AIR - Air NZ.

[Beagle]

Quick skim read all looks pretty good. Might have to trim my expectations for special divvies in 2020 2021 and 2022 down as they're obviously gearing up for massive capex in 2023-2025 with 8 replacement widebody aircraft in 3 years, that's probably something in the order of $2b+

Must admit Luxon has built a good culture there. Good they're leasing 2 x 777 aircraft to cover for RR problems. RR will cop some serious heat in terms of cost recovery.
Excellent that their business model has been able to be adjusted to cope with rising fuel costs.

Pretty slick operation really.

[777]

Quick skim read all looks pretty good. Might have to trim my expectations for special divvies in 2020 2021 and 2022 down as they're obviously gearing up for massive capex in 2023-2025 with 8 replacement widebody aircraft in 3 years, that's probably something in the order of $2b+

Must admit Luxon has built a good culture there. Good they're leasing 2 x 777 aircraft to cover for RR problems. RR will cop some serious heat in terms of cost recovery.
Excellent that their business model has been able to be adjusted to cope with rising fuel costs.

Pretty slick operation really.

The culture is a continuation of what Fyfe created. And Norris before him. It is a different company since the exit of Brierley's.

[Beagle]

The culture is a continuation of what Fyfe created. And Norris before him. It is a different company since the exit of Brierley's.

Agreed, you don't build a culture like that overnight. http://www.sharechat.co.nz/article/f...d-earningshtml

Based on 22 cps annual dividends fully imputed (22 / 0.72) / 315 the forecast gross yield is 9.7%. I see that going forward as sustainable, (plus possible special's in the next few years) and the company is trading in an environment where according to IATA forecasts international demand is growing at ~ 7%.

Now we have this update in and confirmation of profit forecast we know their business model is demonstrating good resilience so despite the fuel price headwind for FY19 I think $3.15 is pretty sound buying in a market that's broadly considered to be very fully priced.

[couta1]

The $990m is the fuel bill ...not the profit

Yes indeed, my bad. I'm very impressed with this update, they say the test of any relationship or business is hard times and this company have shown iron clad character to date. Disc-Holding.

[Benny1]

Looks a solid presentation from a quick skim... Noticed the 777-200 replacements have slipped back a couple of years..
Extra domestic A320 capacity all good too.
Not too sure if this stock could get slammed at some stage if/ when some international institutions decide to pull some money out of the NZ market seeing US interest rates are on the slow rise.. especially with AIR having such a large percentage owned by these institutions..
Something like (78%) of the free float stock?
Any thoughts?

[Beagle]

AIR's gross yield amongst the very highest in the world for airlines and compares extremely favorably with all the U.S. airlines so I see the shares as still be very attractive to hold in that and other regards despite a slowly rising interest rate environment. As Couta1 suggested they have weathered some pretty challenging things this year very well....Rolls Royce wearing the vast majority of the pain, that's the principle's of natural justice playing out very nicely !

As you suggest mate, that's a solid presentation from a team that look like they're in good form. Notwithstanding the possible fuel price headwind for FY19 trading cum a ~ 11 cent fully imputed divvy in Sept I think there's a reasonably sound case to be made for holding a few for dividend yield as part of a well diversified portfolio.
I'm expecting about $400m after tax for eps of ~ 36 cps so the FY18 PE is about 8.75 on my forecast. Headwind for fuel already fully priced in ?, you folks be the judge.

[Beagle]

Magic Leap partnership http://www.scoop.co.nz/stories/BU180...magic-leap.htm
Could produce an experience that's pretty cool.

[Joshuatree]

Cool Roger!. as long as they put the headphones on after the plane has left for NZ etc or they may never feel the need to fly, and live the virtual life at home.

[couta1]

I really love those graphs on p13&p14 of that presentation, low earnings volatility and a 418% shareholder return over 10yrs, yet some go on about the highly cyclical nature of the stock Lol.

[winner69]

I really love those graphs on p13&p14 of that presentation, low earnings volatility and a 418% shareholder return over 10yrs, yet some go on about the highly cyclical nature of the stock Lol.

Very fortunate choice of timeframe methinks

In June 2007 (just over 10 years ago) the share price was $3.13 ....what is it today ....be hard pushed to get 418% return in that 11 year period


But that chart does look really cool eh ....give them credit for telling an amazing story .....give a few the warm fuzzies no doubt

Share price chart shows cyclical tendencies