I agree the card looks promising. there is an account fee (though not always payable and cheaper than a credit card). I also think I did see the exchange rate (check the account fees page maybe). I think it said Mastercard and 2.5%????
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you and me both Jaa. Although I disagree with you on the causes.
From my ss which tracks operating stats:
- Domestic RSK growth has averaged 4.6% over the 8 months since the quake
- Tasman Pacific RSK growth has averaged 7.9% over the same
- Longhaul RSK growth has averaged -6.8% over the same
My take is that the domesic and trans tasman business are in rude health (even after chch) - as good as they have ever been. The intro of grab a seat and s2s has really stimulated demand across both businesses and capacity is set to increase significantly over the next 4 years with the A320s and new ATRs domestically.
Its the Intl business thats slow - and its not just japan. The Uk and US are having a poor year with the current economic woes. Looking forward to the preso this week and hearing about upcoming changes to fix the longhaul business.
As you say increasing loyalty and that business is great for the co. The new cards are a good idea - and the trial of oneup will be interesting.
No doubt about it the level of innovation at NZ is fantastic - this follows the success of reverse auctions grabaseat et al. Lets see it drive SH value over the next year.
A belated update from me on the investor presentation, fallout, recent operating stats, and outlook - a month before the interim results announcement.
Also - read my outlook at the end for new destination predictions including a south american destination - something I know some of you have long been waiting for
INVESTOR PRESENTATION SUMMARY:
- NZ present on loyalty strategy (onesmart)
- Discuss a/c funding strategy
- Business update:
- Domestic recovering well from Chch and continuing to be company's goldmine, new A320s going well and ATR-600 ordered, looking to grow
- TT & PI sustainable profitability :t_up: amazing VBA alliance going well, new destinations 2012 (Hobart, Canberra or Newcastle my guesses)
- Intl - little said of value - more later
Trading environment: Commentary that operating conditions remain "challenging" and overall still expect "some improvement" on 2011 depending on economic conditions.
- Partnerships explained types and NZ experience and seeking to grow partnerships
Long Haul: target $110m profit improvement by FY15 - interesting wheel of sources keys are fleet (787), ancil rev(more travel packages i think), alliances (ANA announced - whos next?), also grow Pac rim business
787-9 - leisure configuration expected (seats IFE food) - a bit cryptic here. Clearly the config will be high density low premium seatcount relative to 777-300er but how will IFE and food be "leisure" orientated? Can't imagine buy on board for flights to China/Japan.
Grow Pac rim business - China deepen and grow (will they increase agreement from 7 weekly?), recover Japan (of course), explore new markets in South America, Asia, USA - (here more indications of ambitions and priority I think)
Fleet - Noted opportunity to replace 777-200 with 787-9 (1st time I have seen acknowledged but a clear must do)
Cost base - Renewed focus on cost base (long overdue in my opinion - must be tackled and redundancies inevitable unfortunatly)
FALLOUT
Analysts from all major brokers downgrade FY12 estimates on the back of management downtalking results. Clearly commentary from management is less optimistic than at FY11. Recovery taking time and ongoing EU weakness having an impact.
I won't break down every research report but most have downgraded target from $1.30-1.50 to $1.10- 1.20. Very disappointing for all shareholders.
And the shareprice falls from around $1.10 to around 85c-90c and is currently at around 90c. More research comes out from DB saying that AIR is now at the same discount to BV as it was in GFC 2008.... around 0.6 P/B. Actually DB still have $1.43 12 month target so what I wrote above re target prices was a bit worse than is the case. Concensus is now $1.27 - must have been around $1.40+ prior to preso. CS at 1.15 UBS 1.19 GS 1.20.
Interesting that DB has (i think) the highest target price and is also the IB advisor for AIR (see VBA purchase).....
RECENT OPERATING STATS
Quick comments only on Nov and Dec stats.
Overall yoy growth is negative 1% roughly
Domestic growth anemic at 1.8%
tasman pacific growth slowing - seats to suit now 15 months old so growth slowing as last year growth was 13% for nov and dec (anything above 4% is good now)
longhaul growth -5% - this is the big weight on the business. North America not growing (but profitable) and same sad story for Japan Asia UK.
Really its just the same story every month. The sooner the longhaul review takes effect the better.
MY OUTLOOK ON THE LONGHAUL REVIEW CHANGES EXPECTED TO BE ANNOUNCED SOON
1st: Redundancies in the UK office and further tie up with Virgin Atlantic (maybe virgin holdiays take over some functions?) other redundancies in head office no doubt. -My sympathies to anyone affected.
2nd: As indicated recently a reduction in flying to the UK (not sure how this will be implemented most likely just freqency reductions and seasonal increases
3rd: I am expecting an announcement imminently of new destinations, possibly even 2 new longhaul and at least one trans-tasman. My pick is EZE 3x weekly with the 777-200 (ETOPS 330 on 777-200 coming soon!!! FINALLY) and Taiwan to resume services 2x week (its out on a limb but with EVA joining star makes sense) otherwise can't figure out where else they could go in Asia. India is often talked about but it is too far for direct service without the 787.
4th: I should mention NZ will now codeshare with ANA - JAL dumped. Great news as ANA now pre-eminent Japanese airline so lets see what impact this had on Jap routes - comes into place in march 25th
FINAL NOTES
Interim result should be interesting looking forward to it - lets hope its a better one than expected by extrapolations of commentary in November.
Thanks for reading - comments discussion welcomed.
thanks - i always appreciate your in-depth analysis on AIR.
i'm being a bit lazy - is the investor presentation online yet? I'm about to write an essay for my MBA with a focus on AIR and this is just the sort of info i'm after.
yes it is
http://www.airnewzealand.co.nz/inves...-presentations
The 2011 analyst presentation was not as interesting as I expected. I was hoping to hear outcomes of long haul review but they have kept quiet over christmas and the announcement will be in February (likely prior to Interim results with rationale detailed further in interim results presentation). Exciting times
Exciting times? I hope so as it has been a bit depressing of late.
Would it be time to have Ralph Norris on board again? Would make a fine chairman.
Modandum
EZE ? Ezeiza -Buenos Aries?
Rumour is out (on Stuff I think) that Rob Fyfe will resign before the pending Govt float of 25%.
He is seen as a "rock star CEO" (not my phrase) so assume the SP will go down on anticipation and on announcement.
He made CEO in October 2005 - how has the company actually gone (performance wise) under his guidance. It hasn't gone bankrupt like many of the American ones but it did require a Govt cornerstone to give it stability.
Yes it has been floating around for a while - he was turned down the CEO gig at Fonterra. I don't think the shareprice will be impacted. The "rockstar" is more to do with his fashion sense and popular appeal than anything. He does have his detractors though - who suggest NZ has been to conservative and not taken advantage of its rights to fly from australia to asia and the us.
My personal view is that he has done a great job creating a positive culture which is so important, and steered the ship safely through the GFC, dealt well with the loss of an A320 and NZ souls aboard, apologised for erebus, and really made AIR the most trusted brand in NZ - a wonderful achievement. He also presided over S2S which has been a great success.
He has however not done enough to improve the financial performance by making the tough decisions, which are finally being fronted up to. The non fuel cost per seat mile of AIR is still to high. This only really applies to the international business - but when you are competing globally having a competive cost base is essential.
I hope Rob McDonald the present CFO is appointed to replace Rob Fyfe. He is really the brains behind the business and has his finger on the pulse - knows all the details as you would expect. Fyfe often defers to him in analyst questioning and generally seems less in touch with the operations of the business. I'm not a expert on being a CEO and I guess his focus is more on strategy, culture, and who knows what else but my feeling is that NZ needs an operator to squeeze every dollar of profit out of it. As we know with Airlines it can be like blood from a stone. But who better than a aviation wise accountant who knows everything about the company already.
Let us pray they don't bring in some fool who doens't understand NZ culture values and what makes AIR special.
Wow just read the announcement - sorry to be spamming the thread. Fyfe will step down in 2013.
http://theflyingsocialnetwork.com/archives/992
And folks - it seems like I called it re Rob McDonald based on:
"Rob has also been clear with the Board that he did not want to become a road block to the career aspirations of the executive management team and the decision to leave at the end of this year will create an opportunity for growth and renewal within that team at Air New Zealand"
"we believe there are some very strong candidates from within Air New Zealand’s existing executive management team"
Both quotes - Chairman NZ
Yes the rumour been around for a while now and I think Mr Market has known this and it is already factored in to the shareprice.
AIR currently down 1c to 90 (-1.1%) but thats more likely due to investor reactions to the "European noise" as the NZX50 index is down -0.6%.
However............. it disgusts me to read it in the Newpaper before the official shareholders announcement at 10.05am today....Come-on you guys at the NZX show some respect for the shareholders..they should officially know before it hits the press.
Quite so, but are you sure that it's the NZX at fault here?Quote:
However............. it disgusts me to read it in the Newpaper before the official shareholders announcement at 10.05am today....Come-on you guys at the NZX show some respect for the shareholders..they should officially know before it hits the press.
Do we know when the company advised the NZX?