AIR - Air NZ.

[winner69]

To appease the public who might see AIR profits as down right outrageous

Air New Zealand says increasing competition will continue to push down air fares and the airline will sell around 800,000 fares for under $100 this year
http://www.nzherald.co.nz/business/n...ectid=11700658

[stoploss]

Right so mum and dads are going to come to the rescue to stave off Insto tree shaking ? Any Jonny come latelys or divi hunters got burnt on the companies own guidance outlook this looks like it could go sub $2 prior to going ex divi. With more and more competition I wouldn't be supposed for the lower band of $400m being downgraded again.

boysy , on the TIL thread you constantly reference the PE of TIL vs BWX ( or whatever it is )
How about you do a bit of QAN vs AIR then come back and let us know what the score is ?
btw , 100 share have gone through at 4.72 TIL you better update the thread ..........

[Beagle]

I listened in on the call. Free cash flow really accelerates after FY18. 20 cps sustainable fully imputed dividend going forward was strongly inferred given strong free cash flow, strength of liquidity and financial strength. Based on a SP of 1.90 (2.25 - 0.35 forthcoming divvy), this gives a gross yield of 14.6% on the theoretical ex divvy price. More than compensates me for the risk of investing in this well managed company right across the cycle. Will hold long term.

[see weed]

I listened in on the call. Free cash flow really accelerates after FY18. 20 cps sustainable fully imputed dividend going forward was strongly inferred given strong free cash flow, strength of liquidity and financial strength. Based on a SP of 1.90 (2.25 - 0.35 forthcoming divvy), this gives a gross yield of 14.6% on the theoretical ex divvy price. More than compensates me for the risk of investing in this well managed company right across the cycle. Will hold long term.

This is better than Disney Land. Up 3c now. Maybe all loose fruit gone now. $2.50 here we come and $2.15c ex div.

[Beagle]

This is better than Disney Land. Up 3c now. Maybe all loose fruit gone now. $2.50 here we come and $2.15c ex div.

LOL mate I have never ridden those roller coasters and experienced the high's and lows but I suspect what we're enjoying is a very similar experience The result and outlook is very much as expected as far as I'm concerned. The special dividend is the best case of what I was hoping for and removes any possibility of an Ansett Mk3. I really like the way they're growing the airline in a more disciplined manner now. FY17 capacity growth now 4-6% and two thirds of that is because of the annualisation of Bounes Aires and Houston.

As for the joy of the special divvy and the outlook of ongoing gross dividend returns of 14.6%, oh my goodness After this current fleet modernisation which is ostensibly complete in two or three years time management indicated in the call the next cycle doesn't start till mid next decade ! What are they going to do with all that free cash flow from 2019 to 2025 Superb dividend hound stock.

[Jay]

An awful lost of shares being traded today, $1075K at time of writing, so who is buying/selling?

[Bobdn]

I bought a further 20000 at 2.19 for a grand total of 44000. Air is my fourth largest holding now after CNU, GNE and ANZ.

Didn't see that coming when I woke up this morning.

[Balance]

An awful lost of shares being traded today, $1075K at time of writing, so who is buying/selling?

10.84m shares - broker tells me local selling and offshore institutions (attracted by the unbelievable yield) hovering up the stock.

That's why the sp started going up when the overseas institutions started buying this morning.

[BlackPeter]

...

What BP or anyone else paid years ago is ancient history and of no relevance whatsoever to the current situation. Its all about what the company can earn going forward and a PE of 5.8 is the white hot furnace of this new competitive environment is only half its 10 year PE average.

Absolutely correct. It is only the future which counts. However - sometimes it pays to learn from the past, and AIR (as many other airlines) used to be in the past in situations their management never predicted (and more than once). Whether they are right this time with their predictions - who knows? Buying another ANSETT might kill them; Another 9/11 anywhere in the world and the business will be down for at least a year. A big volcano outbreak on a busy route - and business might be down for months. Remember SARS - travellers just stopped travelling. Oil prices going for the stratosphere again ... and business will be down. Talking about "down": Only one downed plane (may it be by Russians, Ukrainians or any other idiots) - or a plane lost for other reasons and the randomly selected airline might be a goner. AIR was lucky last time.

Now, I realise that while all these things happened during the past decade or two ... they obviously will never ever happen again. Well, at least we don't know. Call this risk ... and risk needs to be paid for.

I agree that the recent numbers for AIR look good ... if we assume everything goes well from here. But will it? I don't know. In my view too many past problems to just call it a spell of bad luck.

Only hindsight will tell whether AIR's current risk premium is high enough.

[Balance]

Of far more relevance is what multiple of NTA a similar company like QAN is currently trading at. I will look into this when time allows.

Some Australian institutions switching out of Qantas into AIR - fascinating to see who has more firepower today to determine the closing price.

Dis. From broker