AIR - Air NZ.

[h2so4]

Just noticed on the ASB website, morning start has updated their analysis for AIR NZ and is sticking with $2.80.

Don't agree with a number of points in there, namely "Our no-moat rating reflects the competitive environment. Our fair value estimate is unchanged at NZD 2.80 (AUD 2.60), with the uncertainty rating firming to high from very high."

I think they have underestimated the power of Airpoints, i know personally i will almost always book with Air NZ even when they are not the cheapest as i usually have some Airpoints to burn. I'm assuming i'm not the only one that does that? I'll fly Jetstar but only when there is daylight between prices, which i think has happened once in the last 4 years.

Yes. I'm happy to go with $2.80 and let Morningstar guide us through the cyclical nature of AIR.
Air is a $4b company, the margin of safety is huge,with $1.4b cash.
At $2.74 we are picking up a 10% div. Whats wrong with that?

[cdonald]

Just noticed on the ASB website, morning start has updated their analysis for AIR NZ and is sticking with $2.80.

Don't agree with a number of points in there, namely "Our no-moat rating reflects the competitive environment. Our fair value estimate is unchanged at NZD 2.80 (AUD 2.60), with the uncertainty rating firming to high from very high."

I think they have underestimated the power of Airpoints, i know personally i will almost always book with Air NZ even when they are not the cheapest as i usually have some Airpoints to burn. I'm assuming i'm not the only one that does that? I'll fly Jetstar but only when there is daylight between prices, which i think has happened once in the last 4 years.

I have been a member of airpoints for years. With the change from BNZ to westpac last year we have since taken the "cash" option with BNZ. As an example, my wife used the last of our airpoints flying to London at xmas time. the cost on AirNZ return economy was $3600. I flew to london at exactly the same time on Cathay and my cost was $2085 return. Was a bit inconvienient flying on different planes and on diff routes. I do prefer Airnz over the other airlines but I am not too sure how many people have actually stuck with Airpoints after losing Global plus last year. It would be interesting to see those numbers.

[Beagle]

AIR's fuel hedging policy is outlined in their investor databook. http://www.airnewzealand.co.nz/databook

On the call yesterday management explained they went from min forward hedging to their maximum position in late January when Brent hit $30 barrel.

There's a wide range of other credit cards that are linked in with airpoints.

[iceman]

I have been a member of airpoints for years. With the change from BNZ to westpac last year we have since taken the "cash" option with BNZ. As an example, my wife used the last of our airpoints flying to London at xmas time. the cost on AirNZ return economy was $3600. I flew to london at exactly the same time on Cathay and my cost was $2085 return. Was a bit inconvienient flying on different planes and on diff routes. I do prefer Airnz over the other airlines but I am not too sure how many people have actually stuck with Airpoints after losing Global plus last year. It would be interesting to see those numbers.

You can collect Airpoints on credit cards with both Kiwibank and ANZ as well !

[Raz]

Also for heavy users of the BNZ credit cards they provided great incentives to move from BNZ to another air points credit card.

At 2.73 before I was wonder if people thought their was some similarity to QAN shares..remember AIR provides dividends for starters...

[GuessX]

> It would be interesting to see those numbers.

With how slammed I got with different banks AND AirNZ telling me about their AirPoints offering after BNZ was removed, I'm sure the competing banks did very well out of it.

[winner69]

Vin - lunch almost over although for the money men it can be a bit longer on Friday

Plenty of action I reckon before close - the hot money just clearing out the dregs at the moment but they will want to be in before the week ends

Wouldn't want to be n wrong side of next weeks jump p would they?

[RTM]

Yes. I'm happy to go with $2.80 and let Morningstar guide us through the cyclical nature of AIR.
Air is a $4b company, the margin of safety is huge,with $1.4b cash.
At $2.74 we are picking up a 10% div. Whats wrong with that?

I am considering buying some more so could you help me a little with respect to the dividend. Looking at NZX I see the following for dividend: 2013: 3c / 5c (Interim / Final) 2014 4.5 / 5.5 and 10c special, 2015 6.5 / 9.5. So 2015 = 16c which is 6%. I am a holder and reasonably happy with this, especially adding in the SP appreciation I have seen. But how do you get your 10% Dividend ? What have I missed ?

[Beagle]

Hot money that was looking for a bounce is getting out and the smart money is buying in the mid 270's cum a 10 cent divvy (in 5 minutes time so too speak) so is really only paying mid 260's for their shares.

30 cps earnings in the last six months and only distributing 10 cents so there's 20 cents of accrued earnings extra in there than 6 months ago. NTA is up by slightly more.

Mid 260's effective considering the extra accrued earnings is the same as paying mid 240's In August 2015 when AIR was earning at the rate of circa $500m underlying earnings before tax for the full year, not the half year.

In last year's balance sheet as at 31 March 2015 my AIR shares were $2.73 ex divvy and they had just earned $133m after tax for the half year. Now they're almost the same price, cum dividend and they just earned $338 after tax. All those accrued earnings since March 2015 that haven't been paid out, only one 9.5 cent divvy between March 2015 and today and they've more than doubled their earnings and you can buy the shares for basically the same money today. Really the shares are amazing value at present.

Was chatting to a couple of mates this morning by e.mail. Thought I might as well share with all you good folks. Sums up how I see the current SP.

[777]

I am considering buying some more so could you help me a little with respect to the dividend. Looking at NZX I see the following for dividend: 2013: 3c / 5c (Interim / Final) 2014 4.5 / 5.5 and 10c special, 2015 6.5 / 9.5. So 2015 = 16c which is 6%. I am a holder and reasonably happy with this, especially adding in the SP appreciation I have seen. But how do you get your 10% Dividend ? What have I missed ?

Assumptions. Last years div was 16c. This years interim is 10c. Expectation of final div is 10c.
Therefore 20c for the year.

Divide that by .72 and you gat a div before tax of 27.778c

As a yield on share price of 2.75 this is 10.101%

I stand to be corrected.