AIR - Air NZ.

[mikeybycrikey]

Mikey - you're aware that AIR has maintained double digit EBITDA% since 2007, so managed to stay profitable even during the worst economic climate since the 1930s??

I'd call that quite resilient.

I don't really like EBITDA as a measure. Especially in a capital intensive industry like an airline where D&A were 13% of revenue. To me ignoring D&A implies you're going to run the business into the ground (but maybe I misunderstand the measure). If you're talking about EBIT being double digits then that's a different story but I don't have those figures on me.

With my posts about yield, I'm not trying to say that AIR is badly run (quite the opposite in fact), just that the competitive environment might be getting tougher. As we have seen low oil prices are not necessarily good for airlines becasue they significantly increase competition. Interestingly this time has been different and yield has barely been hit with the drop in oil prices so there is fair bit of space for yields to fall to catch up to oil.

Enough about that from me now. I'm just going to hope that the SP comes back a little bit this week because even with my analysis I didn't sell out last week and am regretting that.

[couta1]

axe got greedy on close

I've got the feeling that your greediness was timed to perfection.

[OldGuy]

Great post, Roger. I'm certainly not afraid to buy more this week!

[OldGuy]

I don't really like EBITDA as a measure. Especially in a capital intensive industry like an airline where D&A were 13% of revenue. To me ignoring D&A implies you're going to run the business into the ground (but maybe I misunderstand the measure). If you're talking about EBIT being double digits then that's a different story but I don't have those figures on me.

With my posts about yield, I'm not trying to say that AIR is badly run (quite the opposite in fact), just that the competitive environment might be getting tougher. As we have seen low oil prices are not necessarily good for airlines becasue they significantly increase competition. Interestingly this time has been different and yield has barely been hit with the drop in oil prices so there is fair bit of space for yields to fall to catch up to oil.

Enough about that from me now. I'm just going to hope that the SP comes back a little bit this week because even with my analysis I didn't sell out last week and am regretting that.

Ok, well that EBIT% has also stayed in a pretty good range, too. Happy?

[couta1]

The Sheep have been shorn, the rest of us are happy we kept our fleeces, bounce time

[Beagle]

Great post, Roger. I'm certainly not afraid to buy more this week!

You're not the only one with the finger hovering over the buy button I can assure you of that mate.

[winner69]

No, no, no. That is an error in understanding just what the yield is.

The yield is the amount of profit per seat, so a seat costing the airline $1000 and being sold for $1169 gives a yield of $169 or 16.9%. If the yield drops by 17% then it has dropped to $141 and still has a yield of 14.1%
A drop in yield accompanied by an increase in load factor would equate to an increase in profit,
Now, if the revenue dropped by 17% with a similar drop in costs then AIR would make a loss.

Jantar - yield is revenue per RPK (bums on seats) - not profit

[OldGuy]

You're not the only one with the finger hovering over the buy button I can assure you of that mate. Another 32 cent fall this week would see me throw the rule book on diversification into the round filing system if you catch my drift

haha, I LOVE that filing receptacle!

[couta1]

Come on Roger, you know you want to join me at 20% of portfolio allocation

[winner69]

Must go for a wander along the waterfront again .....and take a photo later today of the ticker showing $2.69 again

And plan on another visit in a week or so tosee it tick over $3