AIR - Air NZ.

**777** · 02-03-2017, 12:57 PM

Any capex reduction is short term. If they are going to continue to grow then new aircraft are going to be needed along with older ones replaced. The 777-200's are all over 10 years old now.

**Robomo** · 02-03-2017, 01:24 PM

Originally Posted by 777

Any capex reduction is short term. If they are going to continue to grow then new aircraft are going to be needed along with older ones replaced. The 777-200's are all over 10 years old now.

The 777-200 should be good for 20 years - well maintained and being long-haul will not have been subject to a high number of takeoffs and landings. From memory the first of these was delivered about 2004 so replacement won't be happening till close to 2024 (7 years away).

ANZ originally ordered 8 787s with options on a further 8. They have 9 now with another three to come. I'm betting that the 787s will eventually replace all eight 777-200s (similar pax load and range with much better operating costs) so by 2027 we'll have 20 of the 787's. Then the seven 777-300s will be due to be replaced, possibly with 777x. Not to mention the twenty three, 49 seat Q300s that will probably need replacing mid 2020s.

So, ANZ will have a relative capex holiday from 2019 - 2024, then it's all on again! Or that's what I'm picking!

**Beagle** · 02-03-2017, 01:42 PM

Originally Posted by Arbroath

I personally don't think many analysts and some posters here are grasping what AIR management have been quite clear about. They intend to pay a "sustainable" dividend which barring a major shock to me is 10cps every 6 months until probably 2019 at which point, all things going well, they might do a special of 15-20cps as the capex falls off a cliff as long as FCF remains strong. That's my take.

No cuts, no increases....just a very satisfactory 10cps every 6 months.

Bingo. They actually went slightly outside their self imposed 45-55% gearing range (55.9% as at 31 December 2016) to maintain the 10 cps interim on the basis that we're starting to close in on a huge capex holiday in two years time. I am fully expecting a final of exactly 10 cps this year, nothing more regardless of the fact that I think the upper end of their updated forecast range ($525m) is easily beatable. Northing wrong with the divvy yield at 20 cps per annum fully imputed, I think I calculated it yesterday at 11.6% gross. As long as its sustainable, and I believe it is, who can complain about that sort of return in a low interest rate environment !

Originally Posted by Robomo

The 777-200 should be good for 20 years - well maintained and being long-haul will not have been subject to a high number of takeoffs and landings. From memory the first of these was delivered about 2004 so replacement won't be happening till close to 2024 (7 years away).

ANZ originally ordered 8 787s with options on a further 8. They have 9 now with another three to come. I'm betting that the 787s will eventually replace all eight 777-200s (similar pax load and range with much better operating costs) so by 2027 we'll have 20 of the 787's. Then the seven 777-300s will be due to be replaced, possibly with 777x. Not to mention the twenty three, 49 seat Q300s that will probably need replacing mid 2020s.

So, ANZ will have a relative capex holiday from 2019 - 2024, then it's all on again! Or that's what I'm picking!

It wouldn't surprise me if they went to an all Dreamliner widebody fleet if the price is right. As you will know they have nine online now and have leased another one coming in Fy19 and in addition have another three coming in the next couple of years, (total 9 owned now, three confirmed coming and one leased) but I believe they have another 6 exercisable options, (possibly at pretty attractive prices). I think they'll exercise those options in due course and end up with a fleet of 18 owned Dreamliners with any others required being leased. Having just the one type, (fleet simplification taken to the next level), of a really efficient medium sized aircraft like that for long haul seems to make a lot of sense to me for the size of the company and the routes involved. This would have the additional benefit of providing a consistent uniform experience right across the long haul.

**allfromacell** · 02-03-2017, 04:49 PM

Decided to take some profit and sold 1/3 of my holdings for $2.445. Still holding long term but feel the SP has got a bit ahead of itself.

**bonmaklad** · 02-03-2017, 05:44 PM

Originally Posted by Raz

Why not take a mixed approach..you can take the dividend and more in the price movement for at least part of you parcel if you are happy with the payout.

Need to think about it over the weekend. I believe we will hit $3. However I do not know how long this will be.

**dobby41** · 03-03-2017, 08:24 AM

Originally Posted by bonmaklad

Need to think about it over the weekend. I believe we will hit $3. However I do not know how long this will be.

LOL - I believe it will hit $5 - maybe 20 years from now.
Of course it will hit $3 sometime (unless they go out of business).

**winner69** · 03-03-2017, 08:50 AM

Originally Posted by dobby41

LOL - I believe it will hit $5 - maybe 20 years from now.
Of course it will hit $3 sometime (unless they go out of business).

How about $3 by end of April - a bit more specific

That be when Chris upgrades guidance ......and his halo will become so bright they turn the lights off at HQ. how times have changed - less than a year ago management sucked and were useless.

**bonmaklad** · 03-03-2017, 09:29 AM

Originally Posted by winner69

How about $3 by end of April - a bit more specific

That be when Chris upgrades guidance ......and his halo will become so bright they turn the lights off at HQ. how times have changed - less than a year ago management sucked and were useless.

IfIcometotheideathatit'saprilaswell...thennowayIsh ouldsellhaha