Qantas just replacing 2 existing 737 flights with A330. Only makes up for half the capacity lost from the A380
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From listening into the presentation :-
Over 280 internal parts now 3D printed at a quarter the cost of OEM parts
Reduced inventory, reduced obsolescent inventory, speeds up delivery, average 3D part print time 8 minutes.
CASK improvement forecast a bit flat in FY 18 due to delay in A321 neo
CASK improvement regaining down track in FY19
Fleet simplification driving CASK savings very well
777-200 refurbishment complete
777-300's getting a refresh now
Customer lounge upgrades very well received, half way through now
Dreamliner efficiency 20-25% better than 767's on a ASK basis
787-9 Code 1 - 9 Dreamliners configuration ideally suited to Asian / Tasman markets
787-9 Code 2 4 Dreamliners remaining on order will be spec as 54% more premium seats to U.S.
A321 Neo coming - 27% more seats at only a fraction more to operate than standard A320. To be deployed on larger leisure markets, leverage utilization as much as possible
Rob Mcdonald - CFO
Profitable growth is the focus
Only now understand critical international financial strengths that are durable and playing to that
Gearing is a guideline only 45-55%, comfortable with being at top of range at moment as capex program comes to a conclusion
Emergence of strong free cash flow looking ahead
Cost of debt continues to reduce, lower margins for new debt coming on board, no covenants on debt, debt is attractive to investors due to strong credit rating
Delay in A321 due to engine issues, delay was pushed out further at AIR's request to take advantage of new configuration with more seats, leases on some current aircraft easy to cope with delay's to neo A320 and neo A321
New seats on hand now, (seats often a reason for aircraft delay'(s)
$170m capex lower in FY18 due to aircraft delay's, (a good thing according to Rob Mcdonald.
Hedging gives us time to adjust our business model.
Looking at fleet replacement program for 777-200 starting from FY22...looking at request for information from manufacturers later this year.
Hedging gives us time to adjust our business model
Excellent liquidity still at top of range despite big special last year, may buy some aircraft outright to being this down to normal level's. (no talk of special divvies to hand out liquidity to shareholders).
Goal of maximizing ROIC over 15%
Consistency of dividend across the cycle their #1 aspiration - medium term focus
Truck loads of imputation credits on hand
Chris Luxon:-
We're constuctivly dissatisfied and there's a lot more to do in the business.
We have a very strong core domestic business
We have a very strong loyalty proposition
Pacific rim focus of network.
Well positioned, all markets profitable
De-risked our business by partnering with other outstanding airlines
Relentless daily focus about cost reduction
Very strong investment grade balance sheet.
Competitors now behaving more rationally.
Improving revenue environment.
We are done with acquisitions !! ( My read, special divvies are a given FY20-FY22 all things being equal if the market remains normal)
Low staff churn. Pilot poaching is not a big issue for AIR. We're proud of our pilots, they have a clear flight path ahead for progression within AIR.
5 year focus in thinking regarding profitable growth.
I'm speaking from a dividend yield perspective, removing specials. In answer to your question though, I'd say ATM would fit the bill. Regardless of all that, I simply wouldn't have held from $2.29 to $2.985, so it isn't really relevant to myself. I sold my holding early in order to even out income years somewhat, as the Air divvy was paid in March and I didn't want any more divvies in that financial year.
Amazing how things can change so quickly.
Still I agree with Couta. The SP was around $3 when AIR was at record profits. How much further can it go? Probably another 10% but there's a bit of risk at the current SP too.
brought in about yr ago at 2.30 got the special divs + div , brought at 1.75 lots + more divs just sold the remainer of my shares reckon gains + divs = just over 100% gain in a yr so I thinks its difenetly one if not the best performing stock on the nzx wether it continues who knows but im departing the flight thx air nz for the great ride.
A superb presentation, clearly articulating their strategy going forward. Very impressively managed company.
Yep, a lot of toppy stocks on the NZX currently, however there is still SUM value to be found out there, for those happy to pay top dollar, that's their choice ,but I've been stung many times and had to sell for significant losses in the past, either that or wait years for the price to come back to your buy in average or not.