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Thread: AIR NZ

  1. #2041
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    At least they muddied the waters with multiple possible destinations this time! The public knew about the YVR route about a year before it was confirmed.

  2. #2042
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    Quote Originally Posted by Zaphod View Post
    At least they muddied the waters with multiple possible destinations this time! The public knew about the YVR route about a year before it was confirmed.
    My confident prediction is it will be GRU - Sao Paulo Brazil staring 3x weekly in September 2015.

    This route is viable now with the Singapore alliance, and with Avianca Brazil set to join Star mid 2015. The 787 is configured well for the leisure heavy traffic expected.

    Future US routes are not needed urgently, but i do expect Houston to be announced sometime next year.

    In other news the jet fuel price has moved down back to a $16 spread to Brent. It's now near $80 bbl... This puts my $100 USD bbl and 45-50c eps next year scenario into play, should things stay as they are. A couple of brokers have increased price targets after their economists decreased their oil price expectations. Several now have $2.80 targets, but they are still being too conservative on both revenue and fuel costs. Most are expecting brent to return to $80 by mid-late next year. I wouldn't even attempt to predict.

    Somewhat teasingly Qantas has rallied hugely, on improving yields in Australia. This bodes well for VAH to return to profit and contribute to Air NZ's profits (could even do so this year!)

    The stock is looking very compelling right now, so fingers crossed fuel stays down and positive trends continue.

    mod
    Last edited by modandm; 11-12-2014 at 09:23 AM.

  3. #2043
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    I hope you are right. The CEO is on record in recent days saying South America is noticably missing from the AIR map. LAN as the only carrier between NZ and SA desperately needs competition with their constantly full planes, average service and high prices.

    Quote Originally Posted by modandm View Post
    My confident prediction is it will be GRU - Sao Paulo Brazil staring 3x weekly in September 2015.

    This route is viable now with the Singapore alliance, and with Avianca Brazil set to join Star mid 2015. The 787 is configured well for the leisure heavy traffic expected.

    Future US routes are not needed urgently, but i do expect Houston to be announced sometime next

    mod

  4. #2044
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    Quote Originally Posted by modandm View Post
    but i do expect Houston to be announced sometime next year.


    mod
    Any reason you'd pick Houston over chicago?

    I'd have thought the recent All Blacks tour to Chicago where AirNZ threw some extra flights on to be a good indicator of what they were trialing.

  5. #2045
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    Chicago is the most logical choice IMHO

  6. #2046
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    Quote Originally Posted by modandm View Post
    My confident prediction is it will be GRU - Sao Paulo Brazil staring 3x weekly in September 2015.

    This route is viable now with the Singapore alliance, and with Avianca Brazil set to join Star mid 2015. The 787 is configured well for the leisure heavy traffic expected.

    Future US routes are not needed urgently, but i do expect Houston to be announced sometime next year.

    In other news the jet fuel price has moved down back to a $16 spread to Brent. It's now near $80 bbl... This puts my $100 USD bbl and 45-50c eps next year scenario into play, should things stay as they are. A couple of brokers have increased price targets after their economists decreased their oil price expectations. Several now have $2.80 targets, but they are still being too conservative on both revenue and fuel costs. Most are expecting brent to return to $80 by mid-late next year. I wouldn't even attempt to predict.
    Somewhat teasingly Qantas has rallied hugely, on improving yields in Australia. This bodes well for VAH to return to profit and contribute to Air NZ's profits (could even do so this year!)

    The stock is looking very compelling right now, so fingers crossed fuel stays down and positive trends continue.

    mod
    Good post. Brent crude futures for Dec 2015, (half way point of Air's 2016 year now under $70)
    https://www.tradingfloor.com/futures/lcoz5
    Perhaps you could input that into your model for 2016 and update us. I agree and see deep value in AIR notwithstanding its recent strong run.
    Cheers.

  7. #2047
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    Quote Originally Posted by GuessX View Post
    Any reason you'd pick Houston over chicago?

    I'd have thought the recent All Blacks tour to Chicago where AirNZ threw some extra flights on to be a good indicator of what they were trialing.
    They only operated to Chicago because that was where the game was to be played.

  8. #2048
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    Yes KW and what did I tell ya ? Extract
    The airlines will still be making more money. They forecast record net profit of $25 billion (NZ$32.43) next year - well above the $19.9 billion this year, the US$10.6 billion in 2013 and US$6.1 billion in 2012.

  9. #2049
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    Monthly operating stat's give a breakdown of the various regions for the month and YTD with comparisons to previous year if you want to do some research.

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    To answer KW's valid point.

    1. Given the weakness in NZD USD, even if prices are flat in USD, yield will be up in NZD. To china tickets can't get much cheaper anyway

    2. Air faces limited competition and doesn't need to lower prices. This is why its one of the best in the world. You can bet Qantas won't be dropping prices, and jetstar NZ is only at breakeven today so why would they. What routes have competition, next to zero. Of course they will say that they are, and even if they did 1-2% would be of no consequence given the fall in costs.

    3. If price falls quantity demand rises - therefore a yield decline is likely to be more than offset by a volume increase taking total revenue higher.

    4. If supernormal profits are being made (as I expect to be) then yes competition will be attracted, but for the small market of NZ that will take years to eventuate. On the highly competive routes like New-York London that might take weeks or months...

    Your concern is well grounded, but its not an issue to worry about yet.

    P:S - something like 80% of trans tasman traffic is Kiwi, and prob even higher on Air NZ flights... I don't worry about the ozzie consumer.
    Last edited by modandm; 11-12-2014 at 11:30 AM.

  11. #2051
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    Morningstar rating 11/12 HOLD valuation $2.50

  12. #2052
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    Oh come on $3 at least Morningstar...... must be automated or something.
    h2

  13. #2053
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    ......or KW had an imput.
    h2

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    Quote Originally Posted by Baa_Baa View Post
    Morningstar rating 11/12 HOLD valuation $2.50
    That settles it then, they know nothing. Its a strong buy right up to $3.00 and beyond.

  15. #2055
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    AirNZ holding a media conference at their head office this morning.

    NZHerald speculating it's the USA route being announced with longer term strategy to get into South America (well apparently it's been updated as I typed tipping South America), Stuff reporting it's a new South America route.

    http://www.stuff.co.nz/travel/news/6...American-route

    http://www.nzherald.co.nz/business/n...ectid=11372894
    http://www.nzherald.co.nz/business/n...ectid=11372895

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  17. #2057
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    Looks like a good expansion to me. Code sharing and avoiding going head to head with LAN on the Santiago route. All good sensible stuff.
    I reckon some people underrate AIR's management ability and Kiwi's propensity to fly their own national airline. Its a Kiwi thing.

  18. #2058
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    Quote Originally Posted by Roger View Post
    Looks like a good expansion to me. Code sharing and avoiding going head to head with LAN on the Santiago route. All good sensible stuff.
    I reckon some people underrate AIR's management ability and Kiwi's propensity to fly their own national airline. Its a Kiwi thing.
    Very good move. What Kiwi wouldn't want to see the Allblacks play the Pumas live in Argentina flying AIR. Choice choice
    Last edited by h2so4; 12-12-2014 at 09:30 AM.
    h2

  19. #2059
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    Quote Originally Posted by theace View Post
    According to the article LAN Chile are going to replace their A340's on this route with 787's. The normal routing for Australasian flights to South America is to dive deep into the Southern Ocean. This is made possible by the four engine A340 complying with ETOPS rules. These rules specify how far in time any aircraft can fly beyond an airfield in case of an emergency. An A340 or 747 because it has four engines has a greater ETOPS range than a two engined aircraft like the 777 or 787.

    I am curious how LAN Chile and Cullen Airlines will handle this issue.

    Boop boop de do
    Marilyn

    PS. A340's while excellent aircraft are getting long in the tooth and in the words of one commentator are thirstier than an Irishman at a wake. Still given plumeting fuel prices Cullen Airlines could have leased some from their mates at Etihad to prove up the route

  20. #2060
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    Quote Originally Posted by Marilyn Munroe View Post
    The normal routing for Australasian flights to South America is to dive deep into the Southern Ocean.
    This site has a great circle route mapping tool to illustrate this concept;

    http://www.gcmap.com/mapui?P=akl-eze

    For a wow! view enter the Sydney - Buenos Aires route into the search box. SYD-EZE

    Boop boop de do
    Marilyn
    Last edited by Marilyn Munroe; 12-12-2014 at 01:07 PM. Reason: Spelling

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