AIR - Air NZ.

[Beagle]

9.4 v 8.4 million seats Skid, (total inbound and outbound). Predicted seat growth 11.9%. Historical tourism growth rate currently 10%. Cheaper airfares with new carriers arriving and a low $Kiwi means I think its reasonable to assume demand growth will match capacity growth. AIR more than getting their share with ASK's growing at 12% and RPK's growing at 17% YTD per Dec 2015 YTD operating stat's.

"Air governance is okay" Raz Do you realise Tony Carter won Chairman of the year at last year's Deloitte Top 200 company awards ?
CFO Rob McDonald won CFO of the year at the same award ceremony. From what I'm aware they are also well regarded in the industry for being innovative with their marketing and promotion..a fine example are their highly creative safety briefing video's.
You're a very hard person to impress, glad I don't work for you mate, (no offence intended).
"Jetstar has had great success based on price with kiwi's", Raz. Really ? Do they publish the net profit for the N.Z. division of Jetstar and if so would you please advise the net profit after tax for Jetstar N.Z. for each of the five years to 2015 ? Are they presently profitable with their new regional flights ?

[Marilyn Munroe]

We have found out from experience that those super specials are for a VERY limited amount of seats(the wife needs to go to Montreal)

Appologies for the off topic post but Skid can you tell how the cost savings versus hassle factor works out flying to an airport south of the border and renting a car for the final leg as an alternative to flying direct to Montreal by Maple Syrup Airlines and their protected market price gouging?

Boop boop de do
Marilyn

[sb9]

don't think their customer focus and marketing is world class...

With due respect I beg to differ 100% on your view as above, I think their marketing is world class and they are very Customer-centric, you only need to listen to Mr Luxon on few of his media interviews and you know why.

[LadyGrey]

Yes some of Rodgers assumptions are certainly debatable. Jetstar has had great success based on price with kiwis. (with inferior network & product)

Tourism is certainly capacity constrained so without the infrastructure has limited further growth.

Air Governance is ok although as a consultant don't think their customer focus and marketing is world class...

A certain sector had disposal income however pricing suggest that is not the case for the majority. It is a different matter to get it from them. AIR certainly limited its specials to maintain margins..result they have lost me as a client - my 7 overseas trips this year (given competition) means I have only had to spend 58% of my planned flight budget. All booked, done and dusted.

Still it doesn't have to be a world class company to make an investor a lot of money i.e xero being a classic example..made a lot of money off them even though they have severe limitations.

My husband and I have just come back from a trip to Australia where we flew Jetstar. He is one of the types who is very motivated by price and will fly with the cheapest airline. However our experience was so bad that he vowed never to fly Jetstar again. We took 3 flights in total which were all delayed, one by over 2 hours. He is also telling everyone about his bad experience and encouraging people to fly Air New Zealand. Having travelled extensively including many long haul flights we both agree that Air New Zealand is miles ahead of the pack and we have recently joined the airpoints program and will exclusively fly with them from now on.

Disc: Have previously owned AIR shares but sold in the recent highs. Considering a re-entry.

[Raz]

Jetstar is a loss leader for a reason... if you understand the strategic plan, the point was a clear example where price will convert kiwis even with an inferior network & product.

Yes I'm aware, I know about the Deloitte 200 awards and actually some of the past winners, they are competent. Now look at how many kiwis have made it overseas on boards and excelled. A very small group indeed. I work on a number of advisory boards in the US, and because of family... three boards in europe. It is such a small group we know each other..the group really is that small. I would like to think I'm competent as well haha however I can tell you I have worked with some exceptional directors overseas..they are on another level, opened my eyes to what is possible...now that is what I call world class. People like Chris Liddell are in demand back here for a reason. Not many in little old NZ from my experience.

[Raz]

That is cool. Mr. Luxon comments were not in my thinking, specifically their strategy at operating level of treating tiered status customers differently in flight, even on premium seats has rubbed a lot of people I know up the wrong way. I lot of people have switched flying to Europe as an example. My clients... I treat like a forum, when there is a common thread I take notice...

[Beagle]

My husband and I have just come back from a trip to Australia where we flew Jetstar. He is one of the types who is very motivated by price and will fly with the cheapest airline. However our experience was so bad that he vowed never to fly Jetstar again. We took 3 flights in total which were all delayed, one by over 2 hours. He is also telling everyone about his bad experience and encouraging people to fly Air New Zealand. Having travelled extensively including many long haul flights we both agree that Air New Zealand is miles ahead of the pack and we have recently joined the airpoints program and will exclusively fly with them from now on.

Disc: Have previously owned AIR shares but sold in the recent highs. Considering a re-entry.

Thanks for sharing and welcome to the forum. You get what you pay for which with some of the low cost carriers isn't much.

[Raz]

My husband and I have just come back from a trip to Australia where we flew Jetstar. He is one of the types who is very motivated by price and will fly with the cheapest airline. However our experience was so bad that he vowed never to fly Jetstar again. We took 3 flights in total which were all delayed, one by over 2 hours. He is also telling everyone about his bad experience and encouraging people to fly Air New Zealand. Having travelled extensively including many long haul flights we both agree that Air New Zealand is miles ahead of the pack and we have recently joined the airpoints program and will exclusively fly with them from now on.

Disc: Have previously owned AIR shares but sold in the recent highs. Considering a re-entry.

I agree they appear bad, everyone moans yet they continue getting many people coming back. Not my airline, I have liked Air NZ... have thought the same to yourselves in the the past although i have discovered there are better inflight experiences to be had.

Disc. I'm holding and buying

[skid]

Appologies for the off topic post but Skid can you tell how the cost savings versus hassle factor works out flying to an airport south of the border and renting a car for the final leg as an alternative to flying direct to Montreal by Maple Syrup Airlines and their protected market price gouging?

Boop boop de do
Marilyn

Sorry MM--Dont know the answer to that--Shes flying AK-Vancouver and on to Montreal with the horrible air Canada(where a 6hr(approx) flight doesnt get you a meal--shessh!
But If you going through the states(god forbid) If some one is prepared to make the 6hr trip to New York to get you -you would probably save some dosh (kinds has to be a main connection point(NYC) and after a long flight that 6hr min drive would be a bit much.

[Beagle]

That is cool. Mr. Luxon comments were not in my thinking, specifically their strategy at operating level of treating tiered status customers differently in flight, even on premium seats has rubbed a lot of people I know up the wrong way. I lot of people have switched flying to Europe as an example. My clients... I treat like a forum, when there is a common thread I take notice...

Thanks for your comments RAZ but as a shareholder its water off a ducks back as far as I'm concerned. Fact is demand and seat load factors YTD are very strong and there are literally millions of happy customers. Demand growth is significantly outstripping seat capacity growth despite the airline growing at a faster rate in FY16 than in their entire 75 year history and further, their RPK growth is double that of the average Asia pacific airlines so they're doing a heck of a lot of things right in the assessment of millions of their other customers. One of two anecdotal reports from you, me or anyone else, (no disrespect intended) mean very little in the face of these compelling YTD operating statistics.

Fact is load factors above 80% have been the norm for the last five years so I have every confidence that management and marketing team are a highly competent group of people and have proven themselves with very strong earnings growth in recent years. I think a lot sheets back to a great leader and Mr Luxon sets the tone and culture of the organisation right from the top.