AIR - Air NZ.

[Hoop]

.... However whats is to stop AIR.NZ hedging 3 years forward at current prices ?????
......

Whats is to stop AIR.NZ competition hedging 3 years forward at current prices ?????

[winner69]

Thanks again to roger & all those who have contributed/researched. Topped up some more today, abit overweight.

Winner now that you've bought in i hope you're not renoun for jynxing with your plane crash scare mongering haha

Vin - one sometimes get messages from above. One of those messages years ago was 'my son winner, if you buy airline shares it is likely one of their planes will crash and hundreds will die and you will have that on your conscience for the rest of your life as I told you not to become an owner of such airline'

Fate s a funny thing - and I never wanted to be the cause of killing people so never bought airline shares.

Over the years the advice from above has been spot on. I have faith.

But been seduced by the hype around AIR I have ....... temptation was too much and I succumbed to it.

I will need to seek counsel from above methinks

[stoploss]

Whats is to stop AIR.NZ competition hedging 3 years forward at current prices ?????

probably nothing , however aren't Morningstar trying to say that oil at $ 70 a barrel is going to cost them more than say the $ 50 a barrel currently . If they hedge it , this will increase profits/ maintain profitability in the face of a rising oil price ( who knows if it does go up ) .
So AIR.NZ profit not necessarily impacted short term/ med term on oil bouncing back to $ 70 if Morningstar forecast is right .
Fine if other airlines hedge as well , they can all be profitable just like the electricity companies

[winner69]

I thought this little bit from Chris Lee weekly rave was insightful

THE low-cost, low-service airlines have broadened the options for air travellers but if one listens to the pilots, there will be some price to pay for the cost-cutting approach.

I met three airline pilots in Nurnberg, Germany, all Americans, one from Missouri, one from Texas, one from Florida.

They had opted out of careers with the big airlines and were flying large planes for a charter company, not for more money or even more free time, but to escape what they say is an ill-fated American obsession with cost, rather than quality.

Of course the airlines are dominated by passengers holding credit cards with free air miles, a major factor in choosing airlines in the US.

‘’Fly with us and use our credit cards,’’ the pilots jibe.

But the serious aspect of their discussion was training and safety.

They believe that the American cost-cutting obsession has led to far too much training being done in simulator rooms and far too little training being done by round table tuition from senior pilots.

They contend that you learn by listening to old pros, discussing how problems occurred, how they were spotted and how they were solved, not by simulators.

Their view, strongly put by one of the pilots, is that the airline industry provides good insight into the problems of the US and probably the globe.

‘’Far too little respect for experience, knowledge and common sense, far too much respect for cross-selling and dividends.’’


Recent flight from Hong Kong I saw the pilot looked like an 'old 'pro' and it made me feel better. But then again an American pilot (prob an old pro) died mid flight the other day and the co-pilot had to land the plane.

I hope AIR drive to improve efficiencies and to make excessive profits don't cloud their thinking in the most important part of their operations - safety

[winner69]

The 267 mark seems to be bit hard to break through

Things looking a bit weaker than this morning .....bugger

Hope excitement not diminishing

[winner69]

Hey Roger - love your $800m NPAT est

That's heap more than AIR made over the whole 7 years that Fyfe was head honcho

Fyfe was a guru .....what's Luxon then?

Methinks luck and timing has a lot to do with it ...... maybe there is something to this thinking about this year being a one in a hundred year event for AIR profits.

[Beagle]

No mate I think one of the keys to understanding their profit going forward is they're growing capacity at the fastest rate in their 75 year history off a fairly static cost base, (11,000 employees in the 2013 year and the same in the 2016 year). Fuel efficiency is another big factor with their very modern fleet. Something not a lot of people understand is that if you make an aircraft heaps more fuel efficient e.g. Dreamliner 787-9 approx. 24% more fuel efficient than the 767-300's they replace you're carrying a lot less fuel so you can carry a lot more people and freight. e.g. 767 at max 230 passengers couldn't carry max freight of 5 tons into Asia, (they either had to offload some fright or passengers as to carry full fuel, passengers and freight was beyond the aircraft's capabilities) whereas with the new aircraft type they can carry the max 15 tons of freight even with a full load of 302 passengers and full fuel and do it burning 24% less fuel per seat kilometre flown. These planes are an incredible bargain at $150m...I wonder if C.L. was talking Kiwi or $U.S ? Marilyn Munroe likes to call these new generation aircraft a derisory name, plastic planes...I reckon they're magic planes

What I find slightly irksome in local brokers research is they're all saying to varying degrees that AIR's fuel price tailwind will tail off and EPS decreases will surely follow with increased competition as well...but somehow Qantas with its older and less efficient fleet appears to be immune from these competition and fuel issues as consensus analyst forecast show no sign whatsoever of their EPS figures tailing off in the years ahead, go figure ?

I love the way the board leads from the front and hasn't taken a director pay increase since 2007 and none this year either. My take is the company is incredibly well positioned, superbly managed and has first class governance. I believe their high level of confidence in the current year's profit and for future years is very soundly based. Luxon is a legend in the making.
Just wait till the company starts generating one billion dollar before tax profits year in and year out what's moaning star going to say then ? Opps sorry folks we stuffed-up ?

[Snow Leopard]

Nice prediction from AIR and as they are the ones closest to the actual accounts then we can take them at face value.
And so they appear to be tracking ahead of most analysts short term expectations and a number of them have or will raise the valuations.

I will even raise mine, a little, if you like .

However...

Best Wishes
Paper Tiger

Disc:
No AIR;
DYOR as usual.

[Beagle]

Yeah go on then I'm starting to think I need therapy...I can't help myself buying more.

[stoploss]

Yeah go on then I'm starting to think I need therapy...I can't help myself buying more.

I know it's secret Roger , but I'm hearing for services to AIR.NZ you have been given an invite ....

http://www.stuff.co.nz/travel/news/6...ity-One-lounge