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05-02-2020, 03:02 PM
#15271
The first announcement by AIR regarding the RR engine issue mentioned that they hoped to have the issue resolved by about April-May 2018, (issue first arose in late 2017 if I remember correctly).
WOW....talk about a problem dragging on !
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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05-02-2020, 03:14 PM
#15272
Agreed the engine issues ironically will act as a buffer as will the drop in the oil price and NZD.
Lack of demand is not a good sign though. Any airline is highly vunerable to a drop in demand as they have high fixed costs and slim profit margins. Even currency and fuel costs are hedged to the high side. Air NZ used to be king at right sizing capacity to demand but they have been a bit slow under Luxon. Lots of costs you can't cut quickly too - staff, planes etc
The drop in demand could come from multiple angles.
* No Chinese tourists or students for a while obviously.
* General avoidance of flying and especially of long distance flights.
* Less tourists in Aus and NZ so less trans tasman passengers
* All combining to reduce the load factor on domestic routes
Disclosure: I sold down 2/3 of my stake, first time I've sold since I first bought in at $1.08 in 2008. Been a good trip, 37% return per year according to sharesight.
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05-02-2020, 03:36 PM
#15273
Originally Posted by Jaa
Agreed the engine issues ironically will act as a buffer as will the drop in the oil price and NZD.
Lack of demand is not a good sign though. Any airline is highly vunerable to a drop in demand as they have high fixed costs and slim profit margins. Even currency and fuel costs are hedged to the high side. Air NZ used to be king at right sizing capacity to demand but they have been a bit slow under Luxon. Lots of costs you can't cut quickly too - staff, planes etc
The drop in demand could come from multiple angles.
* No Chinese tourists or students for a while obviously.
* General avoidance of flying and especially of long distance flights.
* Less tourists in Aus and NZ so less trans tasman passengers
* All combining to reduce the load factor on domestic routes
Disclosure: I sold down 2/3 of my stake, first time I've sold since I first bought in at $1.08 in 2008. Been a good trip, 37% return per year according to sharesight.
Agreed. What parents are going to risk their children's health and book a long haul vacation for the family right now ?
Most people are risk averse and will simply choose a holiday in the own country.
Last edited by Beagle; 05-02-2020 at 03:39 PM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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05-02-2020, 03:45 PM
#15274
Drop off in demand could make the special jet setters happy
https://www.stuff.co.nz/business/ind...y-heavy-demand
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
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07-02-2020, 10:24 AM
#15275
Aircraft where people sit jam packed together like sardines and breathe each others air for hours on end are the "perfect" breeding ground for this new virus. Don't be shocked when AIR finally come out and admit this is having a profound effect on their entire network.
I would think its quite likely that AIR will cancel its Hong Kong flights in the very near future or dramatically scale them back as what's the point of flying with near empty aircraft ?
I think AIR is a "SELL" at the current price in this environment. If I was into shorting stocks, (I'm not), of all the stocks on the NZX I would choose this and THL.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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07-02-2020, 10:46 AM
#15276
Originally Posted by Beagle
Aircraft where people sit jam packed together like sardines and breathe each others air for hours on end are the "perfect" breeding ground for this new virus. Don't be shocked when AIR finally come out and admit this is having a profound effect on their entire network.
I would think its quite likely that AIR will cancel its Hong Kong flights in the very near future or dramatically scale them back as what's the point of flying with near empty aircraft ?
I think AIR is a "SELL" at the current price in this environment. If I was into shorting stocks, (I'm not), of all the stocks on the NZX I would choose this and THL.
Jetstar has announced discontinuation of both Melbourne and Sydney to Hong Kong routes and Cathay Pacific has asked all if its 27000 staff to take 2-3 weeks of unpaid leave. So I think you may not be too far off with your prediction Beagle.
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07-02-2020, 10:50 AM
#15277
AIR took a jump yesterday on ASX and currently up 9.5c today wonder if GS transportation earnings report had anything to do with jump............
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07-02-2020, 11:53 AM
#15278
Originally Posted by iceman
Jetstar has announced discontinuation of both Melbourne and Sydney to Hong Kong routes and Cathay Pacific has asked all if its 27000 staff to take 2-3 weeks of unpaid leave. So I think you may not be too far off with your prediction Beagle.
$2.85 today...you'd want your head looked at paying that. Fabulous shorting opportunity as partial insurance against the rest of one's portfolio.
One more drama for AIR to endure. Massive landing fees paid and they get this... https://www.nzherald.co.nz/business/...ectid=12306688
Last edited by Beagle; 07-02-2020 at 11:58 AM.
Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”
Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine
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07-02-2020, 02:22 PM
#15279
Originally Posted by Beagle
$2.85 today...you'd want your head looked at paying that. Fabulous shorting opportunity as partial insurance against the rest of one's portfolio.
One more drama for AIR to endure. Massive landing fees paid and they get this... https://www.nzherald.co.nz/business/...ectid=12306688
Good point, but might indicate as well that AIA is woefully overpriced. They might not for ever get away with charging premium landing fees for quite inadequate service and might therefore need to reduce their prices and concurrently increase their investment.
----
"Prediction is very difficult, especially about the future" (Niels Bohr)
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07-02-2020, 03:28 PM
#15280
Seems that perhaps AIA have been investing in all the other 'stuff' for a better "customer experience" while all the time their main asset i.e. the runaway, is neglected, won't help any any airline AirNZ included - do AIA compensate them when they close the runway and aircrat have to divert??
Discl: holding neither at present
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