AIR - Air NZ.

[modandm]

Meanwhile in the land of the underarm bowler Federal Treasurer Joe Hockey has hinted that the Aussie Taxpayer may put money into Queer and Nasty Airlines.

Maurice Williamson had better dash down the corridor to the Minister of Transports office and tell him to unplug the fax machine right now. We wouldn't want the Aussie Government to queer the pitch in favour of their nationalised national airline like last time

Boop boop de do
Marilyn

Its a good point MM. I don't think the Aussies can do much to 'queer the pitch' as you say for Air NZ, but a stronger Qantas would be a negative for VAH.

I don't think its in VAH's best interest to keep the pressure on Qantas as it has been doing for too much longer. Maybe another 6 months - putting Qantas under pressure means Qantas can't invest as aggressively as VAH in new a/c and improving the customer experience - which all plays to VAH's strategy of taking market share.

If they carry on too long and put Qantas under too much pressure political action may result - so its a fine balance.

In the medium term, once the bloodbath is over both carriers are likely to start hiking prices, and reducing capcity growth in unison. This bodes well for improving profitability for both. I think both carriers will be making tidy profits in 3-5 years time.

[Marilyn Munroe]

Uh ooh! The fasten seat belts sign has just come on in the Cullen Airlines shareholders flight.

Standard and Poors has just downgraded Queer and Nasty Airlines to junk status.

Boop boop de do
Marilyn

[Marilyn Munroe]

Moodys has followed Standard and Poor's downgrading Queer and Nasty Airlines debt to junk status.

Will this create wake turbulence for Cullen Airlines?

Boop boop de do
Marilyn

[kyanar]

I'm seeing 5 mill shares on the sell side from 4 sellers today - volume seems a little excessive?

[Marilyn Munroe]

The response by Virgin(Underarm Bowlers Division) to an ASX price movement query makes for stimulating reading.

http://www.asx.com.au/asx/statistics...idsId=01489284

I hope the Virgin ground proximity warning radar device in the Cullen Airlines boardroom is active: "WHOOP WHOOP, Pull Up, WHOOP WHOOP, Terrain, WHOOP WHOOP, Pull UP WHOOP......"

Of course I could be worrying for no good reason, after all a kiwi Airline loosing its shirt in Aussie has happened before so I'm sure the Cullen Airlines board are watching carefully.

Memo to John Key and long suffering Kiwi taxpayers; sell the lot to Etihad.

Boop boop de do
Marilyn

[Marilyn Munroe]

The airflow providing lift for Cullen Airlines ambitions in Aussie could become a lot more turbulent

Federal treasurer for the underarm bowlers Joe Hockey is talking about Aussie taxpayers guaranteeing Queer and Nasty Airlines debt.

http://www.smh.com.au/federal-politi...213-32jxc.html

Could this mean Cullen and Queer and Nasty airlines will become entangled in a dog fight over the Tasman Sea with the ammunition paid for by the taxpayers of either country?

Memo to John Key; sell the lot to Etihad.

Boop boop de do
Marilyn

[modandm]

so AIR reports half year today. Should be little surprise as they gave guidance of 20% increase in PBT in December.

What will be interesting is the dividend. I am hoping a special will be announced. They are in a very strong position and have saved up some imputation credits that could easily be utilised.

They should be on track to deliver just over 20c eps this year, with a 60% payout ratio that means 12c in divs or about 7% yield. To get there they need to hike the first half div to 5c I think.

Continue to hold tightly, I see the stock trading on about 2.35 in a years time, which is 9x my FY15 eps estimate of 25c. Should get some healthy dividends too so c.40% return potentially.

Lots of new aircraft and capacity increases in FY15 to get excited about.

Cheers

[slimwin]

29% increase in earnings. 4.5% div.

[Schrodinger]

Great result. Can they maintain the good performance? If you look at history this industry tends to boom bust regularly. What is interesting is that will the new fuel efficient planes change the boom bust cycle?

I tend to follow other more knowledgable people in this sector (Buffett) who says airlines make a poor investment. However his observation in generally based on the hard and fast rules of the industry that people, planes and fuel are the major expenses and travel is a luxury good. If fuel efficient planes take out a major cost can legacy industry dynamics change and make this a consistent earner?

I tend to look at this from a long term perspective. I am sitting on the "wait and see" before passing judgement.

[freddagg]

Great result. Can they maintain the good performance? If you look at history this industry tends to boom bust regularly. What is interesting is that will the new fuel efficient planes change the boom bust cycle?

I tend to follow other more knowledgable people in this sector (Buffett) who says airlines make a poor investment. However his observation in generally based on the hard and fast rules of the industry that people, planes and fuel are the major expenses and travel is a luxury good. If fuel efficient planes take out a major cost can legacy industry dynamics change and make this a consistent earner?

I tend to look at this from a long term perspective. I am sitting on the "wait and see" before passing judgement.

When it comes to AIR Modandm is the most knowledgeable person I know. He is heavily invested in AIR and does quality research.