AIR - Air NZ.

[Marilyn Munroe]

About time someone in the airline industry calls a spade a spade. It is concerning how unreliable new planes and engines have become in the last 2-4 years and not surprising the World's largest airline has had enough.
Also Norwegian, with its large fleet of Dreamliners and MAX, fighting to stave off bankruptcy with emergency negotiations with bondholders after being very badly effected by the MAX issues on top of already big losses.

Tough situation for the industry https://www.nzherald.co.nz/business/...ectid=12265134

During peak oil prices airlines were screaming at engine manufacturers;

We want engines that can run on the smell of an oily rag,

We want them big and powerful so we can get away with only two engines on our big planes, and

We want it now.

Something had to give.

Boop boop de do
Marilyn

[nzspeak]

A new airport? in this day in age? baby boomers feel they have a the right to veto any construction within 100KM of their house. I was talking to a city planner recently, he called it democracy in action. Really it's just protectionism, no different the import taxes/quotas and it will probably last as long as the last baby boomer- at least another 20 years. The construction sector is like the labour market of the 1970s.

[see weed]

Yes it certainly is a fantastic yield in this era of interest rates at unchartered lifetime low's.
In terms of its sustainability. A few thoughts. At the last conference call they noted they had only cut the dividend twice in the airlines history, after 9/11 and the GFC.
Barring another one of those events or some similar sized exogenous shock I think there is a very high probability the dividend is sustainable for the foreseeable future.
Average analyst view is actually for it to increase to 23 cps next year and 24 cps in FY21 https://www.marketscreener.com/AIR-N...07/financials/

As you note, capex for the next 4 years is very benign, mostly about $500m but FY21 under $400m and well below annual depreciation of $567m for FY19 and forecast depreciation of approx. $637m for FY20, (extra $70m expected next year, source, just completed conference call). Over the next 4 years based on my analysis annual average capex is approx. $160m less than depreciation so that gives an interesting insight into their ability to pay ongoing strong dividends in the medium term.

I tend to back out any immediate term dividend, (as partial return of capital invested) from forward yield calculations so my "look through" view on the yield at $2.72 taking a medium term investment view is $2.72 less the almost immediate return of 11 cents = $2.61 net investment for the medium term. 23 cents fully imputed for FY20 = 23 / 0.72 = 31.94 cps gross and on a net investment of $2.61 = 12.2% Gross yield. I am a very happy holder at that level and added more this morning.

22/8/19. SP holding up with such a good yield. Have decided to not sell for a while and let it ride. Some of those power company buyers might come over for a higher yield.

[whome]

I think of the baby boomers as those born in the 50’s. NIMBY’s more likely to be the silver spoon generation from a decade or so later.

[whome]

Good repost, Seeweed, of Beagle’s AIR analysis, and a nice reminder of what really matters on ST. Posted from a beautiful Bure setting at Plantation Is, Fiji. Great to have some time to catch up on posts.

[winner69]

Think beagle flew Jetstar down south for his ski trip

No shareholder discount ...and when using divie money you still want best deal eh

Doesn’t matter who you fly with apparently it still takes the best part of an hour to get through security at Queenstown

[Beagle]

The Beagle has landed Chris likes me so I got free flights...or maybe it was just my airpoints lol.
Good week away and what a week on the market up over 4% !, makes us all look like genius's doesn't it !
Getting harder to find any semblance of value on the NZX but I feel there are pockets of value that have still been a little overlooked, unsurprisingly these are in stocks I already own, not that I'm biased even in the slightest
P.S. 5 minutes through Queenstown security and less than 1 minute at Auckland but I did get a "bonus" pat down at Auckland because I forgot to take my fancy gold watch off.

Even after the nice little rally in AIR over the last couple of weeks the gross forecast yield is still 11.2% at $2.86 ex divvy. Where else do you get a yield like that ?

[percy]

4%in one week.!!!
Perhaps we could all chip in for you to have more weeks away.?..lol.

[Beagle]

4%in one week.!!!
Perhaps we could all chip in for you to have more weeks away.?..lol.

Should have done that eh lol
Market falling now and although I'm back I can't be bothered doing any work.

[percy]

May have to get Couta1 to start a "Give a little" site/thread "Beagle needs another break."
Just so we all can enjoy another 4% boost to our portfolios...lol.