AIR - Air NZ.

[winner69]

And wine merchants will be suffering as well .....AIR proudly touted they poured 963,202 bottles of wine last year.

Wowsers ...wine and flying don’t mix ...should stop it.

[Beagle]

Suppose they will keep most of the $1.4 billion prepaid fares whether punters fly or not. That could help

It will for a few months. What could be quite interesting when AIR report later this month is if there's any caution in the commentary regarding forward bookings ? This is arguably the best business in N.Z. to get a feel for whether people's intentions are changing as $1,372m in forward bookings as at 30 June 2019 indicates more than 3 months forward travel.

We probably won't see any change in prepaid travel as at 31 December 2019 with the numbers coming out shortly but it will be interesting to see where this number stands as at 30 June 2020 ! I am sure they will have an inkling of how this number might be changing when they report their half year results later this month...and if people's intention to defer discretionary travel snowballs then look out !

Hope SUM have their annual meeting in Auckland this April. Its a long drive to Wellington and back.

[Snow Leopard]

Most people I know who work for AIR rated Chris Luxon very well and are sad he's gone.....

Everybody I know in the airline industry did not think much of him at all (I am being polite here).

Results out a week Thursday.
The commentary around future booking will be the thing that we are all interested in, mainly whether they are seen as realistic.

[BlackPeter]

Just noticed - flightcentre ads popping up in my browser - they started to discount flights.

Just a couple of hundred dollars so far, but I suppose this is just the beginning :

[Beagle]

Everybody I know in the airline industry did not think much of him at all (I am being polite here).

Results out a week Thursday.
The commentary around future booking will be the thing that we are all interested in, mainly whether they are seen as realistic.

Yes that will be interesting. I had a couple of good chats with him after annual meetings and thought he communicated very well. During the annual meetings he articulated his strategy very well. Forward booking info is going to be very interesting. Perhaps more to the point, of those that have booked already, what percentage will actually fly ?

[peat]

airlines are a very low margin business with very high fixed overheads and very high staff costs, (plus in AIR's case a vast number of troughers getting paid far too much).

THIS.
Any dropoff in revenue just screws the P+L. I've seen it myself a long time ago when I used to produce the business unit P+L's.

DISCLAIMER (Short position)

[Preston]

Everybody I know in the airline industry did not think much of him at all (I am being polite here).

Results out a week Thursday.
The commentary around future booking will be the thing that we are all interested in, mainly whether they are seen as realistic.

Yeah because they were probably working for him, but he's working for shareholders. In the time he was there, share price more than doubles and they continue to get dividends. I would say that investors would have been happy with that.

The thing is in airlines, a good CEO is either good for shareholders or employees, I don't think they can be both.

[Beagle]

THIS.
Any dropoff in revenue just screws the P+L. I've seen it myself a long time ago when I used to produce the business unit P+L's.

DISCLAIMER (Short position)

AIR made money throughout the GFC which shows it is very resilient...but people were seriously concerned about their finances then...being seriously concerned about the prospect of death is something entirely different and I would say potentially far more serious. If they start flying with 8% lower load factors at an average of 2-3% lower yields that $400-500m less revenue effect as you quite rightly suggest, comes straight off their bottom line. They're smarter than that though and will reduce frequency of service to try and keep load factors profitable but there's only so much you can do when demand falls significantly before a company becomes like a sick cat chasing its own tail down in a descending tailspin.

On the weekend I heard Hello travel advertising return fares to Australia for $299 inclusive of taxes, (of which they are very steep to exit Australia) I would think close to half that fare is taxes and $299 is not something I can recall for a very long time which gives an interesting insight into where airfares might be headed. i.e. Its not just load factors that could come under enormous pressure, yields could too.

Disc: No position but wish I could find an easy way to short this.

[Preston]

Pretty interesting chart here too. Had to break it down to the 4 hour to get a good fit but it looks like a decline to 2.70 is happening right now and this will be the area to watch. A close below 2.70 has 2.6 and then 2.5 in sight. Pretty solid support at 2.50 so don't think its a straight shot, but 2.40 could be on.

Attachment 11028

[James108]

About to book very expensive flights to Nelson through air NZ, not put off by Coronavirus at all. Wouldn’t fly to Asia though.