AIR - Air NZ.

[Hoop]

The strategy is playing out - a down day on US markets and the airline index (XAL) up 3.23%. Doesn't look like AIR got the message though .

Yeah..AIR correlates very well but lately its been a little laggy.
Interesting to see:..
1...Some sort of problem for AIR around the beginning of 2012
2...Buyers futile attempt to push AIR through the secular resistance ~$3.14,...You can't beat the market forces ..eh?

Below is a crude chart ...The AIR layer not entirely in sync (resulted in a best fit) with the $XAL layer and the comparison is not accurate so ignore the AIR line being below the $XAL most of the time..
What I attempted to achieve with the overlayered chart was to see if the trending behaviour correlated which I achieved to do...

So if XAL keeps climbing then a I'd expect AIR will follow, however the XAL chart does seem to have a completed Head and shoulder pattern and the bad news is that the neckline break occurred around Xmas...probabilities are that the XAL latest rally looks to be nearly done...

[winner69]

Hoop - as long as AIR do better than that index AIR management will be happy as - bigger bonus.

What a rort

[Beagle]

Base salary $1.4m for running an organisation with over 10,000 staff and with turnover over $5,000m and looking at circa $1,000m profit before tax this year...we're lucky to have him and I would think he'd be well entitled to a decent bonus if he beats the airline index. How does that base salary compare to your mate Jeff running HBL looking at $50m profit this year ?

[Hoop]

Hoop - as long as AIR do better than that index AIR management will be happy as - bigger bonus.

What a rort

I don't mind bigger bonuses if they deserve it....What really pisses me off is when Directors and Management get these huge payouts and back slapping when the shareholder funds shrink with the cash burn (the gold plated pig trough).
Overall I think the AIR Management has done very well...they managed to keep making a profit (just) during the last recession which for a cyclical business is very good..That 2011-2012 sticky economy patch saw AIR keeping out of trouble when some airlines went to the wall...Yep I'm happy to pay them something extra...

[winner69]

I don't mind bigger bonuses if they deserve it....What really pisses me off is when Directors and Management get these huge payouts and back slapping when the shareholder funds shrink with the cash burn (the gold plated pig trough).
Overall I think the AIR Management has done very well...they managed to keep making a profit (just) during the last recession which for a cyclical business is very good..That 2011-2012 sticky economy patch saw AIR keeping out of trouble when some airlines went to the wall...Yep I'm happy to pay them something extra...

Not saying bonus/incentives are bad (even though totally excessive in some cases)

I just think it odd that a listed NZ company with mainly NZ shareholders use a global airline index as a key measure of management performance.

Grant you they use a blended index made up ofNZX All and the global airline index so to some extent performance is relevant to NZ - but the use of the airline index seems to be a back stop in case airlines do badly.

Not just AIR but many plans have market related incentives (top quartile TSR etc) meaning even in real down markets as long as you don't go down as much as the next guy you still get our juicy bonus - even though shareholders have lost.

Good article on Luxon in last weeks The Listener - maybe his incentive should include share of media space

[Raz]

Not saying bonus/incentives are bad (even though totally excessive in some cases)

I just think it odd that a listed NZ company with mainly NZ shareholders use a global airline index as a key measure of management performance.

Grant you they use a blended index made up ofNZX All and the global airline index so to some extent performance is relevant to NZ - but the use of the airline index seems to be a back stop in case airlines do badly.

Not just AIR but many plans have market related incentives (top quartile TSR etc) meaning even in real down markets as long as you don't go down as much as the next guy you still get our juicy bonus - even though shareholders have lost.

Good article on Luxon in last weeks The Listener - maybe his incentive should include share of media space

I tend to agree, his official base may be low but in reality is the bonus/incentive really that much of a hurdle. Seems to me the total compensation is in reality the base, split this way for political reasons. This leads to the question is there a real mutually beneficial incentive scheme in place....

I say the base is low when I consider most CEOs with any international experience of success would tend not to get out of bed for 1.4

[Raz]

Compared to previous months January was a bit slack

Suppose 9% increase in RPK not too bad though

Yes especially given it was January. I was underwhelmed, like the market reaction. Management in cruse mode.

[percy]

I don't mind bigger bonuses if they deserve it....What really pisses me off is when Directors and Management get these huge payouts and back slapping when the shareholder funds shrink with the cash burn (the gold plated pig trough).
Overall I think the AIR Management has done very well...they managed to keep making a profit (just) during the last recession which for a cyclical business is very good..That 2011-2012 sticky economy patch saw AIR keeping out of trouble when some airlines went to the wall...Yep I'm happy to pay them something extra...

I totally agree,too often these bonuses come at shareholders' expense.
When shareholders benefit,then management should too.

[Hoop]

" Not saying bonus/incentives are bad (even though totally excessive in some cases)

I just think it odd that a listed NZ company with mainly NZ shareholders use a global airline index as a key measure of management performance..................."

By not using company growth incentive bonuses and preferring to compare AIR's performance with the Airline market index (a cyclical market) instead....... maybe Chris Luxon's AIR management secretly think AIR is a cyclical company after all.....eh?

13 August 2015 page D13 Chris Luxon Quote ".....We cannot choose between growth and sustainability. We have to have both...."

[winner69]

By not using company growth incentive bonuses and preferring to compare AIR's performance with the Airline market index (a cyclical market) instead....... maybe Chris Luxon's AIR management secretly think AIR is a cyclical company after all.....eh?

13 August 2015 page D13 Chris Luxon Quote ".....We cannot choose between growth and sustainability. We have to have both...."

I was going to say that but didn't want to use the C word