AIR - Air NZ.

[couta1]

Airlines are proving once again that they are in a commodities business - same product, same input costs, same planes and little differentiation.

The cheap fuel of late has lead to increased capacity, probably beyond demand.

Put all this together the intense competition results in tumbling airfares. Herald reports us$100 odd AA special LA / AKL and stuff says Singapore adding more flights to CHCH.

I reckon boom profits this year for the likes of AIR (maybe a bit lower than forecast) but then heading back to where airlines usually are - not that profitable

AIR at $3 today - maybe as high as it will go

Hoop possibly is right in saying airlines are notoriously cyclical - mostly of their own making

Is now the top of this current cycle?

Definitely not a long term hold for me again at current prices, upside potential with increasing competition is quite limited IMO, price currently in no man's land so no good for traders either, really just a divvy play I guess until something sends the SP downwards again, which of course could happen at any time.

[tim23]

I would have thought excellent for traders the SP has been all over the place, bit like Sky TV.

Definitely not a long term hold for me again at current prices, upside potential with increasing competition is quite limited IMO, price currently in no man's land so no good for traders either, really just a divvy play I guess until something sends the SP downwards again, which of course could happen at any time.

[Beagle]

Definitely not a long term hold for me again at current prices, upside potential with increasing competition is quite limited IMO, price currently in no man's land so no good for traders either, really just a divvy play I guess until something sends the SP downwards again, which of course could happen at any time.

Or... they could announce a successful sale of VAH, a special divvy and buy-back and the price could head north. Flip a coin ?

[couta1]

I would have thought excellent for traders the SP has been all over the place, bit like Sky TV.

Not of late, Air weekly trading range $2.97-$3.05 (Tiny number of shares available between $2.97-$3.00) so narrow range compared to SKT weekly range of $4.55-$4.97.

[Marilyn Munroe]

Crikey some Aussie is pointing the bones at airline shares as an investment especially Queer and Nasty Airlines.

http://www.smh.com.au/money/investin...08-go1fug.html

Boop boop de do
Marilyn

[skid]

Or... they could announce a successful sale of VAH, a special divvy and buy-back and the price could head north. Flip a coin ?

I think (in terms of cyclical s) that airlines and tourism (especially here, have hit a ''sweet spot'' and I think the realistic money would be hoping it lasts,rather than expecting it to rocket)

Those holding would want to ride it out for as long as it lasts --but buying in is far more of a risk IMO---to gain alot from this point is asking alot and I get the feeling that covering ground on the profit side is getting on the longer odds side of things when compared with possible downside--Its been a long term gain (7 years) for almost all markets and NZX seems to be riding the peak----Even healthy markets need a reality check once in a while.--The exception would be if more foreign buyers are lining up for a piece of NZ action,but in saying that,that foreign money can go at the blink of an eye ,to safer havens if need be.

That VAH possible sale is one wild card that could help though Roger--good point...It will be interesting to see if it becomes a tussle between Singapore and China..or nothing.

[winner69]

March operating stats out this week

Will still be showing huge growth in pkms (or whatever) and surprisingly high yields

[Sideshow Bob]

Just back from HK - premium economy and business were both chokka both ways, and economy pretty full.

[Beagle]

Crikey some Aussie is pointing the bones at airline shares as an investment especially Queer and Nasty Airlines.

http://www.smh.com.au/money/investin...08-go1fug.html

Boop boop de do
Marilyn

Fully reflected in the current PE of only 5 IMHO. Maybe the article is misdirected ? Take Auckland International Airport for example, still subject to the cyclical nature of the tourism industry but trading on a PE of 30, six times the PE ratio of AIR....Hmmm.

[Fox]

Take Auckland International Airport for example, still subject to the cyclical nature of the tourism industry but trading on a PE of 30, six times the PE ratio of AIR....Hmmm.

A portion of that PE variance is probably due to the airport benefiting from increased competition between AIR's rivals, also its monopolistic nature, but a PE of 30 is