AIR - Air NZ.

[Bobdn]

The late Adam Thomson (1926–2000), chairman of Caledonian Airways from 1961 to 1970 and managing director and chairman of British Caledonian Airways from 1970 to 1987, said in 1984, “A recession is when you have to tighten your belt; depression is when you have no belt to tighten. When you’ve lost your trousers — you’re in the airline business.”

Excellent!

[fish]

Excellent!

One to remember.
Thanks

[see weed]

The late Adam Thomson (1926–2000), chairman of Caledonian Airways from 1961 to 1970 and managing director and chairman of British Caledonian Airways from 1970 to 1987, said in 1984, “A recession is when you have to tighten your belt; depression is when you have no belt to tighten. When you’ve lost your trousers — you’re in the airline business.”

That's funny, I was thinking of buying a new pair of pants and some more AIR with the $42,000 div next Monday.

[Beagle]

AIR management hedged their maximum allowable amount, (within their policy) in January 2016 when oil was $30 barrel. AIR are enjoying that hedging this quarter.
Spot price is well under $55 barrel and hedging out to early 2017 is well under $55 barrel. Last year's average if I remember correctly was $60 barrel.
Conclusion AIR's estimate for fuel based on $55 barrel average this year looks to have a pretty reasonable degree of conservatism built into it.
I remain comfortable with $500m before tax which is 32 cps after tax, (apply whatever PE you think is right for the circumstances for whatever part of the cycle you think we are in), I think 7 is reasonable = fair value $2.24. Lines up pretty well with average analyst view.

[skid]

That's funny, I was thinking of buying a new pair of pants and some more AIR with the $42,000 div next Monday.

Buying more shares with the divi pretty much adds the lost value(Dividend) back to your AIR shares and (give or take)puts you back where you started---Everything else depends on the SP performance

[Poet]

AIR management hedged their maximum allowable amount, (within their policy) in January 2016 when oil was $30 barrel. AIR are enjoying that hedging this quarter.
Spot price is well under $55 barrel and hedging out to early 2017 is well under $55 barrel. Last year's average if I remember correctly was $60 barrel.
Conclusion AIR's estimate for fuel based on $55 barrel average this year looks to have a pretty reasonable degree of conservatism built into it.
I remain comfortable with $500m before tax which is 32 cps after tax, (apply whatever PE you think is right for the circumstances for whatever part of the cycle you think we are in), I think 7 is reasonable = fair value $2.24. Lines up pretty well with average analyst view.

I've decided that I'm not going to worry about the cost side of the equation this year (I'll reconsider this strategy if there are any large movements in the oil price or exchange rate between now and end of period). AIR probably have a very accurate picture of the cost side of the equation and as PT said earlier, this will already be factored into the $400 to $600m guidance.

That just leaves revenue.

My guess is that the $600m guidance has factored in 5% revenue downturn yoy and that the $400m guidance has factored in a 10% downturn (given that the revenue shortfall will go straight to profit line and $200m guidance range is around 5% of revenue)

So two months into the year, we have revenue only down 1.5% yoy therefore I'm currently of the opinion that ytd we are tracking at and probably above the $600m profit line.

Of course, plenty of time for further deterioration in revenue and I'll certainly be watching op stats closely for signs of this. Just right now though, we appear to be flying in clear air.

[winner69]

AIR said that F16 MOPS was US$54 / bbl (down from US$90 in F15)

What's MOPS

Still learning

[Beagle]

AIR said that F16 MOPS was US$54 / bbl (down from US$90 in F15)

What's MOPS

Still learning

https://en.wikipedia.org/wiki/Mean_of_Platts_Singapore

[winner69]

https://en.wikipedia.org/wiki/Mean_of_Platts_Singapore

Ah so

MOPS is the average of a set of Singapore-based oil product price assessments published by Platts, a global energy, petrochemicals, metals and agriculture ...

[Beagle]

Should have been in the appendix, glossary of terms...suppose they felt the need to leave us to do some homework of our own