AIR - Air NZ.

[winner69]

Dont want to bring out the "Dont invest in airlines piece" but I think thats behind the 10 PE currently.

Roger been sort of nagging me to buy into AIR knowing I don't invest in airlines

I'm have that feeling that if I changed my mind (and Roger puts up a compelling case to do so) and bought into AIR the new Dreamliner would crash and hundreds of people would die (with a disasterous impact on the shareprice). I couldn't live with that so no AIR or any airlines for me.

[Beagle]

Dont want to bring out the "Dont invest in airlines piece" but I think thats behind the 10 PE currently.

But if they grow underlying after tax earnings by 30% again this year then the stock goes from a trailing underlying PE of 9.28 to a forward PE of 7.13, (203.5 / 28.52 cps)...or we could see a bit of PE expansion as the market becomes comfortable AIR can execute its significant medium term capacity expansion successfully and we could see $3.00 a share and still be on a modest PE of 10.5

[Beagle]

Roger been sort of nagging me to buy into AIR knowing I don't invest in airlines

I'm have that feeling that if I changed my mind (and Roger puts up a compelling case to do so) and bought into AIR the new Dreamliner would crash and hundreds of people would die (with a disasterous impact on the shareprice). I couldn't live with that so no AIR or any airlines for me.

LOL Your loss mate, you haven't got Wall Steer with Gordon Gekko 's airlines advice playing on a continuous loop have you . I'll be enjoying a few drinks in CHCH after the AGM and spending some of my multi thousand dollar divvy payment and spare a thought for poor risk averse investors, your good self included or you could come along to the CHCH sharetrader meeting after the AGM and I'll buy you a beer Here's a thought for the day. ALL companies face serious commercial risk.

[Schrodinger]

Umm Roger you need to factor in a high risk premium for the industry they are in.... I would expect high returns when conditions are in their favour. Being a longer term investor I want to know this company will be around in the long run. What is in favour of AIR is the NZ govt (taxpayers) who will bail out this airline anytime it gets it wrong. Still this doesnt answer the capital gain piece and can AIR turn $330M into $500M+ compounding over the next ten years. Other considerations include the relativer closed domestic market which will limit growth and a resurgent Qantas (will happen). Looking at the recent numbers the international piece is underperforming and there is growth there but is growth capped at a certain capacity. I know this is not like retailing, but a new retail chain can add hundrerds of stores which multiplies scaling-AIR will need to rely on extra services to a limited domestic market. Thats the modelling you should be looking at if you are thinking of investing.

Where I think their industry is currently at a cross roads is the new planes and when the market turns do the new planes enable airlines to stop going out of business? This is very important for larger passenger markets and if the airlines move from being bankruptcy prone to weathering downturns like other industries then this sector could be viewed differently. Havent researched enough to run the numbers on these scenarios.

[winner69]

LOL Your loss mate, you haven't got Wall Steer with Gordon Gekko 's airlines advice playing on a continuous loop have you . I'll be enjoying a few drinks in CHCH after the AGM and spending some of my multi thousand dollar divvy payment and spare a thought for poor risk averse investors, your good self included or you could come along to the CHCH sharetrader meeting after the AGM and I'll buy you a beer Here's a thought for the day. ALL companies face serious commercial risk.

I could manage and live with the risk losing cash....it's just the hundreds of dead I couldn't live with

Just don't want to tempt fate. My experience over many years when I have these premonitions it generally happens

[Beagle]

Risk is already factored into the low PE which is even lower than notoriously cyclical PGW. Very comfortable for the medium term

[Marilyn Munroe]

ALWAYS looking for a negative, never seems to be a balanced or objective comment... seriously why do you bother contributing ?
Is it so hard to have a positive word for the work the directors and staff have done...

OK here is something positive. I flew over the ditch recently with Cullen Airlines. Managed to score an emergency exit row which meant more leg room than is usual in thrombosis class and as a bonus the middle seat was empty.

The aircraft was was modern, the staff pleasant, and the seat back entertainment screen is a nice feature.

While I am handing out bouquets in tourism and travel I found the staff at Queensland Rail pleasant and helpful. Goodonya.

Boop boop de do
Marilyn

[Beagle]

OK here is something positive. I flew over the ditch recently with Cullen Airlines. Managed to score an emergency exit row which meant more leg room than is usual in thrombosis class and as a bonus the middle seat was empty.

The aircraft was was modern, the staff pleasant, and the seat back entertainment screen is a nice feature.

While I am handing out bouquets in tourism and travel I found the staff at Queensland Rail pleasant and helpful. Goodonya.

Boop boop de do
Marilyn

Now you can take two Panadol, a glass of wine and go and have a lie down as I can tell that comment hurt you as it came out

[Arbroath]

I'm very happy I bought shortly after the Govt sell down at $1.69. Have always been risk averse with airlines for the reasons Winner mentions. No airline is really immune from what has happened to Malaysian Airlines but with Air NZ they do have an almost monopoly domestic position and the economics of ordering new fuel efficient planes ahead of competitors is a virtuous circle from a competitive perspective.

Already had a 4.5c dividend and another 15.5c coming shortly. Agree with Roger the low PE factors in the risks more than adequately. If they deliver more growth in the next 12 months then $2.80-$3 is realistic. Do agree Qantas will be stronger again at some point in the next few years so I'd more likely be a seller near $3 than buying more.

[Beagle]

http://www.nzherald.co.nz/business/n...ectid=11315188

Air New Zealand Flying High

http://www.nzherald.co.nz/technology...ectid=11314650

747 - Is it's number up ? Well worth a look at this nostalgic reflection upon the queen of the skies.

FINALLY - a couple of articles from the herald that are actually worth reading although I would hasten to add that I don't agree with regional fare comments. According to AIR regional airfares have only moved 1% over the last five years and the company has faced substaintial increases in fuel, landing fees and other fees. If regional was so profitable how come Jetstar don't expand their network...

Worth noting that the N.Z. Govt have received just over $90m in tax payments in the last year and by the time the final divvy and special are paid by my calculations they will have received $117.9m in dividend payments from their 53% stake, that's more than $200m going into their coffers.

Also staff are all getting a $750 bonus, (notwithstanding that some senior pilots are exceptionally well paid already).