Originally Posted by
Traderx
Hi all
A little confused by this move,
-VAH sp is at recent lows
-What "alternative uses of capital" are there? (that we are being prevented from taking up in any case?) Code speak for we are totally underwhelmed by the return on capital we're getting.
-What has changed since the minority investment was taken up (as to its desirability) Any way you slice and dice it the financial performance of VAH by any measure compared to almost any other airline in the world is most underwhelming
-While Air NZ "Remain commmitted" to the alliance doesn't this move raise the possibility of losing it in future (i.e control of VAH is gone) Possibly but the alternative is potentially far worse...another few hundred million dollars Australian into an un-proven performer that AIR's board appear to have lost confidence in
-Isn't the VAH aliiance a strategic pillar for Air NZ? No, much as one said its a beachhead, its not in my opinion.
I'm hoping that AIR has a specific buyer lined up for the stake, at a very high premia, with guarantees for alliance longevity and an excellent alternative capital utilisation plan, rather then just change for change sake. I wouldn't hold your breath on that front.
First big test for Mr Luxon's strategic nous, he's great at the operational efficiency game, now we'll get to see what the long term vision really is.. I'd say he's passed already. He's prepared to accept the strategy with VAH in its present form isn't working. Mark of good leadership is to admit your mistakes, fix them and move on.
Interesting times. Airlines are a fascinating investment and its always interesting
disc - small long, Likewise with a bias too the upside