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Quote:
Originally Posted by
Roger
Hi Skid,
I understand where you're coming from, especially since I'm a big bloke but the vast majority of the world's airlines are moving to a pitch of about 32 inches in economy if they aren't there already. They're really caught between a rock and a hard place. As far back as I can remember, (I'm coming up 53), if you waited for a good special you could fly to London return for just on $2,000 plus taxes. Decades later the sale price is the same or very similar despite a massive increase in costs and this is what the general public wants. How many other products or services can you name that are the same nominal price as 25 or 30 years ago despite the effects of inflation over all those years ? I can't think of any !!!!!
Can't remember if you're experience was on a 777-300 or the older 200 series but I believe AIR are spending about $100m refurbishing the 777-200 fleet.
If you want luxury you need to ante-up for premium economy or business class. The other day AIR had a business class special on the new Dreamliner to Perth for $1,199 each way. It crossed my mind to have a ride just for the heck of it but time doesn't presently allow. You get what you pay for mate and the public generally want cheap prices.
I believe air travel on a relative basis to what it has been over the years is very very cheap and there's a tidal wave of baby boomers who are pleased their kids have finally left home and now have disposable income and want to stretch their horizons. ( I acknowledge my own circumstances might affect my perspective) :)
Im not sure which 777 it was-and Im not sure if Thai is a dieing breed with their roomier seating--but it was nicer--most seem to think that AIR is a good value so who am I to disagree--All Im saying is that if other airlines have roomier seating people are going to start to wonder why they are paying premium prices for budget type seating--Maybe its a SE Asia thing with Singapore up there as well (ok we wont mention MAL-but that was just bad luck-could of happened to any airline)
It would be interesting to compare the seating arrangement of all airlines-theres probably a website that does this.
Everyone needs to compete--you either cut costs (or increase seating -maybe skimp a bit on the meals) or you increase passenger numbers.
It cost us a fair amount to fly to Vancouver(and on to Montreal)(air Canada sucked ,by the way)
I also paid a bit more than normal for our THAI flight (used to always go for cheapest sales) That bit extra (it was still economy and a sort of sale )made a world of difference with Thai--With AIR.....well....
But like I said the plane was full so the dosh came in (at least in the short term) and of corse management is of key importance.
Airlines are not really my thing for investing--you can call them boring blue chip-but its a volatile industry as we have seen lately,but good luck to all who have invested--being a habitual traveler (just spent 3 weeks riding a motor bike around Northern Thailand with the basics strapped on)-I couldnt do without them.
wish I could have stayed longer but had to come back for several reasons,one of which was to apply for my pension.
One thing about riding around in a country like that (often in the middle of nowhere ) is the realization of how privileged but crazy our life here is.
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Quote:
Originally Posted by
skid
...It would be interesting to compare the seating arrangement of all airlines-theres probably a website that does this.
Try this one on for size Skid: http://www.seatguru.com - would be interesting to see the numbers on the difference in seating between Thai and AirNZ.
The motorbike safari sounded like a blast. Fingers crossed I have the health and resources for similar adventures when I'm ready to step out of the rat race.
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Heres one i found after just a quick check
http://www.airlinequality.com/Experi...lass_seats.htm
And yes in terms of the motorbike adventure--Im Hooked
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For aircraft aficionado's here's the goods on a the new super efficient 70,000 lb thrust Rolls Royce Trent 1000 engines AIR have chosen to power their Dreamliners
http://www.rolls-royce.com/civil/pro...ft/trent_1000/
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LOL $2.23 now, you owe me a beer :D Worked out what you're going to spend your $3K divvy on yet ?
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Finally this puppy is in full afterburner ascent :D
https://www.youtube.com/watch?v=pIz0-_aho6o
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Quote:
Originally Posted by
NewGuy
well this is going well so far. In at 2:17 on Wednesday. Hoping we can get to 2:30 before it goes ex.
I was targeting a 227-229 exit next Tuesday, however after today's price action I think we may get to 235, especially if US markets play ball.
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New Zealand Set For Tourism BOOM !!
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Quote:
Originally Posted by
JohnnyTheHorse
I was targeting a 227-229 exit next Tuesday, however after today's price action I think we may get to 235, especially if US markets play ball.
I will be very tempted to flick of a good sized block of mine I got at $2 if the price exceeds $2.30 before going ex, that's double the divvy amount and it may drop more than 15c after the ex date hmmm decisions decisions.
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Quote:
Originally Posted by
couta1
I will be very tempted to flick of a good sized block of mine I got at $2 if the price exceeds $2.30 before going ex, that's double the divvy amount and it may drop more than 15c after the ex date hmmm decisions decisions.
AIR has the lowest PE of any of your stocks mate....food for thought ?
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Quote:
Originally Posted by
NewGuy
I really wouldn't recommend this to be perfectly honest. Given the strength of the stock, I'd be surprised if it didn't revert back to the pre-ex date SP level within a week or two. Why, then, give away a hearty divvy?
I concur with this. Based on their performance of late, I suspect you will see some offshore buying pushing it up after ex-div.
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Quote:
Originally Posted by
couta1
I will be very tempted to flick of a good sized block of mine I got at $2 if the price exceeds $2.30 before going ex, that's double the divvy amount and it may drop more than 15c after the ex date hmmm decisions decisions.
Mate all the evidence suggests that most stocks recover most of their dividend within a few weeks and in this case we are talking about fully imputed dividends of 15.5 cps so its a whopper.
Each block of 7,000 shares is over $1,000 dividend in your hand...why give that away to someone else ?
Also have a good read through the annual shareholder review that's just arrived in the mail, (I am happy to e.mail you a link if your haven't got yours yet), things look very encouraging for AIR and as mentioned earlier the stock is very cheap on an earnings basis. PE is less than 10. Selling what I would argue is perhaps the best stock you own for medium term capital growth, just because you're ahead is not the way to mitigate losses on your other holdings.
In my opinion this sideways market we have now is about fundamentals, buying good quality companies on realistic price earnings multiples which pay good dividends and enjoy good growth prospects. I've had a really good look through the annual accounts now and there's no fish hooks I can see and the company has heaps of imputation credits in its account so is in a position to attach full imputation credits to dividends for many, many years to come. The new Dreamliner that I've posted heaps of info about is a real game-changer and they have 9 more on order, (2 of which are due before Xmas), with options for another 8 which I expect they will exercise. This new plane gives them a genuine marketing edge regarding the quality of their flight experience going forward. AIR is my #1 pick for market outperformance in the medium term.
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I'm having a conversation by PM with a gentleman who's quizzed why I think a PE of under 10 is very good buying for AIR and as part of that I've analysed the average PE AIR has traded at for the last 5 years which I thought seeing as I've done the analysis I would share for everyone's benefit.
Looking at the current financial statements, five year summary, (page 55 of the 2014 financial statements) we have
Basic EPS of 23.8 cps for 2014 which on a closing SP for the year of $2.08, (30 June 2014) = a PE of 8.7
Basic EPS of 16.5 cps for 2013 which on a closing SP for the year of $1.49 (30 June 2013) = a PE of 9.03
Basic EPS of 6.5 cps for 2012 which on a closing SP for the year of $0.86 (30 June 2012) = a PE of 13.2
Basic EPS of 7.5cps for 2011 which on a closing SP for the year of $1.12 (30 June 2011) = PE of 14.9
Basic EPS of 7.6 cps for 2010 which on a closing SP for the year of $1.07 (30 June 2010) = a PE of 14.07
Average PE over the last 5 years is thus 11.98, call it 12.
In my view under 10 is good buying in general and all the more so with exceptionally low international and local interest rates pushing the average market PE of the NZX to around 18. PE's have become somewhat stretched all around the world as a result of long term interest rates being at record all time lows.
In addition AIR is very cheap on a relative PE basis to all the major airline stocks I've looked at.
Hope that helps people come to their own conclusions regarding whether the current PE is cheap or not.
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For what's it worth the Morningstar 1 pager has these PE numbers. June price and trailing earnings as I understand the words attached.
June 2006 through June 2014 and last number being Sept 2014
8.6 / 11.6 / 5.3 / 6.0 / 12.5 / 14.8 / 13.7 / 9.0 / 8.1 and currently 8.9
Average of 10.0 (not counting current figure, only June years)
Inflated PEs when earnings dipped post GFC in 2010 thru 2012
Seems in normal times a PE of 10 is what the market thinks AIR is worth
The exercise for you now Roger is what were say 1 or 2 year shareholder returns when PE was below average
Geek note: sometimes 5 years is only a half cycle and gives funny numbers. I prefer looking at such things over at least one full cycle
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Any way you slice and dice this thing AIR is cheap on an average PE basis at present, most especially so in a post GFC ultra low interest rate / generally higher prevailing PE environment.
Quote:
We remain very focused on continuing to build on our earnings momentum of the last three years.
Nothing is taken for granted, and we will be relentless in pursuing opportunities to further improve this iconic company for our investors, our customers and our people.
We have a very exciting year ahead.
Concluding remarks from Christoper Luxon CEO in the annual shareholder review.
Does that sound like management have the right idea or what !!
Even at $2.24 the stock will be at a theoretical ex price of $2.085 this Wednesday. Notwithstanding the recent recovery in price on an ex divvy basis it still looks very cheap and I'm very happy to hold :)
I would buy more if I wasn't already pushing the boundaries of my self imposed 20% limit for any one stock.
P.S. W69 I haven't got info further back than five years but its interesting to note that in 2012 and 2013 when the PE was below average total shareholder return was 72.7% and 40.1% respectively, (source 5 year statistical review page 55 2014 financial statements).