AIR - Air NZ.

**skid** · 25-02-2016, 10:19 AM

Honestly,did any one really doubt that this (pre competition)result would not be good?
The more interesting scenario is where to from here--will it carry on through winners $3?..or settle (result already priced in,for the most part)

With good management ,clever marketing,and realistic pricing,they will hold their own in a tougher ,more competitive market.
But does that mean that they will surge ahead into the share price stratosphere?
This phase IMO is where the rubber meets the road--It is the difference between accounting and financial planning.

Meanwhile all you holders ..go out and buy a bottle of champagne to celebrate what they have done up to now. Congrats.

**Beagle** · 25-02-2016, 10:22 AM

Originally Posted by skid

Honestly,did any one really doubt that this (pre competition)result would not be good?
The more interesting scenario is where to from here--will it carry on through winners $3?..or settle (result already priced in,for the most part)

LOL - You make out like there's no competition already ROFL. I watched 3 Emirates A380's arrive one after the other as they flew over the Manukau harbour while I was fishing the other day.
Capacity growth into and out of N.Z. for CY 2016 is forecast to grow from 8.4 million seats to 9.4 million,11.9%. Tourism is presently growing at 10%. With cheaper oil translating into cheaper fares is it really so hard to join the dots and see demand is growing strongly in line with supply...

Average price of delivered Oil for AIR for 1H Fy16 was $60 barrel. Interesting compared to the current spot price isn't it. i.e. the big fuel gains are coming this half and beyond.

I am pleased they made their forecast of exceeding $800m excl VAH and I am sure they will deliver on it even with another Emirates flight starting next month plus other new competition coming shortly.

**iceman** · 25-02-2016, 10:25 AM

Originally Posted by Roger

LOL - You make out like there's no competition already ROFL. I watched 3 Emirates A380's arrive one after the other as they flew over the Manukau harbour while I was fishing the other day.
.

So that's why your wife caught fish and you didn't :-)

**stoploss** · 25-02-2016, 10:27 AM

Roger another nice day in Auckland , Prince concert was superb .
Maybe take the day off and go fishing .... You can lead a horse ......

**skid** · 25-02-2016, 10:43 AM

Originally Posted by Roger

LOL - You make out like there's no competition already ROFL. I watched 3 Emirates A380's arrive one after the other as they flew over the Manukau harbour while I was fishing the other day.
Capacity growth into and out of N.Z. for CY 2016 is forecast to grow from 8.4 million seats to 9.4 million,11.9%. Tourism is presently growing at 10%. With cheaper oil translating into cheaper fares is it really so hard to join the dots and see demand is growing strongly in line with supply...

Average price of delivered Oil for AIR for 1H Fy16 was $60 barrel. Interesting compared to the current spot price isn't it. i.e. the big fuel gains are coming this half and beyond.

I am pleased they made their forecast of exceeding $800m excl VAH and I am sure they will deliver on it even with another Emirates flight starting next month plus other new competition coming shortly.

You caught me before i could add my last bit--They have done well indeed Roger--of course there was some competition--but you did see what happened when more companies saw the juicy NZ market--I certainly do not want to rain on your picnic--just pointing out that any market is self regulating to some extent and now we will see how they do in this new market.
I believe they are well positioned to carry on, but not sure of the growth % in terms of bums on seats from here.
but having said that we have put one bum on one of their seats this May!--Now go out and get that bottle of Champagne!

PS-Man your quick!

**Beagle** · 25-02-2016, 10:48 AM

Originally Posted by iceman

So that's why your wife caught fish and you didn't :-)

Sssshhh you mustn't tell tales out of school

...she was using my favourite rod and reel though...that's my excuse and I'm sticking to it LOL

So is this result priced in and how did we fare compared to QAN , (lasted traded at circa $4.00).
Qan obviously subject to similar competitive pressure and as posted recently is facing a circa 50% growth in Chinese carrier capacity.
Their EPS was 31.9 cps for the half, (AIR 30.12 cps) so with their older fleet including many old 747's they reaped more of a fuel price benefit and are reaping efficiency benefits from the three year wage freeze many of their unions agreed to after their recent $2.8 billion loss.

I still find the dichotomy in how the market is treating these two airlines very interesting. Whilst its fair to say the wage freeze is presently benefiting QAN these things don't last forever and we all know how militant Australian unions can be so given the market is constantly pricing companies based on (at least theoretically the net present value of future cash flows) how is it that QAN commands such a price premium ? I reckon those unions will all want big catch up increases when that wage freeze ends.

Higher gearing QAN and lower book value per share certainly don't explain it. No dividends either since 2011 so no dividend yield. $500m buy-back a little contrived to boost the SP perhaps ? Growth in Australian Tourism is 8% lower than N.Z. tourism currently running at 10% so that doesn't explain it either.

AIR are on a pathway to a very modern fuel efficient fleet and I think they're at least as well positioned as Qantas to meet the ever changing dynamics of the airline industry for the foreseeable future. I think some N.Z. institutions remain excessively risk averse when it comes to AIR N.Z.

**Beagle** · 25-02-2016, 10:53 AM

Originally Posted by skid

You caught me before i could add my last bit--They have done well indeed Roger--of course there was some competition--but you did see what happened when more companies saw the juicy NZ market--I certainly do not want to rain on your picnic--just pointing out that any market is self regulating to some extent and now we will see how they do in this new market.
I believe they are well positioned to carry on, but not sure of the growth % in terms of bums on seats from here.
but having said that we have put one bum on one of their seats this May!--Now go out and get that bottle of Champagne!

PS-Man your quick!

Fair enough mate and apologies that I was a bit snappy. Huge vested interest = ruling out the morning and studying the **** out of it

Speaking of which I'd better listen in to the analysts conference call..starts at 11.00. Just time for a quick coffee first. Essential to have good quality beans in your coffee when you're a bean counter

Might have a couple of bevvies this afternoon.