Yes, super flight down to Chch this morning to the SCL meeting. All staff extremely professional. Chris Luxon a top leader, undemanding fundamentals, all looks very promising.
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Couldn't agree more Roger.
Have listened to Chris Luxon on Larry Williams(Newstalk ZB) business show few times in the evenings and he comes across as such an inspiring leader with clear vision for the company. He's a pleasure listen to albeit you are a shareholder or not, very articulate.
PS: Good luck Roger for the SCL meeting and look forward to yours and Percy's thoughts on the same.
I wasn't impressed by my Shanghai flight in business a few weeks ago. I thought the food has reallly slipped. Especially the south bound breakfast. Wine was excellent of course. FSM was also excellent, but I had problem understanding two of the other staff. It sure didn't feel like a NZ airline. The 777-200 without re-fit is showing it's age too.
Yes, an excellent airline but for that business price,you must get it right every time.
Sure Sam, times for AIR are good atm but keep at the back of your mind that Airline shares are cyclical stocks..Cyclic stocks always look terrific during econonic good times (rockstar economies:)) but they can turn bad very quickly...Google cyclic stocks and read about cyclical stock behaviour.
AIR's past has been a textbook example of a cyclical stock and since AIR is still the same animal (Airline business), us investors should expect that cyclical type behaviour to continue in the future.
AIR performance atm is running true to the cyclical stock behavioural pattern, it has been in a very strong primary uptrend since July 2012 (typically out performs the market) and AIR's shareprice has so far risen +300% all within this so-called NZ's "rockstar" economy period.
Cyclical Stocks behave cyclically, in other words history repeats (with differing degrees). Being cyclical means it keeps on repeating. These stocks can be great investments when you keep to the specific discipline that at some point no matter how much you love this stock you will realise your profits and then stay out for half of the next cycle pattern when these cyclical stocks typically under-performs the market.
History of when fundamental forward analysis went horribly wrong in 1999
when the NZ economic boom wound down in 1999 the stock brokers forecasts were still very optimistic (considering professional people should know all about cyclical stock behaviours when the western world economy comes off the boil and enters recession).. but I think at the time the analysts heads were clouded with optimism, with Air NZ having recently joined the Star Alliance, the looming Sydney Olympics and AIR's booming current business performance with PE of ~8... Analysts average forecast for the following year 2001 was projected for $219.9m and a forecast PE of just under 6, a dividend of 15c/s (7.5%) using that current shareprice...great analytical news eh?..so why was the chart diverging showing that the price had already topped out around the $4.30 mark way back in mid 1997 which turned into a primary downtrend breaking TA $3.00 supports in Jan 1998?
My earlier post (Post#2255 15th Feb 2015) diagram shows part of the answer with history.. the red arrows show the 2001 brokers forecast of 219.9 being downgraded to a -10.3M forecast the following year when the broker factored in the previous "unforeseen" 2000-2001 recession.
My opinion here is that when dealing with cyclical stocks the state of the various Country's economies seem to be the major factor (see typical cyclical stock histories), therefore a major part of investors focus should be on the present state of countries economies that AIR is involved in rather than on brokers or everyone elses fundamental forward projections..OK Ansett had a lot to do with Air NZ woes back in 2001 but remember Ansett was a cyclic stock too..
The interesting thing back in 1998 was that charting actually gave investors an early warning signal to sell shares while the brokers (fundamental foreward projections) gave investors the thumbs up to buy more shares.
Economy is hardly rock star, anything but and yet we see from the most recent monthly operating stat's that RPK's are up strongly as are load factors.
Could it be that air fares are now so cheap in real terms that people think nothing of getting on a plane and whipping down to Chch for a day to see their friends ?
Lots of new immigrants are also adding fuel to the domestic engine and with tourism growing strongly and potentially even stronger now we're a bit cheaper from a lower currency all those tourists coming here are feeding into the domestic network.
I've flown a fair bit lately around the country and everywhere you go the planes are near to full capacity.
I think you may be onto something here. I think nothing these days of whipping up to Auckland whereas in the past it would have required a lot more consideration. Although I generally do only pay for the "seat only" cheap flights and will not pay $300 for a one way to Auckland from Wellington unless another is paying.
Contrary to buying cheap seats. On business trips, I am quite happy to pay for the full price - so that I have flexibility with times and dates. Thoroughly believe in it's worth.
On holidays, I am also happy to fork out an extra few dollars for the premium seats or if the Star Alliance upgrades are unavailable.
I question whether the cheap seats are where profits are generated or whether they are seat fillers that is icing to the cake.
On a side note.
http://www.stuff.co.nz/travel/news/6...with-air-india
With comments this being a cyclic stock, I agree with those sentiments. I suffered significant losses arising from the the downturn in 2008/2009 - rising crude oil prices at the time.
Now with falling oil prices and comments from OPEC and Iran that they intend to increase supply - will the great run by Air NZ be further extended?
Add to that fuel efficient airplanes and codeshares - don't forget the direct GPS routing system that they have been touting (more fuel savings).
Look forward to hearing members views on tis.
Good post Hoop, I understand the essence of your post however in your prior post that you've linked to (and correct me if I'm mistaken) but wasn't the problem back then the company under performing broker expectations greatly? Now I also understand that history can repeat itself and that we could see a result greatly below broker's forecasts and investor expectations. Well I like to think I'm not too attached to this stock as to not get out when I see results that aren't to my liking. Until that time AIR doesn't seem to be putting out information detrimental to what I would call an undervalued price. So to address what I should keep in the back of my mind, I'm with AIR for a good time, not a long time :)
Sam