AIR - Air NZ.

[Hoop]

Hi Guys
good debate stuff
Yeah there's been some big fundamental positives lately.
Sharp..yes falling oil prices should have a positive effect but I've charted AIR price with Oil price several times over the years and there's little to no medium term coallation..so there is a theoretical anomally here... The only explainations I can think of why there's lack of correlation to the shareprice is:-1... the hedging strategy AIR prevents the airline from benefiting immediately from the drop...It seems some airlines which have either no hedging e.g China airways or a lesser ratio hedging policy in place may gain a competitor advantage during this period 2.....Sometimes a falling oil price is a result of a global recession..A terrible time for most businesses with lack of demand . 3.....the oil price, accounts for a third of AIR running costs,so the benefits could be masked by other unrelated negative factors effecting AIR shareprice

The other positive is the lower NZ$...I continually read the chairman reports bitching about the high dollar..yet NZ$ fluculations produces another theoretically anomally as there is again little to no correlation over the medium term when charted with AIR shareprice price..The only explanations I can think of is...1 when the NZ$ drops it often coincides with a downturn in the NZ economy (and/or developed nations). 2...the NZ$ fall benefits are masked by other negative factors effecting AIR shareprice.

However both positives do have very short term market positive effects such as same day media announcement but Mr Market then seems to forget.

Yep Roger being shareholders it always nice to see full planes and lots of them..eh ..hope this continues...

[tzbang]

It would be good to hear Roger and Modandm weigh in their opinions on some of this. I'm somewhat surprised about the sustained downward pressure since seeing $3, esp with the oil price recovery falling over. What looked like finicky holders scrambling to realise some profits at a high point seems to have continued longer and lower than I was expecting.

[neyney2010]

Relax everybody. Chris is relaxed.
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[sb9]

http://www.3news.co.nz/business/air-...#axzz3cX1G3NFb

[Zaphod]

A couple of years ago there was some rumour regarding AKL-BOM, but Luxon stated that the sacrifice of passengers/cargo would be too great to enable this route. The code-sharing arrangement (thankfully with another *A carrier) makes good sense. I can't see AIR entering that market directly.

[sharp]

http://www.afr.com/business/transpor...0150608-ghjf3c

Guys and girls. See above.

[Biscuit]

http://www.afr.com/business/transpor...0150608-ghjf3c

Guys and girls. See above.

Yes, airlines are all making more money, great: more profit, which will lead to increased capital which will lead to more capacity which will lead to...

[Beagle]

Yes, airlines are all making more money, great: more profit, which will lead to increased capital which will lead to more capacity which will lead to...

Just as well there's an eight year lead time on many new aircraft models then isn't it

Not much to add at this stage other than the market has been generally soft since AIR hit $3. Surely nobody expects smooth flying conditions all the time ?

Suggest people keep a close eye on the monthly operating statistics. I was very impressed with the last set. What other business tells you its load factors, RPK's and yield on a monthly basis.
Surely this is all the evidence people need to know that this bird is flying very sweetly indeed.

[Biscuit]

Just as well there's an eight year lead time on many new aircraft models then isn't it

Yes, buy extra aircraft at top of the cycle and take possession at the bottom! But yes, agree the outlook is still positive

[Jaa]

Just as well there's an eight year lead time on many new aircraft models then isn't it

Roger, you have said this before but this is only one side of supply/demand balance.

Airlines only need to hang on to their older gas guzzling planes for longer to add extra capacity, something low oil prices makes desirable.

Even Air NZ have said they are looking to do this with their 767s, witness the extra 767 flights to Perth just announced.