AIR - Air NZ.

[Raz]

Airline management thinking. Is US-centric but interesting as shareholders need to trust management to balance customer needs but make money

http://www.strategy-business.com/blo...lone?gko=f1ee7

Extract -

There’s a market-based method to airlines’ current approach to pricing and passenger perks. Most industries don’t cut prices unilaterally unless market conditions, or competitors, force them to. But persistently rising demand proves that airlines don’t need to cut prices to goose sales.

And

But the flying public, simply put, should get over itself. For the fare increases have far more to do with the dynamics of the broader travel marketplace than with the short-term greed of companies. And counterintuitive as it may seem, airlines are making a smart long-term move.

Well with respect the US they have not had a financially sustainable industry, they have had to widen the margins and with consolidation they might just pull it off.

Just like AIR if you can condition customers to a higher price point with perceived value all the better, that is why those counter arguments that Air is so much better yesterday on this forum is so reassuring to me as an investor :-)

Given the crown is majority shareholder and AIR is so closely linked with the NZ Brand and vital infrastructure how do you think strategy should be moderated if at all for the NZ context?

[blockhead]

Listening to the wireless this morning they were saying AIR is not completely out of the woods yet regards the air freight price fixing cartel allegations, this is the US class action suit, not the OZ action which I understand was settled a while back.

Uneasy feeling having that lurking in the background ?

[Beagle]

Been lurking in the background for a long time now and no, its not a material consideration IMO.

Anyway...the U.S. airlines I follow Delta and American airways are both up ~ 10% over the last week. Strong increases overnight on Wall St. Both on cheap forward PE's of less than 6. The sky isn't falling and a similar 10% recovery in AIR from $2.695 would equate to $2.96. I strongly prefer AIR's metrics to either of these other two airlines and anyone that's closely studied the operating stat's knows there's a blinder of a half year result coming shortly and a big increase in dividend. Disc: Bought more this morning on the open.

[skid]

Well with respect the US they have not had a financially sustainable industry, they have had to widen the margins and with consolidation they might just pull it off.

Just like AIR if you can condition customers to a higher price point with perceived value all the better, that is why those counter arguments that Air is so much better yesterday on this forum is so reassuring to me as an investor :-)

Given the crown is majority shareholder and AIR is so closely linked with the NZ Brand and vital infrastructure how do you think strategy should be moderated if at all for the NZ context?

They are certainly so much better than Jet Star Raz,but when you strip out the budget airlines and get down to regular airlines,with meals,sometimes better seats,then it gets to be a more level playing field.

I certainly agree with the time of day point--Even a good airline with a big layover making a 9hr flight come out to 18hrs makes it worth spending a bit more,for a better schedule. There are just so many things in the mix.--If you want to go to Canada,but via LA or San Fran,you are now forced to get an electronic visa for the US just to transit through(luggage off -through customs -back on) what a pain--That certainly makes the Vancouver direct flight much more attractive--If your going to the States then If American air or AIR has a cheaper price and all else is similar then I would suggest the majority would go with the savings ---I think for most part,airlines are predominately price orientated and most things being equal thats what most travelers will look at.
There is no doubt that ,after flying a bunch of US domestic flights or air Canada that getting back on a plane with the Kiwi atmosphere is a nice change,but that soon wears thin if your cramped,even with nice stewardess.and a cool design on the outside of the plane. 12-13 hrs in a tin box is hard.
To show the value of having a route ''in the bag'' the last 4-5 trips we have always flown AIR to Canada-The ,probably 10 times to southeast Asia--never.---So Id say its Price-Convenience-Availability,..with devotion to brand last. IMO of course.
Since the wife will fly in May she can give me feedback on whether its gotten more comfortable than last time on Air New Zealand.

[iceman]

Skid the electronic Visa waiver through the USA isn't that much of a pain. 10 minutes on the internet and it lasts for multiple travel for 24 months !

[Beagle]

Skid the electronic Visa waiver through the USA isn't that much of a pain. 10 minutes on the internet and it lasts for multiple travel for 24 months !

Hi mate...care to share about the freight thing we discussed the other day...just a small bit of info but could be of some interest to stave off the boredom while we wait for the half year results.

[iceman]

Hi mate...care to share about the freight thing we discussed the other day...just a small bit of info but could be of some interest to stave off the boredom while we wait for the half year results.

Wasn't really much but speaking to crew on my flight EZE-AKL they told me that freight volumes on that leg has surprised on the upside and most of the flights full of freight. Some so full and heavy that they've had to limit seat sales.
They also told me that all the flights have been well booked, with over 75-80% of seats full each time. This morning I booked the last business class seat for a flight back to EZE in just under 3 weeks time !! Looks like EZE has been a great choice for AIR

[skid]

Skid the electronic Visa waiver through the USA isn't that much of a pain. 10 minutes on the internet and it lasts for multiple travel for 24 months !

Thats good to know Ice ..not so painful after all--although having to go through customs for transit passengers is still ludicrous,--last time there was a long line to stand in, with luggage...maybe there was some glitch ,but after a long flight ,it was not fun(especially with the thought of the possibility of missing the connection) Can anyone think of a logical reason for that--instead of just transferring luggage--(of course I understand why they want US to go through so they can get us (and our fingerprints)on their data base)--watching them electronically fingerprinting our 6 yr old daughter was laughable in a dark humor sort of way.

[skid]

Hi mate...care to share about the freight thing we discussed the other day...just a small bit of info but could be of some interest to stave off the boredom while we wait for the half year results.

Sorry Roger,im having a senior ,moment---Do you mean about the ''total weight thing'',where light weight people get more luggage? (They'ed probably call it discriminatory,but weight is weight eh?)..I guess I was'nt totally serious in my expectation but you never know. We just contributed $2300 to your Dividend fund yesterday for that ticket for the missus

[stoploss]

http://www.stuff.co.nz/business/indu...runk-schedules