AIR - Air NZ.

[Zaphod]

For what its worth ,I just flew AIR from Vancouver to Auckland--When I went to the toilet just after take off,both cabinet doors were wide open and the light cover was laying on the floor--the first 4 hours were like sitting in a winter storm.......but it was full.

Welcome back.

I fly that route regularly and overall it is very well patronised in all classes for both directions. YVR makes a great alternative to LAX for onward Canadian domestic travel, or perhaps as an alternative (albeit less convenient to LAX) route on to Europe. AirNZ's soft and hard products are superior to what AC provide on YVR-SYD, so you'll also see a few passengers travelling on to Australia.

[grayman]

Corporate buyer finally got their volume together, took most of the day...
16:35pm volume 1,180,622 @ $1.95

Newbie here. I made my very first buy a little before that corporate trade. I've been looking at Air for a month or so now and with my limited knowledge and a bit of encouragement from this thread decided to go for it at 1.95.

Is that large buy at the end of the day considered a good thing for the stock? Even if the buyer plans on selling as soon as it's gained a couple cents.

[skid]

Welcome back.

I fly that route regularly and overall it is very well patronised in all classes for both directions. YVR makes a great alternative to LAX for onward Canadian domestic travel, or perhaps as an alternative (albeit less convenient to LAX) route on to Europe. AirNZ's soft and hard products are superior to what AC provide on YVR-SYD, so you'll also see a few passengers travelling on to Australia.

I might also add that the stewardess were commendable (just didnt like the physical plane much) It would be great to get a dreamliner in the works at some stage.
Air Canada sucked--the 'no meal'' policy on the National Carrier for a 5 1/2 hour domestic flight is just rubbish IMO.

[skid]

No debate nutters are nutters simply a comment on things not taking too long to sort out but yes I am pro Israel and proud of it

I know you are pro Isreal Couts--I think you are most likely a reasonable person,but i think it is one dimensional thinking to not consider the innocent (on both sides)

consider this paragraph


The media makes out like this is an intractable conflict between two equal warring parties, but it is not. Palestinian extremists' attacks on innocent civilians must be condemned and ended but the root of the conflict lies elsewhere -- in the dispossession of the Palestinian people. Israel currently occupies, colonises, bombs, raids, and controls the water, trade and the borders of a legally free nation that has been recognised by the United Nations. In Gaza, Israel has created the largest open-air prison in the world, and then blockaded it. Now as bombs fall, the families, literally have no way to get out.

[Beagle]

Newbie here. I made my very first buy a little before that corporate trade. I've been looking at Air for a month or so now and with my limited knowledge and a bit of encouragement from this thread decided to go for it at 1.95.

Is that large buy at the end of the day considered a good thing for the stock? Even if the buyer plans on selling as soon as it's gained a couple cents.

Congrats on your well timed purchase and welcome to the forum. Healthy volume is always a good thing. There's little doubt the Malaysian airliner was shot down by mistake and is a one off and the Israeli's and Palestine people have been going "at it" since time began and probably always will be so that's also almost irrelevant from an investment perspective. I think the correction has been overdone, (American Airlines, Delta e.t.c. have corrected nothing like AIR has), down 15% from $2.28. Good timing for the final divvy but put your seat belt on because there's lot of skittish investors around who appear for reasons best known to themselves to think the world is ending soon.

I might also add that the stewardess were commendable (just didnt like the physical plane much) It would be great to get a dreamliner in the works at some stage.
Air Canada sucked--the 'no meal'' policy on the National Carrier for a 5 1/2 hour domestic flight is just rubbish IMO.

Vancouver is an ideal route for the plane in my opinion. Digging around I saw some evidence yesterday that fuel savings are greater than the 20% Boeing had anticipated, Air Nippon have been getting 21% with their 787-8 and the 787-9 has even more efficiency and a super high tech tail fin from military technology that'll reduce drag even more compared to the 787-8 so the fuel savings are going to be fantastic for AIR as it gradually receives delivery of the ten 787-9's they have on order. Quite apart from that and perhaps more importantly, customer reaction to the Dreamliner from extensive survey's conducted by other airlines has been extremely positive.
Excellent cabin pressure, better humidity, very low noise level's and the massive windows have been extremely well received by passengers.
Air have options for another 8 as previously mentioned, total possible 18.

[Beagle]

No debate nutters are nutters simply a comment on things not taking too long to sort out but yes I am pro Israel and proud of it

I think its best to leave this debate for a different forum mate as with respect, this has nothing to do with Air New Zealand.

[Zaphod]

Vancouver is an ideal route for the plane in my opinion. Digging around I saw some evidence yesterday that fuel savings are greater than the 20% Boeing had anticipated, Air Nippon have been getting 21% with their 787-8 and the 787-9 has even more efficiency and a super high tech tail fin from military technology that'll reduce drag even more compared to the 787-8 so the fuel savings are going to be fantastic for AIR as it gradually receives delivery of the ten 787-9's they have on order. Quite apart from that and perhaps more importantly, customer reaction to the Dreamliner from extensive survey's conducted by other airlines has been extremely positive.
Excellent cabin pressure, better humidity, very low noise level's and the massive windows have been extremely well received by passengers.
Air have options for another 8 as previously mentioned, total possible 18.

AKL-YVR is certainly a route that's suited to the 787 and I too would love to see that aircraft scheduled on that service. Perhaps later flying on from YVR to a European destination such as FRA? I'd hesitate to create another LHR link albeit via Canada. I think most likely, once more aircraft arrive Air NZ will adhere to their original plan of one further North American destination such as ORD or DEN.

I wonder whether the Spaceseat will ever make an appearance on the 787? Personally I like that seat much better than the standard premium economy offering, but perhaps the floor area it consumes in the aircraft adversely affects yields?

[Hoop]

Newbie here. I made my very first buy a little before that corporate trade. I've been looking at Air for a month or so now and with my limited knowledge and a bit of encouragement from this thread decided to go for it at 1.95.

Is that large buy at the end of the day considered a good thing for the stock? Even if the buyer plans on selling as soon as it's gained a couple cents.

Hi Grayman welcome to ST

Let me tell you now, you got no encouragement from me with the timing to buy AIR on Friday..Don't get me wrong..AIR is a great company but at the moment the overall NZ equity market is going though a period of weakness...and for some unknown reason AIR has taken a bigger correction so far than the NZX50 index itself..maybe AIR's correction is overdone and will rise up from this 1.95 point or maybe this weakness still has some legs...Time will tell...

Now that you have these shares I feel from your first post that you are watching today's AIR's market with intensive interest...This is common newbie behaviour to follow shares very closely..but..it can produce unnecessary worry with just normal day by day fluctuations..

Purchasing shares for the first time opens up a new type of behaviour which to many may not have experienced before..

Buying for the first time creates some stress..buying into weak markets will create more anxiety than normal, so if you have some anxiety already at day one I suggest you google pucker factor or investor pucker factor so you can understand this type of stress/anxiety behaviour you are experiencing and try to understand your own behavioural limitations (we all have our strength and weaknesses)and then adopt an investment strategy to best suit your personal mental behaviour and attitudes..Many well educated people lose out unnecessarily because they failed to identify their weaknesses which then affects their decision making abilities later...e.g emotional selling..
To ease your concerns about your quote..."Is that large buy at the end of the day considered a good thing for the stock? Even if the buyer plans on selling as soon as it's gained a couple cents."

That wasn't a large order worth worrying about..nor worth analysing....rememember the saying "Don't sweat the small stuff"......Also, us plebs are not privy to the reasons of each small buyer/seller info only the highest of divine heavenly powers and the individual who traded have this info..Anyone on this forum who says the reasons why, only assume...there are some TA indicators which can pick up the much larger orders.. and some very unusual (big or small) trading behaviour can picked up by watching the depth info as it is released...The very big trades have to be disclosed to us shareholder through the NZX by those big traders.

This diagram below shows the volume and price near the end of the day (depth) and under that the last 6 month volume history...As you can see it was a normal day volume-wise ...the buyers found it easy to pick up shares at their price so the market was considered weak.

Hope you the best of investing Grayman
Hoop

[grayman]

Thanks for the advise and the welcome, I'll be sure to have a read. Perhaps I should of said some of the comments made it look like it could be a good time to buy instead of encouraged.

In any case it feels good to have something in the game. Definitely gives extra incentive to learn.

[modandm]

I think its best to leave this debate for a different forum mate as with respect, this has nothing to do with Air New Zealand.

+1

I have never seen the AIR thread so popular - but keep on topic

Welcome to the ownership registrar grayman. If your new to investing you have picked an interesting stock to start, but one I believe is significantly undervalued. Some wise words from Hoop too - though you will develop what works for you over time.

There have been two broker notes out in the past few weeks - one ominously titled 'nearing the peak', and the other from Marcus Curley, removing AIR from the conviction list, while maintaining buy.

The first piece is done by an analyst who applies a ROIC based approach to valuation and investment thinking. This is a well grounded and solid approach used by many successful investors. The analyst basically is neutral on the stock, arguing that it will struggle to earn its cost of capital over the long term. Air is currently trading near book value implying that it will earn its cost of capital. I don't find this approach useful for the purposes of investing in airlines, because many of the long term assumptions being made are poorly founded, and overly determinant on the outcome. Therefore i rarely take notice of this analyst. I prefer a multiples based approach using medium term analysis from the bottom up - i.e forecast the P&L. Anyway to tackle his specific view -in my opinion AIR has sufficient competitive advantages to over the cycle achieve average ROIC above WACC, and over the next few years growth will see both capital and ROIC rise nicely. Lots of cash also suppresses ROIC, so investing in productive assets (fleet), and in efficiency (technology), will see returns increase. This should come through in the stocks valuation over time.

I respect the work Marcus does, but am surprised by his recent note. He cites slowing earnings growth and higher fuel prices as justification for reduced conviction/upside. I track the price of fuel closely and have seen no material increase. Singjet continues to trade around c$120 USD per barrel, which supports my model input of $130 per barrel (into wing cost). I have a bloomberg terminal but you can use this to watch the price if you want to: http://www.iata.org/publications/eco...velopment.aspx

On his point about slowing earnings growth I would say hmm! After all AIR had 155% increase in FY13 and on track for 30% in FY14, clearly that is not sustainable. However I actually think FY15 could be better than FY14 growth (maybe 30-40%), after that it will be lower (maybe mid teens). Combined with a high dividend, and improving free cash flow (medium term) that is a pretty compelling story to me, and yet the stock is trading sub 9x earnings, and attributing no value to a $400m stake in VAH.

Given the recent fall a cynic might suggest he is reacting to short term volatility and concern, something patient long term investors should avoid doing - if you chose to be a TA trader that's your prerogative, but for mine investing is about careful thinking and analysis, then backing up you ideas with large investments.

The final operating stats for the FY14 year are out this week - a model update for you all to enjoy will follow in a few weeks time.

-mod