AIR - Air NZ.

[Beagle]

I raise your TA with some compelling FA.
Second half robustness of forecast really surprised me as did the speed at which they've been working their way through the RR engine issue.
Company confident it can beat FY17's result so 35-37 cps appears to be on the cards putting the current year PE at just under 8.5. This is about a PE of 3 lower than the average of a group of other airlines I follow. I am surprised how well the company has dealt with some curly challenges in the last few months and am happy to be back for the increased dividend at a price some 40 cents lower than the average price I exited my stake for several months ago when the risks were significantly higher.
SP got whacked down at close buy VWAP was around my buy-back price so I am a happy dog.
Shall enjoy some Kailua and A2 milk for supper and watch the planes fly over the Manukau harbor on their way into land at Auckland airport from my deck later this evening.

If I'm really lucky I might catch the faint whiff of some spent aviation fuel to enjoy with my A2 milk, (added especially for your benefit Raz and Baa Baa)

[winner69]

With their old gas guzzling planes one would not think so..just getting dream liners and their service sucks...still...

Qantas - increase in fuel costs A$58 million, (or about 4 per cent to A$1.54 billion (SMH article)

AIR - increase in fuel costs of NZ$80 million (or about 20 per cent to NZ$470 million (AIR Accounts)

Dont the old gas guzzlers fly heaps further than AIRs super efficient fleet

Even in $ terms QAN increased fuel bill less than AIRs ....in % terms heaps better

Something don't gel

[Beagle]

I guess leasing in those old inefficient planes to temporarily replace Dreamliners didn't help. A340 in particular with its 4 engines known to be a fuel hog. RR might be picking up the lease cost but AIR wearing the extra fuel cost ?

You'll probably find the answer lies in different level's of hedging between AIR and QAN for their relative first half's compared to PCP. It is what it is and a solid result for AIR and a good outlook that really surprised. Fleet age going down to just over 6.5 years in due course. Once all those 787's back in the AIR it'll all be good. PE is cheap as chips and risk dissipating by the day on the RR engine issue.

[Raz]

Qantas - increase in fuel costs A$58 million, (or about 4 per cent to A$1.54 billion (SMH article)

AIR - increase in fuel costs of NZ$80 million (or about 20 per cent to NZ$470 million (AIR Accounts)

Dont the old gas guzzlers fly heaps further than AIRs super efficient fleet

Even in $ terms QAN increased fuel bill less than AIRs ....in % terms heaps better

Something don't gel

The smartest people in the room on hedging seem to work for QAN...

[Baa_Baa]

TA never lies because it's already happened, but granted it's a matter of interpretation. FA is very helpful because it's now with a sniff of the potential future, but granted it's a matter of interpretation. That's why we use both.

So let's look at some market price logic. In AIR's best year ever, it chinned the bar at $3.60ish then fell back to the SP highs going back to 2007 (that's now, by the way), so assuming this is its second best year ever it shouldn't get quite that high again - also assuming the current SP down trend does reverse, which isn't apparent at this stage.

I get it that there's a tasty dividend stream along the way and you can buy an earner if you don't worry about capital, but this punter doesn't do capital losses on the off chance that dividend payouts are greater than the head share loss.

With AIR the capital movements far exceed the dividends per share, hence the analogy to being a trading stock firstly, a divi stripper if you're onto it and lucky, but a long term hold .. yeah nah. Too many things go wrong with airlines to risk capital just for the dividends.

I think AIR is a great trading share, the savvy can make a truck load more money getting in and out around the highs and lows with a few divies as a bonus if coincidentally holding when the divi is paid out (a nice bonus). So for AIR TA is more helpful imho than all the intricacies of interpreting FA, let alone using FA to decide an entry or exit.

Jmho, lucky we're all different or there wouldn't be a market.
BAA

[Joshuatree]

Im focused on USA and Global mkts are we in for a few more crazy super fast corrections? Otherwise i would have been tempted back in today.

[Beagle]

TA never lies because it's already happened, but granted it's a matter of interpretation. FA is very helpful because it's now with a sniff of the potential future, but granted it's a matter of interpretation. That's why we use both.

So let's look at some market price logic. In AIR's best year ever, it chinned the bar at $3.60ish then fell back to the SP highs going back to 2007 (that's now, by the way), so assuming this is its second best year ever it shouldn't get quite that high again - also assuming the current SP down trend does reverse, which isn't apparent at this stage.

I get it that there's a tasty dividend stream along the way and you can buy an earner if you don't worry about capital, but this punter doesn't do capital losses on the off chance that dividend payouts are greater than the head share loss.

With AIR the capital movements far exceed the dividends per share, hence the analogy to being a trading stock firstly, a divi stripper if you're onto it and lucky, but a long term hold .. yeah nah. Too many things go wrong with airlines to risk capital just for the dividends.

I think AIR is a great trading share, the savvy can make a truck load more money getting in and out around the highs and lows with a few divies as a bonus if coincidentally holding when the divi is paid out (a nice bonus). So for AIR TA is more helpful imho than all the intricacies of interpreting FA, let alone using FA to decide an entry or exit.

Jmho, lucky we're all different or there wouldn't be a market.
BAA

Fair enough Baa. Probably drunk on profits from A2 milk and gone back to my old stomping ground like a dog returning to its own vomit lol
Lets see how we go. Only dipped a paw in the water so can't get my fur burned too badly

[Raz]

TA never lies because it's already happened, but granted it's a matter of interpretation. FA is very helpful because it's now with a sniff of the potential future, but granted it's a matter of interpretation. That's why we use both.

So let's look at some market price logic. In AIR's best year ever, it chinned the bar at $3.60ish then fell back to the SP highs going back to 2007 (that's now, by the way), so assuming this is its second best year ever it shouldn't get quite that high again - also assuming the current SP down trend does reverse, which isn't apparent at this stage.

I get it that there's a tasty dividend stream along the way and you can buy an earner if you don't worry about capital, but this punter doesn't do capital losses on the off chance that dividend payouts are greater than the head share loss.

With AIR the capital movements far exceed the dividends per share, hence the analogy to being a trading stock firstly, a divi stripper if you're onto it and lucky, but a long term hold .. yeah nah. Too many things go wrong with airlines to risk capital just for the dividends.

I think AIR is a great trading share, the savvy can make a truck load more money getting in and out around the highs and lows with a few divies as a bonus if coincidentally holding when the divi is paid out (a nice bonus). So for AIR TA is more helpful imho than all the intricacies of interpreting FA, let alone using FA to decide an entry or exit.

Jmho, lucky we're all different or there wouldn't be a market.
BAA

That is how I see it usually however taking the dividend out does provide a buffer for the play...now we will see if we get an uplift...

[fish]

That is how I see it usually however taking the dividend out does provide a buffer for the play...now we will see if we get an uplift...

I took my eye off the ball with this one.I havnt much margin-lending capital left to invest .
SP AIR is influenced by so many factors.
I only like too invest when I am confident sp is oversold and less chance of losing capital
Really wish I was in at this time.

[winner69]

QAN and their old gas guzzlers and their ****e service outperformed AIR (financially if not operationally) by quite a margin in the last half year

• QAN earnings up 15% while AIR down or flat if that sounds better
• QAN RASK up 3.5% while AIR only up 2.0%
• QAN npbt Margin up 0.7% points to 12.3% while AIR margin down 1.1% points to 12.0%
• QAN management of fuel price increases FAR FAR better

No wonder QAN trades at higher multiples than AIR — deserves to on financial performance as well as the trans-Tasman ‘premium’ of being the main airline on the bigger ASX