What ever Roger.....Can't do anymore debating here on this subject..haven't the time to waste in non productive counter arguments and cluttering up the thread with repeated arguments boring everyone to death including myself...
Have a good one:)
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You obviously didn't listen to the analysts conference call at the time of the annual results or attend the annual meeting as otherwise you would have heard C.L.'s response to claims its a cyclical company. The stock is responding nicely to improved results and outlook and is up from $2.50 a few months ago at the annual meeting. Obviously latecomers to the party would be frustrated by yesterday's price drop and that's perfectly understandable. Thank you for your link in post #4599.
Just published today...
http://atwonline.com/finance-data/as...132f26d0a28edc
International traffic on Asia-Pacific carriers grew 7.9% to 276.3 million passengers in 2015, according to the Association of Asia Pacific Airlines (AAPA). Over 20 million additional international passengers were carried by Asia-Pacific carriers in 2015, pushing the rate of growth in the sector to exceed 2014’s 4.9% year-over-year (YOY) growth by 3 points.
Low oil prices pushed the region’s airlines to competitively lower their airfares, boosting passenger traffic in the region, AAPA said.
“Long-haul travel markets prospered on the back of an improvement in economic conditions in selected advanced economies,” AAPA DG Andrew Herdman said, adding that regional travel demand also grew solidly in 2015, despite sluggishness in the Asia-Pacific economy and regional currency weaknesses.
“Less optimistically, air cargo markets saw only marginal growth [in] 2015, a reflection of the slowdown in global trade,” Herdman said.
In 2105, international traffic at Asia-Pacific airlines rose 8.2% YOY to 1 trillion RPKs total; capacity in the region was 1.28 trillion ASKs, up 6.3% YOY. The region’s total passenger load factor for the year came in at 78.4%, up 1.4 points YOY.
Air cargo traffic in the Asia-Pacific region was up 1.6% YOY in 2015, to 64.93 billion FTKs; air freight capacity for the year increased 3.5% YOY to 101.86 billion FATKs, resulting in a 63.7% aggregate freight load factor for 2015, down 1.3 points YOY.
“Competitive market conditions continued to restrain margins [at Asian airlines]; airline profitability was … affected by currency volatility and variations in individual fuel hedging policies,” Herdman said. “[But] the outlook for air travel markets in 2016 remains broadly positive, although there are significant risk factors ... including increased uncertainty over the regional economic outlook.”
AAPA’s figures—all of which are provisional—are based on aggregated traffic data for 31 Asia Pacific-based carriers.
Many thanks Robomo. Its very pleasing to see how well AIR N.Z's load factors and RPK growth compare so favourably with its peer group.
Which shows its a cyclical stock--cyclical means up as well as down----now lets see..what factors could cause a stock to be cyclical--changes in cost?-oil ..changes in sales --fewer passengers if the economy goes pear shaped(would you take a vacation overseas if your job was at risk?)--changes in sentiment--an air mishap(god forbid) Another airline stealing business(over performing)....Now thats not a reason for every one to be bummed or angry,because basically AIR are doing very well at this point--but it is a reason to be vigilant--
The other option is to assume that it will continue to go up forever.-not many things go up forever--especially something that mostly depends on leisure rather than necessity...That of course does not mean that 2016 wont be a cracker year...but a cracker decade might be a bit more of a stretch..After all..the Gov. did have to bail AIR out at one point.Can you imagine what the chart would have looked like if they had'nt?.....Be happy with what you've got..now.
Skid - Why do you think demand has been so strong and RPK growth at 17% double that of its regional competitors given soft economic conditions ? Maybe AIR's marketing team and management are world class operators ? Or is it that since Mr Luxon took over as CEO he's really improved the culture of the organisation, remember that great management always starts with having a great leader as CEO.
One thing I've learned from over 30 years of investing, never underestimate the value of a really brilliant CEO.
Whether Luxon (and others) like it or not AIR will always be seen as a cyclical.
However we should not overlook that the highs and lows of the 'cycle' in future will be higher than previously. AIR is now a more substantive company.
As a 'cyclical' stock AIR's PE will be low (5 to 7) when profits are heading to the top of the cycle and the PE will be high (15 to 20) when profits are at he bottom at he cycle. Over the whole cycle the PE will average out at 10 to 11.
The higher he profit the lower the PE, and vice versa. We had this discussion on this thread a year or so ago.
But if Rogers 64 cents eps for Fy16 comes to fruition than a share price later his year somewhere between $3.20 to $4.48 is likely. Probably nearer the $4.48 as FY17 loos like it going to pretty good as well and that will be factored in.
Holders just need to be patient at the moment. That $3 is strong support at the moment - in a few months we will be wondering want the fuss was all about
Good management is a plus indeed..and they will have to be as things are hotting up in the airline industry that could make this last year a walk in the park..so this will put them to the test.......GAME ON!
newest arrival..
http://www.nzherald.co.nz/business/n...ectid=11581175
An of course we know about Quatar--Man that must be some plane to fly 18.5 hrs!! (I think I would rather have a layover to stretch my legs and keep from going to La La land:)
There are articles all over the place--they say the cheap prices are here to stay for this year,and there will no doubt be some battles for bums on seats.
Aside from not quite having my dates sorted for this winter,it seems prudent to wait until the battle line have clearly been drawn.
Im sure Luxton is a worthy opponent,but the way I see it ,this last year has been like Joseph Parker fighting some of those overweight so so opponents ..and now the quality heavy weights are coming up! He is still a great fighter but the fights will be more of a challenge.
So I have, purely for the fun of it had three attempts to work out what the Net Profit Before Tax (excluding any contribution, if any, from Virgin) that AIR will announce next month.
As the first iteration I came up with $368M but AIR have yet to contradiction their $400+ this seemed a little unlikely.
Second attempt was $397M so is in the ball park.
Finally I managed to pulled $421M out of the hat.
So I now confidently predict that not only are none of above right but the result will be $409M + Virgin.
Best Wishes
Paper Tiger
Rumour in the airline industry Skid is they're going to nickname that 18 1/2 hour flight the deep vein thrombosis special :)
Its good to note they're committing to learning from their mistakes...I hope they're quick learners :eek2:Quote:
It had suffered some reputation damage with the crash of AirAsia Indonesia A320 in late 2014. An inquiry found pilots' reaction to mechanical problem contributed.
The wider airline group had learned from it, said Ismail.
"Every time there are situations that we can avoid, we put it into training."
Quite right Winner69. At 68 cps incl of VAH earnings on a PE of 6 (even if this is the top of the cycle and I am not convinced it is) that puts them at $4.08 as well as some very juicy dividends this year plus a special dividend.
PT They must have been super confident to predict normalised earnings before tax would exceed $400m months ago at the annual meeting. Nothing said since and loads have been very strong and RPK's have been well above capacity growth and oil has gone down a LOT since the meeting so all signs point well north of $400m. $500-$550m incl of VAH is my pick.
As a Financial auditor of PLCs in a previous life, 400 million is the only relative firm element, if they have indicated that at the AGM as per Rodger comment..the usual dance will be between both management and auditors plus respective legal teams having a discussion about winding up or down provisions. It will depend if they want to maxamize dividends or smooth income and dividend policy going forward.
Air Asia x pilot program has been called out before..so would never travel with them.
Air has certainly alienated a lot of people with their nickel and dime approach, in pricing and mind set flowing to service. People do not take kindly to tiered service in the same cabin, especially if its in the premium cabin. People will flock to the alternatives if the price is right.
Just to set the record straight--I avoid Air Air Asias long haul flights like the plague (but not everyone will---plenty will go for the bargain)
I do use them alot for short flights in Asia and they have always been fine.(and have been great at making it easy to get around at a good price)..point is ..its more competition---why are all these airlines flocking to lil ole NZ? (it may be the very thing that has got everyone so excited--AIRs balance sheet)
I think that there is only so successful an airline can get before others step in for some of the spoils.
A small side bar--my daughter flew Air Asia to OZ from Thailand some years back...She couldnt even get water on the flight except for a few cups of hot water...now thats class--(I ride a motorbike all over Northern Thailand,but Im to old for that kind of crap)
but if it brings down the price of other quality airlines,its good for customers...Having said that I wouldnt underestimate Tony Fernandes,the man behind Air Asia.
Trumping Qatar? .... http://www.nzherald.co.nz/business/n...ectid=11581539
Cyclical is Air NZ, earnings wise which leads into valuations and share price.
Top to bottom of cycle was F07 to F12 when EPS steadily declined from 22.8 cents to 6.3 cent. Over those 5 years share price fell from 264 to 86 (June prices). PE over that time averaged about 10
So lets say the current up cycle will also last 5 years - F12 to F17. Low EPS is the 6.3 cents and lets say F17 EPS is 66 cents (Roger won't agree)
Many say you should value cyclicals on mid point earnings and average PE multiple. So average EPS over the cycle is 36 cents - on a PE of 10 gives $3.50 (conservative)
So AIR 'cheap' even when treated as a true cyclical - looks like it.
Even so I think that likely fat dividends will eventually tempt many into buying at higher prices.