"BRING BACK ROB" I say

You must be joking.
Rob was a joke.

[Raz]

You must be joking.
Rob was a joke.

Those that worked there at the time they would use stronger language than that. External factors have been kind to AIR for a good period of time, although times do change.

[Benny1]

You must be joking.
Rob was a joke.

Wouldn't bring back Rob but some of his off siders did a lot for this company.
Vanessa Stoddard was a very good HR leader and gained the respect of engineering and operations when she took over that role.
Stephen Jones who was head of strategy for a long time was a class act and is very well respected in the airline world he is currently deputy CEO at Wizz Air.
Bruce Parton was the longest serving of the senior managers..he left last year.
Current crop of senior managers have a lot to prove to come even close to these guys... IMHO.... Well definitely Vanessa and Stephen.!

[777]

Those that worked there at the time they would use stronger language than that.


So wrong.....

[biker]

Wouldn't bring back Rob but some of his off siders did a lot for this company.
Vanessa Stoddard was a very good HR leader and gained the respect of engineering and operations when she took over that role.
Stephen Jones who was head of strategy for a long time was a class act and is very well respected in the airline world he is currently deputy CEO at Wizz Air.
Bruce Parton was the longest serving of the senior managers..he left last year.
Current crop of senior managers have a lot to prove to come even close to these guys... IMHO.... Well definitely Vanessa and Stephen.!

You need to delve a little deeper into Vanessa Stodard’s legacy with Air NZ.
You may find it quite contradictory to what you have posted.

[777]

You need to delve a little deeper into Vanessa Stodard’s legacy with Air NZ.
You may find it quite contradictory to what you have posted.

So true...

[Joshuatree]

Lion Air crash: Voice recording shows pilots scouring manual to fix fatal dive (https://www.stuff.co.nz/travel/news/111443393/lion-air-crash-voice-recording-shows-pilots-scouring-manual-to-fix-fatal-dive)

[thestg]

My best guess for a good time to buy will be 27 March at around $2.30.

Wow a new 12 month low at $2.25 and still on a downward trend.Wonder where it will stop this time?

[Beagle]

break down of the 2.50 area looks like just under $2 again at some time

Bull's been calling it right just lately. Then its hammer time !

[King1212]

It will be sub down $2 before it pull back....just like sep 2016...I think...

[dreamcatcher]

IMO Undervalued and Oversold

GS TP NZ$2.74

[RTFQ]

Wow a new 12 month low at $2.25 and still on a downward trend.Wonder where it will stop this time?
I am picking the bottom around $1.50. They have over capacity hence the recent fare dump to get bums on seats. I believe another profit down grade is imminent.

[winner69]

I am picking the bottom around $1.50. They have over capacity hence the recent fare dump to get bums on seats. I believe another profit down grade is imminent.

Hey RTFQ - is it Romeo Tango Foxtrot Quebec or a case of you not reading the f#*#ing question

That $1.50 sounds a bit low ...maybe $1.80

[Beagle]

I am picking the bottom around $1.50. They have over capacity hence the recent fare dump to get bums on seats. I believe another profit down grade is imminent.

Load factors are running about 1% ahead of last year. They saw some softness with local spend in their forward booking system and are looking to stimulate domestic leisure travel. Oil has been higher than their forecast but I think the market is already fully cognisant of that and its already in the price.
Your target price looks miles out of whack to me and I note average analyst target price is $2.58. https://www.marketscreener.com/AIR-NEW-ZEALAND-LIMITED-6491407/consensus/

[Raz]

Load factors are running about 1% ahead of last year. They saw some softness with local spend in their forward booking system and are looking to stimulate domestic leisure travel. Oil has been higher than their forecast but I think the market is already fully cognisant of that and its already in the price.
Your target price looks miles out of whack to me and I note average analyst target price is $2.58. https://www.marketscreener.com/AIR-NEW-ZEALAND-LIMITED-6491407/consensus/

Fair value by my estimates is 2.10, could it shoot to the down side, well yes, say 20-30 cents max, need some really bad news to to get anywhere near $1.50

[JohnnyTheHorse]

AirNZ doing east coast of Australia to USA from AU$729. Two things here:

1. Must be big overcapacity on those routes. They are just trying to fill planes

2. AirNZ is screwing Kiwis.

[King1212]

I am picking the bottom around $1.50. They have over capacity hence the recent fare dump to get bums on seats. I believe another profit down grade is imminent.

You might be right bum on seats..but i don't think it would be $1.50 otherwise it will be BBBA ...beagle busy buying again!:D But I think it will go sub $2 before it goes up again...

[Beagle]

Fair value by my estimates is 2.10, could it shoot to the down side, well yes, say 20-30 cents max, need some really bad news to to get anywhere near $1.50

Happy to buy all day at that price. A lot of bearish / negative sentiment on here lately. I think the average analyst call of $2.58 is about right.

[CD_CHCH]

Sub $2.00 would be a fantastic price to buy in at. I can't imagine it getting that low but if it does I'd certainly be buying a few.

[oldtech]

Sub $2.00 would be a fantastic price to buy in at. I can't imagine it getting that low but if it does I'd certainly be buying a few.

October 2016, I was buying at $1.795, so not exactly unprecedented. :)

[CD_CHCH]

You are a smarter and wiser individual than I - back then I was pretty much just starting out in the market and didn't give AirNZ a second look. Hindsight being a wonderful thing I now see the error of my way....

[Beagle]

October 2016, I was buying at $1.795, so not exactly unprecedented. :)

Yeap I got some on board at just under $2...anything around that level or even slightly above is tremendous value.
I have a good sized allocation already but the prospect of a bargain basement price again would be too tempting to resist.
The problem with waiting until under $2 is it might not get there and one misses the great opportunity that already exists. The way I see it, (barring some major exogenous shock) the trading range is $2.00 - $3.60 so we're already in the lowest quartile of that range and the shares are already very good value in my opinion.
$2.00 - $2.40 to me is the real BUY zone, if it temporarily goes under $2, its HAMMER TIME !!!

[oldtech]

You are a smarter and wiser individual than I - back then I was pretty much just starting out in the market and didn't give AirNZ a second look. Hindsight being a wonderful thing I now see the error of my way....

I wouldn't necessarily say that, I was chasing it down from $3.035 in April! Topped up at various points on the downhill slalom course. :eek2:

Averaging down worked well for me that time - I sold half at $2.34 and the rest at $3.17 - but your mileage may vary.

[Baa_Baa]

The chart says a bottom might be in, but with the DOW shedding 460 points on their Friday, one might expect a rethink on Monday our time. I can't see anything fundamental that says the rout is over for AIR, so best maybe to keep an eye on sentiment and play it as it unfolds. Patience. Easy to say, hard to do.

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12215405

[winner69]

As Air New Zealand’s profits slump to a five year low it would not surprise me to see the share price slumping to a five year low

Seems a rationale thought

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/332423/297314.pdf

Operating stat's look solid. Also nice to see them organising a charity music event for the hard working firefighting teams at Nelson recently with Broods coming back down-under. A very nice touch.

[Timesurfer]

Seems a rationale thought

No place for such thought in the wonderful world of stock market investment it seems.

[Beagle]

No place for such thought in the wonderful world of stock market investment it seems.

Market is always a forward looking beast and is thinking about FY20 when their RR engine issues will be mostly behind them.

[Raz]

Happy to buy all day at that price. A lot of bearish / negative sentiment on here lately. I think the average analyst call of $2.58 is about right.

I would be to, too much QE around for it to go that low without bad news.

[winner69]

Market is always a forward looking beast and is thinking about FY20 when their RR engine issues will be mostly behind them.

These days the market always being a forward looking beast seems to be a bit of a myth

[Beagle]

These days the market always being a forward looking beast seems to be a bit of a myth

I think its the half truth's, being extremely economical with the facts and deliberate concealment by some companies that's the real issue.
Proven performers on attractive metrics who's management and directors one can trust and respect because they've earned it over the long haul are not exactly in prolific abundance on the NZX...

Anyway so much for AIR's hole in forward bookings. Tried buying some tickets to get down and attend SUM's annual meeting in Wellington on 30 April and was blown out of the water with the SUM of money required. Might have to take it as read that SUM directors and management are doing a very good job.

[winner69]

AIR apparently going to announce outcome of their cost saving exercise and network review

Can only be good for the shareprice as zillions of dollars in savings announced

Might not be their worst year (profit wise) since 2013 after all

[Beagle]

Thanks to the hard working team at AIR. My nice big juicy divvy arrived in my account today.

[bull....]

there updated strategy is a reflection of the low growth world we are now entering

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/332590/297516.pdf

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/332590/297515.pdf

No comment from me at this stage as I haven't read them yet.

[oldtech]

2019 earnings before tax expected to be $340-$400 million, which is unchanged from the 2019 Interim Result announcement last month ago

[Beagle]

Good solid common sense review realigning the business to a lower growth environment. Capex deferral looks good to me and I note capex for FY20, FY21 and FY22 is smoothed out and at least $200m per annum less than annual depreciation. I expect gearing to come down significantly over this period and I remain hopeful of a special divvy, but this probably won't be until FY22.

In the meantime this review significantly enhances their ability to pay ongoing annual dividends at the current level.
Gross yield at $2.41 is (22/0.72) / 241 = 12.7%

Good to see that the recently commenced Chicago route has already grown to the point where they are putting on extra capacity from later this year and a new route to Seoul as well as more capacity to Teipei gives encouragement. Good to see guidance reaffirmed once more.

I think those holding off hoping to get back in under $2 are going to be very disappointed and I'm going to call it, (barring some major exogenous shock) the bottom on this cycle has already been put in. As usual I will listen into the conference call and share any further thoughts after that.

I retain 100% confidence in the management and board and believe they are doing a very good job in what have been very challenging conditions over the last year or so. Happy to buy even more on any irrational further weakness. I would expect to see $2.50 by close of business tomorrow if not sooner but time will tell.

[oldtech]

I do wonder what the market reaction will be to lower growth figures - they are planning for network growth of 3% to 5%, on average, over the next three years, revised down from 5% to 7% to reflect slower growth.

[Beagle]

Many other business can only dream of 3-5% annual growth in this economy. PE is only ~8 and I think we are talking bottom of the cycle stuff here and that's the PE that normally applies at the top of the cycle !
http://www.sharechat.co.nz/article/9dbcb52a/air-nz-to-defer-750-mln-of-capex-to-help-weather-slowing-demand.html?utm_medium=email&utm_campaign=Air%20NZ%20to%20defer%20750%20mln%20o f%20capex%20to%20help%20weather%20slowing%20demand&utm_content=Air%20NZ%20to%20defer%20750%20mln%20of %20capex%20to%20help%20weather%20slowing%20demand+ CID_e24ec7f8b5fdd1b5fb29bd6e1f5b7221&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle9dbcb52aair-nz-to-defer-750-mln-of-capex-to-help-weather-slowing-demandhtml

[oldtech]

Certainly Mr Market is happy, up 8.5 cents already.

[Beagle]

I'm not surprised and as posted earlier expected to see $2.50. Its good to see them concentrate on capex and cost efficiency and I think a focus in this area is overdue.
Pleasing to see two wide bodied aircraft (really capex expensive) deferred for ~ 5 years and overhead targeted cost reduction of ~ 5%.
Also good to see a 2 year program of looking for operational cost efficiencies. All this is very good strong bean counting stuff and confirms to me that the board and management are doing a very good job of managing what is a very complex business.

$2.23 was the low and anyone who bought there or thereabouts was as cunning as a hungry Beagle :)

[Blue Skies]

With bank deposits diminishing even further, Air NZ with it's v high yielding dividends, will attract a lot of money chasing income & rightly so in mho. Just a few of the reasons -
It's one of the best in it's industry in the world, due to NZ's unique geographical position we are always going to be absolutely dependent on a healthy thriving national airline (the tourism industry/govt would never allow us to be solely at the beck and call of foreign carriers, it would be unacceptable risky for tourism & a large dependent sector of the economy ), as a major shareholder the govt needs continuing juicy dividends, the major shareholder NZ Govt also just happens to control the policy levers if needed, it's still making around $1M profit per day & a PE of 8. I wish a few of my other shares could claim some of these criteria.

[madmat]

I'm not surprised and as posted earlier expected to see $2.50. Its good to see them concentrate on capex and cost efficiency and I think a focus in this area is overdue.
Pleasing to see two wide bodied aircraft (really capex expensive) deferred for ~ 5 years and overhead targeted cost reduction of ~ 5%.
Also good to see a 2 year program of looking for operational cost efficiencies. All this is very good strong bean counting stuff and confirms to me that the board and management are doing a very good job of managing what is a very complex business.

$2.23 was the low and anyone who bought there or thereabouts was as cunning as a hungry Beagle :)

I got in a little early before the low at $2.34

[winner69]

Wonder how much ‘influence’ the majority shareholder in these decisions seeing cash is the key

Luxon and his team a bit slow of the mark though .....the signs of market growth slowing were there a couple of years ago and they didn’t react. A couple of demerit points to the CEO there. A

[Beagle]

They had a 56% gearing ratio at the half year which is slightly above their targeted ideal level so it looks like good common sense pragmatic decision making to defer some capex and tune the business efficiency up for the current market conditions. Improved product offer coming recognising long haul economy is too cramped also good to see and good investment in upgraded lounges. I'm very happy with how they're running the business.
Litigating against ZEL for the fuel pipeline disruption for ~ $4m is something I wonder about the merits of but its chump change in the overall scheme of things and gives their new general counsel something to get their teeth into...(although frankly I would rather see AIR get their teeth into Rolls Royce).

[macduffy]

Better to let one of the bigger boys take on RR, Beagle? At least ZEL would be local - and a lower cost action.

[Beagle]

Impressions from the call :-
Sounds like they have been having good dialogue with RR and direct cost impact this year will be about half the previously indicated $30-40m
Indirect RR impact costs running at about $20m per annum to be largely out of the business by Q1 FY20.
Capacity growth in FY20 towards the top end of the 3-5% range.
First 777-200 replacement due in 2023.
Focus on revenue per available seat kilometer strength (RASK)
Cost reduction focus is on top of existing plans to reduce CASK (cost per available seat kilometer)
Very minimal noticeable impact to forward bookings from Chch tragedy

Free wifi from today for enabled planes is a good thing.
I think the confidence within the business is strong and they are focused on executing well in this lower growth environment.
Capex deferral underwrites their ability to pay strong and sustainable dividends and get their gearing back to very moderate level's...(music to any dividend hounds ears).
https://www.marketscreener.com/AIR-NEW-ZEALAND-LIMITED-6491407/financials/ I think we could see some modest upgrade to average analyst forecasts for FY20 and FY21 of $430m before tax.

A year is a long time in the aviation industry but I see fair value of ~ $2.75 a year from now and a gross yield of approx. 12.4% at the current share price of ~ $2.47.

[Beagle]

https://www.msn.com/en-nz/money/company-news/air-nz-cuts-network-growth-targets-costs/ar-BBVjHIE?ocid=spartandhp

[Snow Leopard]

You got to laugh at the old announcement the way they praise themselves for being the pinnacle of dynamic proactive & reactive management when half of the time they can not organise a drinking session in a Koru Lounge.

[winner69]

You got to laugh at the old announcement the way they praise themselves for being the pinnacle of dynamic proactive & reactive management when half of the time they can not organise a drinking session in a Koru Lounge.

Big egos eh Snowy ... but Chris’s halo is shining less brightly these days as AIRs earnings this year head to about the half of that of a few years ago ....headline won’t say ‘Worst year for a while but still a strong performance’

Talking of Koru lounges the Wellington domestic one is in temporary premises .....still have the barista but the rich and famous now need to join the hoi polloi in the public toilets ....shocking state off affairs

[winner69]

Thought I better read the AIR update to see what the fuss is all about ...in case I reinvest

So $60m extra savings sometime ...like pissing in the ocean ....and one of those immeasurable things that gives comfort management doing something

Focus on CASK and RASK .....OMG (not an aviation term) isn’t that what they are meant to be doing every single day as part of their job.

Putting off upgrading the fleet ...hmm ....just deferring the inevitable as the average age creeps higher

Improved economy class experience .....pigs might fly (sorry planes fly and pigs don’t)

Oh well - all honky dory on the AIRfront. Chris has had his thrill for the month and loyal shareholders happy.

[winner69]

See Tourism New Zealand has suspended promoting New Zealand as a tourist destination

AIR better up their media budget and do the job for them to fill the void

Apparently lots of people interested in coming here now.

[Beagle]

Thought I better read the AIR update to see what the fuss is all about ...in case I reinvest Your superstitious beliefs colour your judgement

So $60m extra savings sometime ...like pissing in the ocean ....and one of those immeasurable things that gives comfort management doing something $60m on top of other initiatives to reduce CASK is definitely not chump change and underwrites profit growth going forward

Focus on CASK and RASK .....OMG (not an aviation term) isn’t that what they are meant to be doing every single day as part of their job.They have a good track record of steadily reducing CASK which has been impacted by the RR issue and additional costs around introducing the A320/1 NEO fleet. Downward CASK trendline will keep reducing (excl fuel)

Putting off upgrading the fleet ...hmm ....just deferring the inevitable as the average age creeps higher Their average fleet age is several years younger than the industry average which is 9.9 years according to IATA. Good pragmatic decision making to reflect a different growth environment

Improved economy class experience .....pigs might fly (sorry planes fly and pigs don’t)

Oh well - all honky dory on the AIRfront. Chris has had his thrill for the month and loyal shareholders happy.

I think you're just trying to wind the dog up by yanking his tail. YAWN.,..what shall I spend that really juice divvy I just received on ?

[stoploss]

I think you're just trying to wind the dog up by yanking his tail. YAWN.,..what shall I spend that really juice divvy I just received on ?


Maybe a new car 😂

[winner69]

Thought of you beagle when I saw this cartoon this morning

[Beagle]

Maybe a new car ��

LOL, not going there again for quite SUM time !
Thought of you beagle when I saw this cartoon this morning

Definitely not in "Dire Straights" lol...but thank you for the idea...one of my daughters "borrowed" a couple of my Dire Straights CD's and of course I've never seen them again.

[Beagle]

Just had a thought Winner. $60m in annual savings = $43m after tax. At a mid cycle PE of 10 capitalised that's worth $430m or about 38 cents per share on the share price. Pretty cool eh. Market is pretty clever and is in the process of putting that 38 cents onto the share price. Back to $3 + next year if not sooner.

[winner69]

Just had a thought Winner. $60m in annual savings = $43m after tax. At a mid cycle PE of 10 capitalised that's worth $430m or about 38 cents per share on the share price. Pretty cool eh. Market is pretty clever and is in the process of putting that 38 cents onto the share price. Back to $3 + next year if not sooner.

Market is easily conned eh Beagle

Just some nebulous number that cant be measured and if by some mircle they did it will be shown as CASK improvement anyway.

[Benny1]

Chris's replacement just been hired????

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/332699/297643.pdf

[winner69]

Analysts (including the highly respected FNZC as Beagle described them the other day) not overwhelmed with yesterdays news

What did Licoln say 'You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.'

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12217467

[winner69]

VIRGIN AUSTRALIA STRUGGLES POST BREAKUP
https://traveltalk.nz/news-opinion/virgin-australia-struggles-post-breakup/

[Beagle]

Chris's replacement just been hired????

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/332699/297643.pdf

LOL mate, their last so called big digital hire only lasted a couple of years before getting homesick.

[Beagle]

Analysts (including the highly respected FNZC as Beagle described them the other day) not overwhelmed with yesterdays news

What did Licoln say 'You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.'

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12217467

That Wade Gardiner from Craigs was a real sour puss on the call yesterday. Is he one of your mates Snow Leopard ?

[Snow Leopard]

That Wade Gardiner from Craigs was a real sour puss on the call yesterday. Is he one of your mates Snow Leopard ?

Well, unlike the gullible round here he can see the announcement for what it actually is.

A mix of what they were doing anyway and what they should have been doing anyway.

I still maintain my recommendation to only buy this flying circus at a considerable discount to fair value.

[Beagle]

You and Winner are just a sour you couldn't steal some off others at under $2. If you didn't trip over your own bias you could have had some at $2.23 and been up 13% in less than ten days :p

[Raz]

You and Winner are just a sour you couldn't steal some off others at under $2. If you didn't trip over your own bias you could have had some at $2.23 and been up 13% in less than ten days :p

The ramp losing momentum on the market and thread?:)

[Beagle]

No interest in ramping this one, holding for the long term for dividend income and looking to add more so no point in ramping is there !
Getting 12.3% yield beats counting beans for a living I tell ya !
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12217134

[Beagle]

Very robust debate about this one this week. Suppose it all depends if one sees the glass as half full or half empty or if one simply prefers drinking from plastic cups instead.
Thing is regardless of whether the glass is half full or half empty...does it really matter if you're only paying for half a glass of water and they keep adding 12%+ to it every year...

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12217553

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12217553

That’ll help RASK

[Snow Leopard]

Very robust debate about this one this week. Suppose it all depends if one sees the glass as half full or half empty or if one simply prefers drinking from plastic cups instead.
Thing is regardless of whether the glass is half full or half empty...does it really matter if you're only paying for half a glass of water and they keep adding 12%+ to it every year...

You paying for most of a glass of water and the glass leaks badly at times.

[winner69]

This article suggesting a jet service Auckland to Nelson

That’ll make Iceman happy

But A320s into Nelson ...hmm

[Raz]

That’ll help RASK

Some economy seats going for 899$ return to the US over a two month period...Can't recall it being offered in such numbers before for AIR. Forwards bookings and spare capacity....so not just premium economy offerings.

[Beagle]

You paying for most of a glass of water and the glass leaks badly at times.

Market doesn't see it through your jaundiced eyes and its up from $2.23 on 21 March to $2.53.5 just 8 days later. It'll be back to $3 sometime next year, (plus the 12%+ divvy return in the meantime) remember the dog called it first :)

[Snow Leopard]

Got an AirNZ ad offering Kuala Lumpur - Auckland return from RM2,888, which is a very good price.
It would be via Singapore and, as with any [airline] click bait, there are no clues as to which date combo would actually get that price.

Purely in the name of research, as I have no requirement to visit home yet, I tried a few combos and the cheapest price was more than twice the above figure and only once in the eight did they beat Malaysia Airlines, who have the benefit of flying direct.

As an added bonus you get redirected to the Singapore website and quoted actual fares in SG dollars and I am now being pursued by adverts for AirNZ, MalAir & others.

[Beagle]

.. and I am now being pursued by adverts for AirNZ, MalAir & others. Are they "Hounding" you :p

[Jaa]

Got an AirNZ ad offering Kuala Lumpur - Auckland return from RM2,888, which is a very good price.
It would be via Singapore and, as with any [airline] click bait, there are no clues as to which date combo would actually get that price.

Purely in the name of research, as I have no requirement to visit home yet, I tried a few combos and the cheapest price was more than twice the above figure and only once in the eight did they beat Malaysia Airlines, who have the benefit of flying direct.

As an added bonus you get redirected to the Singapore website and quoted actual fares in SG dollars and I am now being pursued by adverts for AirNZ, MalAir & others.

I had a similar "experience" with that ad, Air NZ's operation is very poor in Malaysia. I got the ad in a Malaysian state with regular Scoot (owned by Singapore Airlines) services to Singapore but no option to fly from any city in the state to NZ despite huge demand in this state for the route (lots of Malaysians study, live, visit and do business in NZ and vice versa NZers in Malaysia) and the fact that flying via Singapore is faster than flying via KL.

With Air Asia no longer flying to NZ, Malaysia Airlines losing money and the Malaysian government talking about selling it off or closing it down the opportunity clearly exists for Air NZ to fly direct to KL. Must be one of the few profitable routes left for Malaysia Airlines. Wonder if Air NZ's agreement with Singapore Airlines prevents this? Singapore Inc dislikes losing anyway to Malaysia after all!

[winner69]

A friend sent me the link to this article with the comment — Falling profits, falling ratings, will Luxon soon be a falling star? After six years as CEO it may well be time for him to move on.

I said a few times he’s not the AIRleader he once was ...too many distractions and appears to be less enthusiastic about AIR than before. When does his big retention bonus period run out?

Profits this year heading to multi year lows ...some effort


https://www.stuff.co.nz/travel/news/111731622/air-new-zealand-drops-six-places-in-tripadvisors-travellers-choice-awardsyy

[Baa_Baa]

A friend sent me the link to this article with the comment — Falling profits, falling ratings, will Luxon soon be a falling star? After six years as CEO it may well be time for him to move on.

I said a few times he’s not the AIRleader he once was ...too many distractions and appears to be less enthusiastic about AIR than before. When does his big retention bonus period run out?

Profits this year heading to multi year lows ...some effort


https://www.stuff.co.nz/travel/news/111731622/air-new-zealand-drops-six-places-in-tripadvisors-travellers-choice-awardsyy

SP is doing fine though isn't it, canny buyers are on a heap of profit already and it isn't really relevant whether the CEO has Jacinda eyes, or her smile, it's just about enjoying the extraordinary dividends and then getting out when the charade is exposed. Which seems a while away at this stage.

So all good, enjoy the ride while it lasts.

[Beagle]

I listened in to the half year call in late February 2019. One of the analysts asked Chris Luxon if he was happy and staying on and he replied in an upbeat way that he feels very fortunate to have the best job in the country. I think he's very happy. Operationally its been a very tough year but I think he enjoys the challenge and I'm pleased he's there.

I bought more at $2.47 cum divvy a little while ago, (effective price $2.36 ex divvy). Although I didn't pick the bottom it only went under $2.30 for one day so I'm not beating myself up in any way and am actually proud of myself to have the courage to back my own analysis and buy more against what at times is some fairly emphatic negativity on here.

Air New Zealand named Pacific's best airline - must be doing quite a few things right https://www.msn.com/en-nz/news/national/air-nz-named-pacifics-best-airline/ar-BBVw1lE?ocid=spartandhp

[Benny1]

Oh dear.. Looks like the Rolls Royce engine issues aren't getting any better...the newer Trent TEN engines with same problems.

https://www.straitstimes.com/singapore/transport/sia-grounds-several-boeing-787-10-jets-due-to-engine-issues

Also Jetstar has a 787-8 stuck in Japan with GE engine issues..
Both engines suffered surge issues while landing in Osaka... Will post the link to that article if I find it again...

[iceman]

This looks terrible Benny1. Boeing´s engineer´s sure are busy, with the Dreamliners and 737 MAX !!

[Benny1]

This looks terrible Benny1. Boeing´s engineer´s sure are busy, with the Dreamliners and 737 MAX !!
They certainly don't seem to build them like they used too!

https://i.stuff.co.nz/travel/news/111743027/jetstar-787-suffers-problems-with-both-engines-on-approach-to-osaka

[winner69]

This looks terrible Benny1. Boeing´s engineer´s sure are busy, with the Dreamliners and 737 MAX !!

Methinks it’s more than just Boeing’s engineers that are busy at the moment

Seems Boeing’s pursuit of excessive profits over the last decade have lead to many dodgy practices even if you only believe a few if the revelations that are coming out since the MAX crashes.

[nizzy]

the reduced AIR fares to Christchurch are over. They appear to be recovering the lost margin by charging like a wounded bull. Just had to stump up $730 Akl - Chc return for a flight 2.5 weeks away....

[Beagle]

Yes capped prices ended on 31 March 2019 but the usual compassionate fares are still available.

[iceman]

Methinks it’s more than just Boeing’s engineers that are busy at the moment

Seems Boeing’s pursuit of excessive profits over the last decade have lead to many dodgy practices even if you only believe a few if the revelations that are coming out since the MAX crashes.

Yes winner some of the stuff one reads about the problems with the MAX software and Boeing's attitude to it is a real concern. And now problems with GE engines on Jetstar's Dreamliners. Never ending this stuff !

[BlackPeter]

I listened in to the half year call in late February 2019. One of the analysts asked Chris Luxon if he was happy and staying on and he replied in an upbeat way that he feels very fortunate to have the best job in the country. I think he's very happy. Operationally its been a very tough year but I think he enjoys the challenge and I'm pleased he's there.

I bought more at $2.47 cum divvy a little while ago, (effective price $2.36 ex divvy). Although I didn't pick the bottom it only went under $2.30 for one day so I'm not beating myself up in any way and am actually proud of myself to have the courage to back my own analysis and buy more against what at times is some fairly emphatic negativity on here.

Air New Zealand named Pacific's best airline - must be doing quite a few things right https://www.msn.com/en-nz/news/national/air-nz-named-pacifics-best-airline/ar-BBVw1lE?ocid=spartandhp

Hmm - last time I checked Singapore was sitting in the Pacific as well. So how come that Singapore Airlines is according to the same survey the world's best airline and Air New Zealand the best airline in the Pacific?

I think whoever wrote the article didn't took the time to scrutinise the results. On a second look one would find out that they got first just in Oceania and parts of the South Pacific.

[Blue Skies]

Hmm - last time I checked Singapore was sitting in the Pacific as well. So how come that Singapore Airlines is according to the same survey the world's best airline and Air New Zealand the best airline in the Pacific?

I think whoever wrote the article didn't took the time to scrutinise the results. On a second look one would find out that they got first just in Oceania and parts of the South Pacific.

For the purposes of the Trip Advisors survey, Singapore Airlines falls into the Asia geographical region. Air NZ into the South Pacific and Oceania region (which without being pedantic is the Pacific region)
Worth noting Air NZ won Best Premium economy in the world, a valuable & growing part of AIR's inventory, so if you drill down into these surveys they're not quite as straightforward as they seem.

[Snow Leopard]

I think I may have to stop flying as there does not seem to be a trust-worthy pair of wings anywhere :p.

Jetstar GE probable one-off, but even more RR blade problems a worry.

3 of may next 4 flights are scheduled on 767's - we need to be bringing this old tech back :D.

[Marilyn Munroe]

I think I may have to stop flying as there does not seem to be a trust-worthy pair of wings anywhere :p.

Jetstar GE probable one-off, but even more RR blade problems a worry.

3 of may next 4 flights are scheduled on 767's - we need to be bringing this old tech back :D.

Those reliable old bangers who were destined to be converted into beer cans because of their thirsty engines may have an extended life.

Cullen Airlines should keep some of those 777-200's parked up in a hanger for contingencies.

Boop boop de do
Marilyn

[kyanar]

AirNZ doing east coast of Australia to USA from AU$729. Two things here:

1. Must be big overcapacity on those routes. They are just trying to fill planes

2. AirNZ is screwing Kiwis.

Neither. There is massive competition east coast Australia to US with American, Delta, United, Qantas, Virgin Australia all competing heavily on price to attract leisure travellers. Air NZ simply cannot charge Australians (or Americans) the prices they charge New Zealanders or there would be no passengers at all. They more than make up for it on revenue from the all-important business traveller to their key destinations, charging far and away above what other airlines can get away with (despite the hard product being about equal, NZ routinely charges up to twice what UA charges for their flagship Polaris product).

[peat]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12218916

I'm thinking this is new bad news but stand to be corrected

[biker]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12218916

I'm thinking this is new bad news but stand to be corrected

Well, don’t think you can call it new good news.

[peat]

Well, don’t think you can call it new good news.

no for sure - but it may not affect them....
but afaik the Trent TEN's were previously unscathed from issues

[kyanar]

Ok, at what point will airlines start holding Rolls Royce responsible for their clear failure in quality control? Airlines and their shareholders cannot continue to be left holding the bag because RR won't take responsibility for their incompetence.

[Beagle]

One person on here a while back alluded to the fact that some of these new version engines might be experiencing compressor blade wear.
I think they will be Bora scope checking these engines regularly forever and a day and RR will be on the hook for more costs. Good that AIR say they're unaffected.
Singapore airlines will be making a lot of cycles of shorter trips with the shorter range 787-10's.
Perhaps another challenge to be overcome.

[Beagle]

https://www.stuff.co.nz/business/industries/111767169/air-nz-pours-cold-water-on-suggestions-its-planning-new-regional-jet-services?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Thursday+4+ April+2019
ATR600's are real fuel misers and given they have 8 more of them on order I'd be very surprised if they were looking to replace them with relatively thirsty jets anytime in the foreseeable future. Merging operations however looks almost a given as they roll out there 2 year program of looking for more operational cost savings on top of the $50m per annum and the recently announced new initiatives of a further $60m per annum. If they work hard they might get to a total of $200m per annum in cost savings in total, that would be pretty cool ands represent about 18 cps in annual cost savings.

[iceman]

https://www.stuff.co.nz/business/industries/111767169/air-nz-pours-cold-water-on-suggestions-its-planning-new-regional-jet-services?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Thursday+4+ April+2019
ATR600's are real fuel misers and given they have 8 more of them on order I'd be very surprised if they were looking to replace them with relatively thirsty jets anytime in the foreseeable future. Merging operations however looks almost a given as they roll out there 2 year program of looking for more operational cost savings on top of the $50m per annum and the recently announced new initiatives of a further $60m per annum. If they work hard they might get to a total of $200m per annum in cost savings in total, that would be pretty cool ands represent about 18 cps in annual cost savings.

It never ceases to amaze me Beagle that despite a large number of ATR flights between Auckland and Nelson, they always seem to be full or near full when I fly them. Wouldn't be surprised if they squeezed the odd jet flight in there to increase capacity

[dobby41]

https://www.stuff.co.nz/business/industries/111767169/air-nz-pours-cold-water-on-suggestions-its-planning-new-regional-jet-services?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Thursday+4+ April+2019
ATR600's are real fuel misers and given they have 8 more of them on order I'd be very surprised if they were looking to replace them with relatively thirsty jets anytime in the foreseeable future. Merging operations however looks almost a given as they roll out there 2 year program of looking for more operational cost savings on top of the $50m per annum and the recently announced new initiatives of a further $60m per annum. If they work hard they might get to a total of $200m per annum in cost savings in total, that would be pretty cool ands represent about 18 cps in annual cost savings.

Yes - I think it is a case of some people getting 1+1=3

[Beagle]

It never seizes to amaze me Beagle that despite a large number of ATR flights between Auckland and Nelson, they always seem to be full or near full when I fly them. Wouldn't be surprised if they squeezed the odd jet flight in there to increase capacity

Appreciate the feedback iceman. Its certainly a great part of the country and I see real estate in the Nelson area is still going gangbusters.

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12219364
I hope they dump RR and go with GE engines.

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12219364
I hope they dump RR and go with GE engines.

Probably should dump Boeing as well as go with Airbus

[Beagle]

Probably should dump Boeing as well as go with Airbus
Those A350's have a very scary asking price. Might just pay to keep the old 777-200's going for another 5 years or so. Heck when they deferred $750m of capex the SP has gone up 25 cents since then so by simple extrapolation if they deferred 8 x say $250m aircraft ($2B) the share price would go up by another 67 cents per share lol

[Benny1]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12219364
I hope they dump RR and go with GE engines.

Most compensation paid out by Rolls Royce will come in the form of discounts on future orders.
That's just the way it works in the aviation industry.
So unless GE offers an extremely good deal themselves the chances of going with them would be extremely slim.
More 787's With R&R engines would be my guess... Hope I'm wrong.. Not a particular fan of 787's but there again I'm not much of a plane nerd ...been around too many in my working life!

[Beagle]

That's what concerns me Benny1. RR might discount the price heaps in the circumstances but what does it cost the airline in the long run ? If RR can't get the compressor blades in the new ten version to be highly durable what's the point of the company effectively buying itself more problems down the track ?

[Benny1]

That's what concerns me Benny1. RR might discount the price heaps in the circumstances but what does it cost the airline in the long run ? If RR can't get the compressor blades in the new ten version to be highly durable what's the point of the company effectively buying itself more problems down the track ?

Probably nothing stopping them buying more problems down the track..however it always comes down to who is doing the best deal at the time.
Can't see them getting A350's as this will come with significant training requirements for crew e.t.c and the 777-X is yet to enter service so who knows what sort of potential costly issues will come with this aircraft.:eek2:

[dobby41]

Probably nothing stopping them buying more problems down the track..however it always comes down to who is doing the best deal at the time.

I'm sure they look at total cost of ownership rather than just the 'price' at the time.

[iceman]

Those A350's have a very scary asking price. Might just pay to keep the old 777-200's going for another 5 years or so. Heck when they deferred $750m of capex the SP has gone up 25 cents since then so by simple extrapolation if they deferred 8 x say $250m aircraft ($2B) the share price would go up by another 67 cents per share lol

Here is hoping Beagle. I'd be very happy to continue travelling on these reliable & safe workhorses on my travels

[Beagle]

Here is hoping Beagle. I'd be very happy to continue travelling on these reliable & safe workhorses on my travels

Keeping them for longer would give Benny1 and his colleagues heaps more work so that's good.

[Benny1]

Keeping them for longer would give Benny1 and his colleagues heaps more work so that's good.

Truth be known....the 787's provide a fair bit themselves! Way more than they ever forecast..
Wouldn't mind them keeping the 777-200 for longer I think they are a much better suited aircraft for Air NZ.
To really get the range they want out of the 787's they need to further reduce the seat count and cargo payload will be restricted .
They work well I suppose on most Asian flights and short haul international but still lack the MTOW Required for USA flights without payload restrictions.

[Beagle]

Truth be known....the 787's provide a fair bit themselves! Way more than they ever forecast..
Wouldn't mind them keeping the 777-200 for longer I think they are a much better suited aircraft for Air NZ.
To really get the range they want out of the 787's they need to further reduce the seat count and cargo payload will be restricted .
They work well I suppose on most Asian flights and short haul international but still lack the MTOW Required for USA flights without payload restrictions.
That carbon fibre really "easy" to work with isn't it :cool:

[RTM]

https://www.tripadvisor.com.au//TravelersChoice-Airlines-a_Mode.expanded

[winner69]

I think the article is reasonably fair to Air NZ

https://www.stuff.co.nz/business/107455477/the-worlds-least-unsustainable-airline-air-new-zealands-climate-dilemma

Like this comment - Air NZ employs a panel of sustainability advisors to give a running commentary on how more environmentally unsustainable the airline is becoming. As long as the shareholders are happy its OK

Betcha not many shareholders read the Air asustainability Report
https://p-airnz.com/cms/assets/PDFs/2018-Sustainability-Report.pdf

Their Advisory Panel has pretty famous people on it

https://www.airnewzealand.com/sustainability-advisory-panel

[Beagle]

Thanks for the link mate. On a quick 30 second look the 21.4% increase in fuel efficiency in the last decade since 2009 is a notable headline and with an airline that burns ~ 1,000,000,000 liters of jet fuel a year, probably the only headline that really makes any real differecne. The rest of it is probably feel good stuff for the Greenies and possibly a good cure if I find myself suffering from insomnia at some stage again. 1 billion / 0.786 = 1.27 billion

70,000 litres of fuel saved per annum with electric cars is neither here nor there. This is though that if the fuel efficiency of the airline by choosing modern fuel efficient aircraft hadn't of improved by 21.4% they'd be burning something like 1.27 billion liters per annum so although shareholders and at times passengers lament the drama's of these fuel efficient Dreamliners they are a big part of the companies strategy to save about 270,000,000 liters of fuel per annum and no matter how you slice and dice it that's a very BIG number.

[Beagle]

Impressions from the call :-
Sounds like they have been having good dialogue with RR and direct cost impact this year will be about half the previously indicated $30-40m
Indirect RR impact costs running at about $20m per annum to be largely out of the business by Q1 FY20.
Capacity growth in FY20 towards the top end of the 3-5% range.
First 777-200 replacement due in 2023.
Focus on revenue per available seat kilometer strength (RASK)
Cost reduction focus is on top of existing plans to reduce CASK (cost per available seat kilometer)
Very minimal noticeable impact to forward bookings from Chch tragedy

Free wifi from today for enabled planes is a good thing.
I think the confidence within the business is strong and they are focused on executing well in this lower growth environment.
Capex deferral underwrites their ability to pay strong and sustainable dividends and get their gearing back to very moderate level's...(music to any dividend hounds ears).
https://www.marketscreener.com/AIR-NEW-ZEALAND-LIMITED-6491407/financials/ I think we could see some modest upgrade to average analyst forecasts for FY20 and FY21 of $430m before tax.

A year is a long time in the aviation industry but I see fair value of ~ $2.75 a year from now and a gross yield of approx. 12.4% at the current share price of ~ $2.47.

Posted just 12 days ago against a barrage of negativism calling it under $2. Got the timing of the recovery a "little" wrong but I am not complaining lol

[allfromacell]

Well called Beagle, I'm surprised the SP is still going up even though oil is at five month highs.

[winner69]

Well called Beagle, I'm surprised the SP is still going up even though oil is at five month highs.

Is what happens when you gave a slick preso with nice big numbers (rather nebulous one’s at that).

Market loves companies that save their way to respectability

Share price might be 3 bucks by Easter

[iceman]

Voted Australia's favourite company once again. LOL https://www.stuff.co.nz/business/innovation/112089093/air-nz-voted-australias-favourite-company-for-third-year-running

[winner69]

So AIR hiring expensive outside consultants
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12224620


Remember somebody posting this last year on another thread - “Hiring outside consultants a while back to tell them how to run their business was a free warning sign for shareholders that management have lost their way”

With fuel going up and now this warning sign maybe time to be cautious

[Beagle]

Yes, could be. From the other forum
In the last few weeks since management updated towards the end of March we have seen :-
1.Oil continue to march quite a bit higher, plus this further significant jump over the weekend
2. Rolls Royce engine problems on the Trent 1000 engine being announced on their latter version of that engine which could affect AIR beyond the currently understood period with earlier versions of that engine
3. The share price climb materially from about $2.40 before the last management briefing
I wouldn't have thought 3 goes with 1 and 2. Shares have reached my fair value assumption (exclusive of the first two factors mentioned above)

I have taken the appropriate portfolio action and still have a modest stake for yield.

[percy]

Trust you are left with fantastic high yielding "free ones."

[Beagle]

LOL yeah, can you help ? I'm not sure how to work out the yield on the ones left :)

[percy]

I always start at 100% and work upwards.?..lol.

[winner69]

LOL yeah, can you help ? I'm not sure how to work out the yield on the ones left :)

Agree ....impossible when the average cost is negative eh

[Patient Panda]

Had my first long haul flight with AirNZ to Shanghai the other day. The food was better than average but beside that there was almost nothing differentiating the flight from the next flight 5 hours later with KLM. Both in 777’s, both almost entirely staffed with chinese staff. Both flights had no empty seats, clearly no issues with demand.

in future when going to europe I will be prioritising Singapore airlines with the included 1 night stop over and tourist pass as the price is more or less the same and Changi airport is far better. I will be actively avoiding chinese airports in the future.

[peat]

I wouldn't have thought 3 goes with 1 and 2.

Yes true, so the fact they did tells us of quite strong demand , so at this point I wouldn't be surprised if they go even higher.

[Beagle]

Yes true, so the fact they did tells us of quite strong demand , so at this point I wouldn't be surprised if they go even higher.

Could do mate but I also think the currency is not especially helpful at this level. I think the ongoing problems with RR engines could be materially more ongoing than I previously hoped so I am more cautious. Also their favourable fuel hedge position doesn't run all that far into FY20. I think its just a hold at this level for yield as part of a very well diversified portfolio.

[Jantar]

...

in future when going to europe I will be prioritising Singapore airlines with the included 1 night stop over and tourist pass as the price is more or less the same and Changi airport is far better. I will be actively avoiding chinese airports in the future. My two experiences with Shanghai were not good either. For future trips to Europe it will either be via USA or Singapore. Never again through China.

[dobby41]

My two experiences with Shanghai were not good either. For future trips to Europe it will either be via USA or Singapore. Never again through China.

Stop over in Shanghai - a great place to visit.

[Marilyn Munroe]

Stop over in Shanghai - a great place to visit.

Someone on the internet told me air traffic control in China is handled by the military. The ATC system suffers from a lack of primary focus from the generals and is overwhelmed by the growth in flights. They also play favorites with Chinese carriers over clearances. Thus delays for flights over China and unfovourable routing.

The capitalist running dogs and counter-revolutionaries in Taiwan perform better.

Boop boop de do
Marilyn

[kiwico]

Stop over in Shanghai - a great place to visit.

I had no issue with a stopover at Shanghai heading home either but I've never seen such a empty airport. The local version of the Koru Lounge was bit strange though and well hidden.

[Snow Leopard]

You guys got go through Changi, Singapore with a good length stopover so you can enjoy the newest bit of the airport: The Jewel (http://www.changiairport.com/en/discover/jewel.html).

As another Snow Leopard top tip. Don't buy Rakyat chocolate at Nur-Sultan (Kazakhstan) airport. Buy at a local supermarket before going to the airport: less than half the price.

[stoploss]

You guys got go through Changi, Singapore with a good length stopover so you can enjoy the newest bit of the airport: The Jewel (http://www.changiairport.com/en/discover/jewel.html).

As another Snow Leopard top tip. Don't buy Rakyat chocolate at Nur-Sultan (Kazakhstan) airport. Buy at a local supermarket before going to the airport: less than half the price.
I think that top tip probably holds true for any product in any city supermarket vs airport !!!!

[dobby41]

I think that top tip probably holds true for any product in any city supermarket vs airport !!!!

That's what I was thinking.
The amount of expensive Toblerone sold at airports is amazing.

[Beagle]

That's what I was thinking.
The amount of expensive Toblerone sold at airports is amazing.

Chocolate and coffee addiction is much like any other addiction, difficult to break.

[winner69]

This could be good for AIR ...the Southern Link ....China tonSouth America

https://nzchinacouncil.org.nz/2019/04/register-now-building-the-southern-link-conference/

[winner69]

Revenue growth still slowing by the looks of it

RASK a bit of a problem even allowing for the $5m be nice to Chch people

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/333828/298988.pdf

[BlackPeter]

Revenue growth still slowing by the looks of it

RASK a bit of a problem even allowing for the $5m be nice to Chch people

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/333828/298988.pdf

Well, yes - local RASK slightly down, however available seat kilometers strong up. Might just indicate that they use now larger (more economic) planes on regional routes ...

[Beagle]

Nothing to concern me in those figures. Happy holder with a modest stake, holding for yield.

[winner69]

FX having a favourable impact on AIRs revenues

[dreamcatcher]

Probably helped - Commentary from Air New Zealand via CAPA (Center for Asia Pacific Aviation):

Strong increase in air bookings for April reported by chief marketing and customer officer Mike Tod. AIR.NZ experienced an increase in bookings due to the overlap of school holidays, Easter & Anzac Day. This included a c.+16%/+6% yoy increase in domestic/international bookings for the four days of Easter.

[Beagle]

http://www.scoop.co.nz/stories/BU1905/S00059/air-nz-contribute-1-million-to-native-forestry-offset.htm?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Friday+3+Ma y+2019

[Beagle]

Bit of a laugh. I used to fly balsa wood model planes as a kid but this is definitely next level ! https://www.stuff.co.nz/travel/112464015/miniature-air-new-zealand-dreamlinerss-maiden-flight

[QOH]

Bit of a laugh. I used to fly balsa wood model planes as a kid but this is definitely next level ! https://www.stuff.co.nz/travel/112464015/miniature-air-new-zealand-dreamlinerss-maiden-flight
That was brilliant, best thing Ive seen online today

[winner69]

WOW ....servicing China has been expensive

http://www.sharechat.co.nz/article/52430bd7/air-nz-s-long-hard-100m-flightpath-to-china.html?utm_medium=email&utm_campaign=Air%20NZs%20long%20hard%20100M%20flig htpath%20to%20China&utm_content=Air%20NZs%20long%20hard%20100M%20fligh tpath%20to%20China+CID_d3da00ce6a69896a4cd9ce076ab 0d697&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle52430bd7air-nz-s-long-hard-100m-flightpath-to-chinahtml

[iceman]

WOW ....servicing China has been expensive

http://www.sharechat.co.nz/article/52430bd7/air-nz-s-long-hard-100m-flightpath-to-china.html?utm_medium=email&utm_campaign=Air%20NZs%20long%20hard%20100M%20flig htpath%20to%20China&utm_content=Air%20NZs%20long%20hard%20100M%20fligh tpath%20to%20China+CID_d3da00ce6a69896a4cd9ce076ab 0d697&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle52430bd7air-nz-s-long-hard-100m-flightpath-to-chinahtml

The company I work for has looked a couple of times at the options of flying Chinese workers between Argentina and China via NZ with AIR. It has never been a real option due to stopover times to some degree but more due to the difficult transit visa requirements for Chinese passport holders in NZ, particularly if you may need to change dates as we often do. Until those requirements are made easier and smoother, Luxton's dream of making Auckland a hub between China and South America will never happen.
So they continue to fly via Europe on longer flights with equally long stopever at times. Crazy really.

[winner69]

The company I work for has looked a couple of times at the options of flying Chinese workers between Argentina and China via NZ with AIR. It has never been a real option due to stopover times to some degree but more due to the difficult transit visa requirements for Chinese passport holders in NZ, particularly if you may need to change dates as we often do. Until those requirements are made easier and smoother, Luxton's dream of making Auckland a hub between China and South America will never happen.
So they continue to fly via Europe on longer flights with equally long stopever at times. Crazy really.


Isn't the market sending a signal that this isn't business worth doing?


At some significant cost to shareholders ...and of course taxpayers.

[iceman]

Isn't the market sending a signal that this isn't business worth doing?


At some significant cost to shareholders ...and of course taxpayers.

If your question relates to NZ being a hub between SE Asia and South America, then I disagree. I think it is potentially a big and profitable business for AIR but the regulatory frameworks with slots and competition in China and visa requirements in NZ make it impossible.

[777]

Isn't the market sending a signal that this isn't business worth doing?


At some significant cost to shareholders ...and of course taxpayers.

What about the revenue they get on the domestic flying the tourists do.

Maybe the loss per annum is a reducing one.

[stoploss]

What about the revenue they get on the domestic flying the tourists do.

Maybe the loss per annum is a reducing one.

They pretty much get that anyway doesn't matter who they get here with ... Air NZ or whoever .......

[winner69]

If your question relates to NZ being a hub between SE Asia and South America, then I disagree. I think it is potentially a big and profitable business for AIR but the regulatory frameworks with slots and competition in China and visa requirements in NZ make it impossible.

That wasn’t the question but agree if AIR can wangle that Southern Link as part of that Belt and Road thing it could be huge for them.

Maybe that’s why they still hang in there ...hoping

[Beagle]

That wasn’t the question but agree if AIR can wangle that Southern Link as part of that Belt and Road thing it could be huge for them.

Maybe that’s why they still hang in there ...hoping

Chris Luxon assured investors in the most recent call all routes were currently profitable so the "we've lost $100m in 13 years" statement may just be a convenient way to apply commercial pressure and who knows when those losses actually occurred.

[winner69]

Chris Luxon assured investors in the most recent call all routes were currently profitable so the "we've lost $100m in 13 years" statement may just be a convenient way to apply commercial pressure and who knows when those losses actually occurred.

Luxon and his Prime Ministers Business Advisory Council don’t seem to be doing much for SME in New Zealand

However the main game was probably to get the PM to do things for big business like AIR ....that’s good for shareholders if she can make things happen

PS — The big boys like AIR, Fonterra and Bunnings going to double their spend and time on staff training by 2025 ...that’s a good start

[Chinesekiwi]

The China operation is very much worthwhile for Air NZ and operationally it is profitable.

Cargo revenue generated via the route is, as I am told, not apportioned to the route itself however that aside the key issue is and always has been the time on the ground in PVG. Resolve this and you instantly will have a profitable route.

This was the very same issue that caused the Haneda pull out.



Isn't the market sending a signal that this isn't business worth doing?


At some significant cost to shareholders ...and of course taxpayers.

[iceman]

The China operation is very much worthwhile for Air NZ and operationally it is profitable.

Cargo revenue generated via the route is, as I am told, not apportioned to the route itself however that aside the key issue is and always has been the time on the ground in PVG. Resolve this and you instantly will have a profitable route.

This was the very same issue that caused the Haneda pull out.

Interesting. Why would they not apportion freight on the routes where that revenue is gathered ? Seems strange to me. I've been told by flight crew that the AKL-EZE route has surprised AIR management with much higher freight volumes than expected.

[Beagle]

https://www.msn.com/en-nz/news/national/woman-removed-from-air-nz-flight-after-she-fails-to-comply-with-crew/ar-AAB0h1C?ocid=spartandhp
Gosh its hard to keep everyone happy isn't it.

[peat]

https://www.msn.com/en-nz/news/national/woman-removed-from-air-nz-flight-after-she-fails-to-comply-with-crew/ar-AAB0h1C?ocid=spartandhp
Gosh its hard to keep everyone happy isn't it.

wait till they start using the Ludovico Technique

10525

[iceman]

https://www.msn.com/en-nz/news/national/woman-removed-from-air-nz-flight-after-she-fails-to-comply-with-crew/ar-AAB0h1C?ocid=spartandhp
Gosh its hard to keep everyone happy isn't it.

Maybe they should just get back to basics and show a short straight to the point safety video like they used to !! https://www.stuff.co.nz/travel/travel-troubles/112539177/woman-removed-from-air-new-zealand-flight-after-failing-to-comply-with-crew-instructions

[Beagle]

Maybe they should just get back to basics and show a short straight to the point safety video like they used to !! https://www.stuff.co.nz/travel/travel-troubles/112539177/woman-removed-from-air-new-zealand-flight-after-failing-to-comply-with-crew-instructions

Thanks for the link mate. Honestly having watched the video last week there's nothing wrong with it, its mildly amusing and quite PC. If that's too tough for "Miss Prissy" to watch then I think the appropriate response considering the cost to the airline and major disruption to other people's travel plans is she gets to travel on JetStar's super cramped domestic planes for the rest of her life. I hope she gets a permanent ban from AIR.

[G on]

I read that she/they were in the emergency exit row so not wanting to be listening to the emergency preamble they needed to replace them with someone more agreeable to be there.

[Benny1]

I read that she/they were in the emergency exit row so not wanting to be listening to the emergency preamble they needed to replace them with someone more agreeable to be there.
That makes more sense. A high percentage of passengers show no interest in the safety video's inspite of AIR spending millions on them!
In an emergency exit row you must listen to the pre-flight crew instructions and agree to help in an emergency.

[Beagle]

I read that she/they were in the emergency exit row so not wanting to be listening to the emergency preamble they needed to replace them with someone more agreeable to be there.

Yeap the same attitude of "we're above this safety nonsense" got Bob Jones in trouble in the emergency exit row. Bottom line is if you want your eyes to glaze over and are not even remotely interested in even feigning interest in the safety video then don't put other lives at risk, so sit somewhere else. These sort of people would be more interested in grabbing their carry on Gucci luggage than helping deploy safety doors in the event of an emergency and deserve other passengers derision and contempt. Ban them for life so they have to fly JetStar's rubbish experience, sweet justice !

[winner69]

Yeap the same attitude of "we're above this safety nonsense" got Bob Jones in trouble in the emergency exit row. Bottom line is if you want your eyes to glaze over and are not even remotely interested in even feigning interest in the safety video then don't put other lives at risk, so sit somewhere else. These sort of people would be more interested in grabbing their carry on Gucci luggage than helping deploy safety doors in the event of an emergency and deserve other passengers derision and contempt. Ban them for life so they have to fly JetStar's rubbish experience, sweet justice !

Apparently quite a few got their overhead luggage and went down the evacuation slide when that Russian jet caught on fire ....hope they didn’t hinder any of the 40 odd who didn’t make it.

Reminds me ....keep my shoes on (or at least be able to put them on quickly) when flying

[suse]

I find it interesting that they decided to have such a fit (passengers and ANZ). If I'm not mistaken there is nothing in the safety video about what people in exit rows need to do, that is a discussion the flight stewards have with you when you are in the seat (and to be honest it's not much chop anyway, they dont exactly tell you much). If you have seen the safety video more than a dozen times already there really is no need to watch it again regardless of which row you are in. If however, the video said in the exit row you need to do this in an emergency then yes I could see why the ANZ staff would expect a high level of attention if you are in the exit row. Someone correct me if I'm wrong though. Having said all that, I generally glance at the video but certainly not absorbed in it.

[Beagle]

Yes I have been asked if I mind assisting whenever I have sat in the emergency exit row and I would leave my carry on bag in the overhead locker.
Here's the safety video..
. https://www.youtube.com/watch?v=jbPd2gOOYPs.its such a "tough ask" to even fake being interested isn't it. I believe Bob Jones was banned for a period of time, from vague memory 2 years.

[Beagle]

https://www.msn.com/en-nz/money/company-news/air-nz-set-to-make-its-biggest-decision-in-years/ar-AAB9KfD?ocid=spartandhp

[Benny1]

https://www.msn.com/en-nz/money/company-news/air-nz-set-to-make-its-biggest-decision-in-years/ar-AAB9KfD?ocid=spartandhp

Should know the decision by the end of this month....
787's from what I have heard..but only rumours.. Haven't heard anything regarding engine choice.

[Baa_Baa]

Should know the decision by the end of this month....
787's from what I have heard..but only rumours.. Haven't heard anything regarding engine choice.

Beagle could start a poll, I like the 777X with GE engines, but I know nothing. Whatever the decision, I reckon RR engines are screwed in favour of GE, that's the rub isn't it, whatever airframe is chosen RR is going to hurt while it's engine fiasco's are still ongoing.

[Benny1]

[QUOTE=Baa_Baa;758777]Beagle could start a poll, I like the 777X with GE engines, but I know nothing. Whatever the decision, I reckon RR engines are screwed in favour of GE, that's the rub isn't it, whatever airframe is chosen RR is going to hurt while it's engine fiasco's are still ongoing.[/QUOTE

The bulk of any compensation available to AIR from Rolls will come from the discount purchase price on new engine orders.
Therefore GE would have had to sharpen their pencils if the want to match or better any Rolls offer.

[Beagle]

Should know the decision by the end of this month....
787's from what I have heard..but only rumours.. Haven't heard anything regarding engine choice.

Acknowledge what you've said above BUT I think AIR's management must surely take the proactive step to select the more reliable engines so as to reduce the risk to the company going forward. "The bitter taste of poor quality lingers long after the thrill of a bargain"

[Robomo]

Should know the decision by the end of this month....
787's from what I have heard..but only rumours.. Haven't heard anything regarding engine choice.

Fascinating choice. I've always thought it would be about 8, 777-9 and 8 to 10, 787-9. The 777 for capacity and 787 (2 versions - USA/Rest of world). Fairly straight swap and better for crewing. The 787 is really versatile and fits well with ANZs plans and routes.
However, the Airbus has the range to get to New York, New Delhi and Dubai (the 777 doesn't), is cheaper and has slightly greater capacity. Airbus A320 crew could slot into crew positions OK and it's a popular plane with plenty of companies able to provide support.

[BlackPeter]

Hmm - so Airbus A 350 has more capacity, can fly longer distances and is cheaper.

Of course will AIR will pick Boeing in this case ... only the worst can be good enough for the national carrier :p; Wait- aren't there some Ilyushin's we should consider as well?

But its probably just about giving in to the big bully in the white house ...

[777]

Hmm - so Airbus A 350 has more capacity, can fly longer distances and is cheaper.

Of course will AIR will pick Boeing in this case ... only the worst can be good enough for the national carrier :p; Wait- aren't there some Ilyushin's we should consider as well?

But its probably just about giving in to the big bully in the white house ...

Why so bitter and twisted?

When have AirNZ selected the wrong aircraft in the past?

[Beagle]

Why so bitter and twisted?

When have AirNZ selected the wrong aircraft in the past?


I think its all just Monday morning tongue in cheek stuff, taking the proverbial.

[Filthy]

Hmm - so Airbus A 350 has more capacity, can fly longer distances and is cheaper. Of course will AIR will pick Boeing in this case

reliability? residual value? passenger capacity? supplier rebates? maintenance costs? pilot & engineer preferences? technology? - could be many other factors to take into consideration......

[iceman]

reliability? residual value? passenger capacity? supplier rebates? maintenance costs? pilot & engineer preferences? technology? - could be many other factors to take into consideration......

Yes all these things are no doubt considered, reliability being extremely important. Boeing with Dreamliner (engine) problems and 737 MAX software issues are unlikely to have a high reliability score at the moment.
Quite worrying if true what Benny1 says above that compensation from RR will come in the form of discounts of new engines !! The damage/loss has been done already and RR should be compensating now, not sometime in the future and only IF AIR buys more engines of them.

[Jay]

So if true about RR, if they do not pick RR engines for whichever aircraft they decide on, the $40M odd (think it was around that much) will never be recovered??

[777]

So if true about RR, if they do not pick RR engines for whichever aircraft they decide on, the $40M odd (think it was around that much) will never be recovered??

They lease the engines so they can compensate on the current ones hanging off the wing.

[BlackPeter]

Why so bitter and twisted?

When have AirNZ selected the wrong aircraft in the past?

Not so fast - just calling a spade a spade.

Which other airline producer supplied recently new planes with build in crash mechanism - other than Boeing? AIR was just lucky they had no need for the 737 Max 8 - who knows which other bugs Boeing did oversee in their planes?

Why would the software for the other new Boeing planes be any better?

Boeing's processes are clearly not up to scratch - and they didn't even admit their haphazard engineering approach after the first crash but happily allowed another plane to go down and kill its passengers.

Ah yes - and buying Boeings with RR engines was an amazing idea, wasn't it?

Not sure why AIR would pick them, but it clearly can't be with safety, reliability, range or economy in mind.

[winner69]

Didn’t an AIR Airbus crash about 10 years killing all aboard.

[iceman]

Didn’t an AIR Airbus crash about 10 years killing all aboard.

Yes it did but was operated by XL airways and about to be handed over the AIR. Caused by human error https://nzhistory.govt.nz/page/air-nz-a320-crashes-france

[777]

Boeing's processes are clearly not up to scratch - and they didn't even admit their haphazard engineering approach after the first crash but happily allowed another plane to go down and kill its passengers.

Ah yes - and buying Boeings with RR engines was an amazing idea, wasn't it?

Not sure why AIR would pick them, but it clearly can't be with safety, reliability, range or economy in mind.

That's right. AirNZ knew that these engines were going to have problems before they actually did have problems but selected them anyway. They should have known better then shouldn't they BP?

[steveb]

Wikipedia are saying that the A350 Airbus is powered exclusively by the RR Trent 1000 engine,so if they are getting a credit from RR they would have to be looking at the A350?

[BlackPeter]

Wikipedia are saying that the A350 Airbus is powered exclusively by the RR Trent 1000 engine,so if they are getting a credit from RR they would have to be looking at the A350?

How come these engines didn't make any problems yet on the A350, but the dreamliner turned into a nightmare liner with them?

[777]

The A350 engine is actually a RR Trent XWB which was developed from the RR Trent 1000 according to Wikipedia.

[BlackPeter]

That's right. AirNZ knew that these engines were going to have problems before they actually did have problems but selected them anyway. They should have known better then shouldn't they BP?

Nobody expected them to foresee the recent issues. However - given that they seem to be happy to ignore them in their decision to buy future planes, any further issue with Boeing planes will fall back on them.

The problem with serious design flaws is, that they are like cockroaches. If there is one which slipped through their quality system, there are likely to be more which did the same. Hard to see why AIR wants to take this risk if the alternative is anyway better ...

[Beagle]

My guess is they will run with the 787-9 and hope it finally becomes a Dreamliner with the much more reliable GE engines.
Surely the directors and senior management team are well aware that with all the substantial disruption caused by the faulty RR engines AIR has suffered some brand damage and the prudent thing to do is irrespective of whatever favorable deal RR come up with, is to take the substantially lower risk option and run with GE engines.
Worth noting that GE engines can be retrofitted on existing aircraft.

[couta1]

The Troughers are getting a pay freeze my heart bleeds for them. Lol

[Beagle]

The Troughers are getting a pay freeze my heart bleeds for them. Lol

Got a link mate ?, I could do with reading all about the high and mighty get their wings clipped a little bit.

[couta1]

Got a link mate ?, I could do with reading all about the high and mighty get their wings clipped a little bit. NZ Herald Premium content so you have to pay to read the whole article.

[iceman]

Got a link mate ?, I could do with reading all about the high and mighty get their wings clipped a little bit.

Basically just saying fuel costs have risen by $200m per year and top end of management will accept a 12 months pay freeze and be focused on cost cutting. I suppose this includes Luxon having to suffer on his measly $4.6m (last year's remuneration) for another 12 months !!

[Blue Skies]

The Troughers are getting a pay freeze my heart bleeds for them. Lol

Let's give them some credit, good leadership by senior management, essential in my view if you're setting up for some harsh cost cutting & looking for cooperation from staff & suppliers.

[Benny1]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12230900

So the plan is to squeeze up what's left of traditional economy as tight as they dare think they can get away with down in the back far corner of the aircraft then install some new seats in the pitch they just had.. And then charge extra for what they offer at the moment ?

[Beagle]

She's pretty squeezed up down the back already.

[iceman]

Virgin reducing capacity across the Tasman https://www.stuff.co.nz/business/industries/112726405/virgin-australia-reduces-transtasman-services-out-of-auckland-and-chirstchurch

[Blue Skies]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12230900

So the plan is to squeeze up what's left of traditional economy as tight as they dare think they can get away with down in the back far corner of the aircraft then install some new seats in the pitch they just had.. And then charge extra for what they offer at the moment ?

And hey if they remove all the doors, they could get several more rows of seats in. :eek2:

[Blue Skies]

Virgin reducing capacity across the Tasman https://www.stuff.co.nz/business/industries/112726405/virgin-australia-reduces-transtasman-services-out-of-auckland-and-chirstchurch

Excellent!

[winner69]

Virgin reducing capacity across the Tasman https://www.stuff.co.nz/business/industries/112726405/virgin-australia-reduces-transtasman-services-out-of-auckland-and-chirstchurch

I’ve heard their Passenger Load Factor across the Tasman was about 65% ...ouch

[winner69]

Airlines doing it tough this part of the world ...at least Virgin

Wonder if AIR will reduce guidance further?

https://www.businessnewsaus.com.au/articles/virgin-takes-a--100-million-nosedive.html?utm_medium=email&utm_source=www.thewebconsole.com&utm_campaign=BNA+news+update+17+May+2019&utm_content=34887957&c=31122783&_c=00a1dc8a37f4b05a1bebd3bf4ce1f3a6

[Beagle]

Airlines doing it tough this part of the world ...at least Virgin

Wonder if AIR will reduce guidance further?

https://www.businessnewsaus.com.au/articles/virgin-takes-a--100-million-nosedive.html?utm_medium=email&utm_source=www.thewebconsole.com&utm_campaign=BNA+news+update+17+May+2019&utm_content=34887957&c=31122783&_c=00a1dc8a37f4b05a1bebd3bf4ce1f3a6
Yeah, NAH.
"Over the last few years Virgin has struggled to turn a profit, recording a $653.3 million loss after tax in 2018, a $185.8 million loss in 2017, and a $224.7 million loss in 2016".
Chris Luxon was so right to ditch this dog. Talk about a perennial under-performer and some of those years with very low fuel prices and other airlines making record profits. The previous CEO was completely inept and grossly overpaid and needed to go many years ago. Only one person on the board had the gonads to stand up and say what needed to be said and the other board members were wimps. He departed a little while back, finally but now there are all the failed legacy issues to deal with that'll be years in the clean-up. Snow Leopard is very welcome to this mongrel of a mutt.
This bird (pup) will never fly but we can't call it a Kiwi can we lol

[winner69]

So it’s going to be the Boing planes

https://www.reuters.com/article/us-air-newzealand-aircraft-idUSKCN1SQ03U

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/335012/300456.pdf

Latest stat's and fuel hedge look okay to me.
Forecast fuel consumption for FY20 is 9.6m U.S. barrels which at 42 gallons each is 403.2m U.S. gallons of fuel forecast to be burned and at 3.78 litres per US gallon is $1.524 Billion liters of jet fuel.
Crikey, No wonder fuel cost is important !

[winner69]

Always a worry when a company publicly says they’ve got external consultants in to sort out their business ....esp when they mention words like “business realignment”. Implication is that they don’t know what they’re doing.

But then when you are seeing profits sinking to 5 year lows suppose you need to do something drastic


https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12224620

[Benny1]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12234014

Well at least it is now been confirmed publicly that the new aircraft order will be announced on Monday.

[winner69]

Eight new 787-10s with GE engines

Wonder how they calculate 150,000 tons of carbon savings ......what a ****....can’t fool me

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/335068/300527.pdf

[Beagle]

I am very relived they have gone with GE engines. I would have sold my shares if they choose to stay with RR as I believe a decision that way would amount to gross recklessness no matter how cheaply RR would supply them. I hope they can wiggle their way out of the RR engine leases on the existing planes at some stage.

Goode pragmatic decision making by AIR.

[BlackPeter]

Eight new 787-10s with GE engines

Wonder how they calculate 150,000 tons of carbon savings ......what a ****....can’t fool me

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/335068/300527.pdf

Well, at least they don't buy them with RR engines. RR discount not good enough?

Lets hope Boeing informs and trains this time the pilots related to any new software safety features they might have dreamt up for their planes.

[winner69]

Well, at least they don't buy them with RR engines. RR discount not good enough?

Lets hope Boeing informs and trains this time the pilots related to any new software safety features they might have dreamt up for their planes.

You need to trust and have heaps of faith in plane makers

[BlackPeter]

You need to trust and have heaps of faith in plane makers

Exactly this is the problem ...

[winner69]

Exactly this is the problem ...

...as long as people keep on flying it’s not really a worry

[BlackPeter]

...as long as people keep on flying it’s not really a worry

agreed - it only becomes an issue if they drop out of the sky ...

[Beagle]

Eight new 787-10s with GE engines

Wonder how they calculate 150,000 tons of carbon savings ......what a ****....can’t fool me

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/335068/300527.pdf

Fuel burn for 1H FY20 is estimated at 750,000,000 liters. Replacing 777-200's with 787-10's which are 25% more efficient will make a meaningful difference unlike some of the window dressing with electric cars.

[Beagle]

Don't think there will be a downgrade at this afternoon's investor day because I haven't noticed any exec's selling many shares lately.

[Onion]

Don't think there will be a downgrade at this afternoon's investor day because I haven't noticed any exec's selling many shares lately.

We know how you react if insiders trade before an announcement don't we. Bl**dy nora Beagle :D - I hope that AIR have some rules in place to prevent that.

[Beagle]

We know how you react if insiders trade before an announcement don't we. Bl**dy nora Beagle :D - I hope that AIR have some rules in place to prevent that.

LOL Barked so loudly SUM company had to change theirs and Tony Carter probably has the Beagle's barking still ringing in his ears after I barked up a storm after last time AIR's exec's sold one day before the investor presentation. Beagle's thinking is that if one is going to bark you might as well bark nice and loud :D

[winner69]

Sharechat essentially says it’s a downgrade ...or at a profit warning

Don’t downgrades come in fours

the market seems quite happy as AIR head to what could be their worst profit in five years.


http://www.sharechat.co.nz/article/f04abc55/air-nz-profit-warning-follows-plane-upgrade-announcements.html?utm_medium=email&utm_campaign=Air%20NZ%20profit%20warning%20follows %20plane%20upgrade%20announcements&utm_content=Air%20NZ%20profit%20warning%20follows% 20plane%20upgrade%20announcements+CID_9ef932870d51 d4331b9b9fd74fe2b15d&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticlef04abc55air-nz-profit-warning-follows-plane-upgrade-announcementshtml

[Raz]

Sharechat essentially says it’s a downgrade ...or at a profit warning

Don’t downgrades come in fours

the market seems quite happy as AIR head to what could be their worst profit in five years.


http://www.sharechat.co.nz/article/f04abc55/air-nz-profit-warning-follows-plane-upgrade-announcements.html?utm_medium=email&utm_campaign=Air%20NZ%20profit%20warning%20follows %20plane%20upgrade%20announcements&utm_content=Air%20NZ%20profit%20warning%20follows% 20plane%20upgrade%20announcements+CID_9ef932870d51 d4331b9b9fd74fe2b15d&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticlef04abc55air-nz-profit-warning-follows-plane-upgrade-announcementshtml

Yes personally SP bit of a puzzel however yield people may be holding it up.

[Beagle]

Market was well aware that the fuel price was trading above previous estimate so is not surprised. Anyone surprised would have to have been living under a rock for the past couple of months.

Very smart move going with GE engines https://www.msn.com/en-nz/travel/news/dreamline-could-make-direct-flights-from-auckland-to-new-york-a-reality/ar-AABYpWS?ocid=spartandhp

Media hype painting it as a $60m downgrade when in fact they were previously guiding $340m - $400m, mid point $370m, and now guiding $340m+
Only in the imagination of some creative journalists minds is this a $60m downgrade.

Investor day materiuals here http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/AIR/335101/300568.pdf

[value_investor]

The range was initially at $340-400m, and down $25m but in excess of $340m. So anywhere between $340m to $375m. The movement in fuel prices is always going to be there and for that reason its a cyclical stock more than anything.

I bought at the lowest point of the market so I'm okay with holding at close to $2 average. I would only buy more if it went down that low again which I only suspect would happen in two circumstances. First being oil prices heading back up to $100 USD a barrel or global conditions worsening considerably to the point it affects disposable income on a mass level.

A lot can happen between now and 2022 and both events are on the cards, not sure at what state either will be at in 2022, if oil goes up I think the budget players and poor brand operators get weeded out quickly with the brand champions sticking around. A quick response to slowing demand and oil prices rising will give you an indication of what type of company this is.

[Raz]

The range was initially at $340-400m, and down $25m but in excess of $340m. So anywhere between $340m to $375m. The movement in fuel prices is always going to be there and for that reason its a cyclical stock more than anything.

I bought at the lowest point of the market so I'm okay with holding at close to $2 average. I would only buy more if it went down that low again which I only suspect would happen in two circumstances. First being oil prices heading back up to $100 USD a barrel or global conditions worsening considerably to the point it affects disposable income on a mass level.

A lot can happen between now and 2022 and both events are on the cards, not sure at what state either will be at in 2022, if oil goes up I think the budget players and poor brand operators get weeded out quickly with the brand champions sticking around. A quick response to slowing demand and oil prices rising will give you an indication of what type of company this is.

And backwards we go...

https://www.stuff.co.nz/business/industries/113048500/air-new-zealand-reduces-domestic-capacity-by-2-per-cent-reviews-fares

[winner69]

AIR share price drifting a bit today after yesterday’s profit downgrade.

Is it time to start saving up for when it’s back in the 220s

[Beagle]

AIR share price drifting a bit today after yesterday’s profit downgrade.

Is it time to start saving up for when it’s back in the 220s

I think you're being more than a "little" hopeful.

[Raz]

I think you're being more than a "little" hopeful.

Let’s see if we have a rational market, this is one share that has a history of not defying gravity.

[winner69]

Luxon’s days at AIR maybe numbered

Rumour is he is being ‘parachuted’ into Botany by the Nats in next year’s election