Originally Posted by
Jaa
Agreed the engine issues ironically will act as a buffer as will the drop in the oil price and NZD.
Lack of demand is not a good sign though. Any airline is highly vunerable to a drop in demand as they have high fixed costs and slim profit margins. Even currency and fuel costs are hedged to the high side. Air NZ used to be king at right sizing capacity to demand but they have been a bit slow under Luxon. Lots of costs you can't cut quickly too - staff, planes etc
The drop in demand could come from multiple angles.
* No Chinese tourists or students for a while obviously.
* General avoidance of flying and especially of long distance flights.
* Less tourists in Aus and NZ so less trans tasman passengers
* All combining to reduce the load factor on domestic routes
Disclosure: I sold down 2/3 of my stake, first time I've sold since I first bought in at $1.08 in 2008. Been a good trip, 37% return per year according to sharesight.