AIR - Air NZ.

[gonzo56]

What's up with the AIR SP? Their NTA/Share are worth more than their current share price!

So you can buy a share at $0.915 and own a company that has tangable assets worth $1.32 per share.
Their Dividend Yield alone is quite good at 6%, far more than the interest you would get at a bank!
And they are going to pay out very soon with a 2.5-3 Cent dividend in March.

We need more buyers in NZ! Or is there something I don't know about.. (other than the slowly recovering economy!)

[Newman]

Where did you get this number? Air NZ has not made an announcement to the market on its accounts.

What's up with the AIR SP? Their NTA/Share are worth more than their current share price!

So you can buy a share at $0.915 and own a company that has tangable assets worth $1.32 per share.
Their Dividend Yield alone is quite good at 6%, far more than the interest you would get at a bank!
And they are going to pay out very soon with a 2.5-3 Cent dividend in March.

We need more buyers in NZ! Or is there something I don't know about.. (other than the slowly recovering economy!)

[CJ]

They loss a million a week on their long haul. Those planes would make up a significant part of that $1.32 NTA.

There is also an overhang as the Govt has said it will sell 25%. If they are struggling to find buyers for the current 25% which is floated (indicated by the low share price), how are they gong to find buyers for another 25%

Disc: Hold and believe they are currently undervalued.

[gonzo56]

Where did you get this number? Air NZ has not made an announcement to the market on its accounts.

It's the fiscal year ended June 30, 2011. It's all over the net CNBC's Christine Tan caught up with CEO Rob Fyfe to find out what is his long-haul strategy. If you are referring to the dividend, that is just a guess based on the last few.
If you are referring to their NTA/Share, which will mostly be their planes. Check this out.

Attachment 3802

There is also an overhang as the Govt has said it will sell 25%. If they are struggling to find buyers for the current 25% which is floated (indicated by the low share price), how are they going to find buyers for another 25%.

I have no idea...

[gonzo56]

Wow Sparky, 70% on what it is today, I do like the sound of that. It was odd though that when the CEO news was formally announced the SP went up 2% in the middle of the day...
I would say your nervousness would be valid though it is looking like we will see a rebound, for how long it continues who knows.

[Jaa]

Thanks for the write up modandm, always insightful.

I see their new route is to Bali in the NZ winter. I was going to suggest this as the next logical addition to their asian routes. I flew to Bali 1.5 yrs ago with Virgin from Wellington via Brisbane and the flights weren't fantastic or cheap. 6 hours is a long time on a cramped 737 without even free water and no entertainment! Also the 10 hrs lay over in Brisbane on the way back wasn't ideal.

Positives

• Air NZ will be #1 on the route (used to be their key requirement)
• Great destination
• Alternative way into Asia and means of connecting with the Asian low fare operators as they all fly to Bali.
• Will fit in nicely with backpackers round the world tickets which usually go Europe>Asia>Aus/NZ>Sth or Nth America>Europe

Negatives

• Not much return demand from Indonesia but who knows they could create it. Indonesia has plenty of people amongst its 200m that can afford to fly to NZ and that number is increasing rapidly.
• No suitable Indonesian code share partner available as almost all their airlines are on the European black list! Garuda came off it a few years ago.
• A leisure not a business market. Seats to suit will help.

Only 3 months a year so small beer for now but has potential. Might be able to maintain a year round frequency albeit via Australia with the Virgin codeshare.

[tony64peter]

Qantas to stop flying AKL - LAX from May 6. This will give AIRNZ a monopoly on this route. Should make it more profitable on the North American routes.

[modandm]

Air NZ new destinations - Bali

Great route imho - represents a shift in NZ thinking towards tourist destinations and lower fares which it has shown it can make money with on trans tasman. This route will be popular with students young people and hopefully some retirees up in Business at those reasonable fare levels. Thailand will be the big loser as $1000-$1200 return is cheaper than going to Bankok/Phuket, and for a similar experience. It is also 2/3rds as far so NZ costs should be lower. I see this as a great way of further marginalising Jetstar's AKL-SIN flight as this flight is used by many holidaymakers going to Bali and Thailand. It also impacts Jetstar's indirect offering via Australia. NZ is really going after Jetstar with S2S etc and now grabaseat + bag domestically. I have always wanted to check out Bali - but always was too hard compared to Thailand - no longer.

Sunshine Coast
Good to see NZ/VAH looking to continue to grow the TT. Can't see this one lasting year round im afraid though because realistically Brisbane is very close and Sunshine Coast is not as big as Gold Coast (by a long way). I would have preferred NZ to head to Newcastle but maybe further down the track. Agian NZ trying to further build the AKL hub by offering Aussies one stop -LAX/SFO/YVR without going through SYD. The connection to Queenstown also mentioned.

Qantas pulls out of AKL-LAX
Great news for NZ. This should turn around the trend of declining US RPKs. NZ has mentioned increasing capacity and I would expect NZ 5/6 to go daily year round. This still leaves a capacity shortfall but with United IAH-AKL supposed to come online late this year supply will return to normal. I am not expecting Jetstar to launch this route as some have suggested - I think it is too far for a330-200 in Jetstar config, they don't have the aircraft spare, and is a premium heavy route (which doesn't suit Jetstar). Jetstar honestly are getting walked on by NZ on the TT market, and AKL-SIN is not performing, I can't see them trying again with a330 vs 777-300er AKL-LAX. I should mention that I think jetstar is likely doing alright on the domestic market (financially if not by reputation).

Jan Stats:
Not as bad as some might think - sure demand was down on US routes but demand to asia was up 10% excluding Japan (NZ added services to PVG and HKG). Yield was up and Load factor fell but was still around 89% - hardly a bad result. I think some commentators just look at the headline -4% long haul number and get excited. Anyway domestic and TT holding up well. Lets see what they come out with in the interim results.

[modandm]

Below expectations - disappointing. The company has been too slow to react and cut costs and cut unprofitable routes from the international business.

787-9 - now further delayed - new delivery schedule agreed and options converted, looks like they will be refitting the 777-200ers.

EDIT: listened to the webcast - 3 787s in CY14 then 3 in CY15. So no real delay here.

[wbosher]

Bad news must have already been priced into the SP, doesn't seem to have had too much effect on it. Not too bad considering...