AIR - Air NZ.

[Beagle]

Well lets just say that ironically, I think that a poster named Baa Baa has got the best handle on that whole scenario.

PS--United code shares so I can understand that statement. But American Airlines having no affect on the mix with their cheaper prices and nice planes--dont agree with that.

Just as well this lamb isn't thirsty for some milk...went looking for any recent insights and if I was a lamb looking for a feed I'd be bleating like there was no tomorrow
On the American airlines thing...this is by no means set in stone..I am looking for AIR to match and the other thing is I tried a variety of dates just flying to LAX in their summer, (renting a Mustang and driving to Las Vegas) and it was generally approx $400 dearer ($1600 to $1700 flying to LAX only) than flying to Las Vegas at $1,222, go figure ?
The other thing these are launch specials by AA to kick off their service which starts in June. Its easy to read too much into initial launch specials in terms of ongoing competition and effect on yields.
AA want to make a sustainable profit on this route just as much as AIR do.

[mikeybycrikey]

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.

No, I pretty sure I'm not wrong about that. Yield, in airlines terms, is the average revenue per passenger per kilometre, before taking out any costs. Some random internet site tells me that it's a "Measure of average fare paid per mile, per passenger, calculated by dividing passenger revenue by revenue passenger miles (RPMs)"

Costs in relation to airlines are really difficult to calculate in a meaningful way. Arguably, the first seat on a flight from AKL-WLG might cost the airline $5,000. Every seat thereafter costs very close to $0.

Current yields at H1 2016 were 27.5c/km (domestic), 12.2c/km (Tasman and Pacific), 10.8 (International), 13.7 (overall group)

It's measured in cents per kilometre or cents per RPK. For example, taking WLG-AKL at 480 km and 27.5c/km that's $132, or AKL-EZE at 10334 km and 10.8 c/km, that's $1,116. These are very rough estimates at revenue per passenger on certain routes to illustrate.

A drop in yield accompanied by an increase in load factor might equate to an increase in profit.

[Beagle]

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

Transferring more funds over into my ANZ securities call account today and then I'm off to the doctor and getting some stronger blood pressure meds in anticipation. This roller coaster getting very exciting...

[couta1]

Transferring more funds over into my ANZ securities call account today and then I'm off to the doctor and getting some stronger blood pressure meds in anticipation. This roller coaster getting very exciting...

Take high potency garlic for your blood pressure and I'll send you a free bottle of sleep drops, there your all sorted without leaving your office.

[Balance]

Transferring more funds over into my ANZ securities call account today and then I'm off to the doctor and getting some stronger blood pressure meds in anticipation. This roller coaster getting very exciting...

Some big crossings were done on Friday including a line after market close at $2.46. I would say the big seller (s) have been taken out.

[Raz]

Just as well this lamb isn't thirsty for some milk...went looking for any recent insights and if I was a lamb looking for a feed I'd be bleating like there was no tomorrow
On the American airlines thing...this is by no means set in stone..I am looking for AIR to match and the other thing is I tried a variety of dates just flying to LAX in their summer, (renting a Mustang and driving to Las Vegas) and it was generally approx $400 dearer ($1600 to $1700 flying to LAX only) than flying to Las Vegas at $1,222, go figure ?
The other thing these are launch specials by AA to kick off their service which starts in June. Its easy to read too much into initial launch specials in terms of ongoing competition and effect on yields.
AA want to make a sustainable profit on this route just as much as AIR do.

The domestic lowest cost usually from LAX to Vegas is 60$ one way, so minimum extra cost 120$ to Vegas, lowest cost retail.

If you are flexible on dates then prices will be lower with competition however if seasonal or peak times they will compete less unless they are not meeting load factor benchmarks. I think Qantas is suffering as we went over for the school holidays on $1000 seats. Been along time since i have been on Qantas and never had that price for school holidays since the GFC. They have offered the same for the September holidays. Noted less Aussies in the tourist traps in great LA and the flights were far from full. Instead AIR matched for September so with AIR next time. Qantas service and product on our flights was inferior to AIR. The other items not picked up yet is AA is likely to offer a superior product with the 787 on the route however for $20 full internet access for the trip is a real entertainment factor point of different. AIR in time will need to act upon that aspect.

[couta1]

I see the Chinese are now taking to skiing like ducks to water and they are heading our way this winter(Some of the fields have hired Mandarin speaking hosts in readiness for this influx)coupled with the intro of night flights into Q/town, we should see some excellent monthly stats from Air this coming winter(The only downside is I will have to fight for more field space with the Auckland/Aussie and Chinese invasion) never mind you can't always have your cake and eat it to aye.

[Raz]

I see the Chinese are now taking to skiing like ducks to water and they are heading our way this winter(Some of the fields have hired Mandarin speaking hosts in readiness for this influx)coupled with the intro of night flights into Q/town, we should see some excellent monthly stats from Air this coming winter(The only downside is I will have to fight for more field space with the Auckland/Aussie and Chinese invasion) never mind you can't always have your cake and eat it to aye.

It is a pain though, limited capacity is a big problem..have to book way ahead...then fight through the crowds...

[Balance]

It is a pain though, limited capacity is a big problem..have to book way ahead...then fight through the crowds...

Nothing to be concerned about - the country is due for a major tourism infrastructure upgrade for years and with confidence, businesses will take up the challenge and upgrade and increase capacity to meet the demand. This is (and has always been) how tourism works in NZ.

[Beagle]

Double checked on AA website this morning. Launch special for their new service now gone since we're now in May and now charging $2,100 return to Las Vegas...same as AIR N.Z.
I think this highlights the fallacy of thinking you can make a judgement call on future yields just based off a competitors initial very limited time launch special.
As I said earlier this morning, you can be sure AA want this to be a sustainable and profitable route for them...no point flying a route that loses you money.