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Thread: AIR - Air NZ.

  1. #4481
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    Quote Originally Posted by winner69 View Post
    Interesting read. Great link. The last paragraph is very interesting.

  2. #4482
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    Quote Originally Posted by iceman View Post
    Our company has attempted 7 bookings recently on the new AKL-EZE route. 4 times economy seats and each time they've been fully booked. Others business class and been available but a short notice booking last week got the last business class seat. Should note that we always need to book at short notice but my preliminary observation is that load factors on this route are very healthy.
    Our people very happy being able to fly directly after years of having no options but LAN via Santiago, but we have complaints about the fact that AIR now sends those traveling to the regions to their new regional lounge at Auckland airport rather than the relaxing and comfortable Koru lounge. This appears to be yet another kick in the guts for regional travelers from AIR . Will be using this route myself in about 3 weeks and look forward to observing and experiencing it.

    AIR entering this route has also seen competitors lower their prices significantly, which is great.
    Interesting feedback, thanks Iceman. I hear they are looking to expand to five flights per week to Buenos Aires but at this stage I'm not sure they have the fleet capacity to do it ?
    Brent Oil now with a $28 handle...who would have thought ? http://www.cnbc.com/2016/01/17/oil-s...re-lifted.html
    Seems hard to believe that as recently as Q1 Fy16 AIR had some forward cover on oil to work through their system in the $70+ range. ( Source: Most recent fuel hedge disclosure 24/11/2015)
    Last edited by Beagle; 18-01-2016 at 06:41 PM.

  3. #4483
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    Quote Originally Posted by Roger View Post
    Interesting feedback, thanks Iceman. I hear they are looking to expand to five flights per week to Buenos Aires but at this stage I'm not sure they have the fleet capacity to do it ?
    Brent Oil now with a $28 handle...who would have thought ? http://www.cnbc.com/2016/01/17/oil-s...re-lifted.html
    Seems hard to believe that as recently as Q1 Fy16 AIR had some forward cover on oil to work through their system in the $70+ range. ( Source: Most recent fuel hedge disclosure 24/11/2015)
    Expanding to 5x per week is music to my ears. I hope that happens.
    Welcome back

  4. #4484
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    Quote Originally Posted by axe View Post
    Interesting read. Great link. The last paragraph is very interesting.
    Yes certainly happen on the domestic market here..if the load factors are good they naturally will take the higher margin..what is clear is they are happy to allow new competition in and expand the market to take the marginal/price sensitive traveller..always have the risk of losing market share in time..look at Jetstar increase in share based on price while not providing a great robust network/service.

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    Think that sums it up in more ways than one...they don't have the capacity...surely all those oil producers will have to do something to turn it around before they go down. I'm watching the Saudis... first having a go at Iran trying to avoid them returning to the market...now what??
    Last edited by Raz; 18-01-2016 at 06:59 PM.

  6. #4486
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    Quote Originally Posted by iceman View Post
    Should note that we always need to book at short notice but my preliminary observation is that load factors on this route are very healthy.
    You also can not get a one way economy seat from Singapore to Auckland for some days in early February and never for less than $NZ1200++ for any day in the next month and a half.

    February is the peak travel period to NZ and Chinese New Year but still... that is impressive since they have a daily A380 AND a 787 on that route to sell tickets for.

    Air NZ's strategy of partnering with market leaders has worked very well to Australia, Singapore, Hong Kong and now it seems to Buenos Aires and China.

  7. #4487
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    Quote Originally Posted by Jaa View Post
    You also can not get a one way economy seat from Singapore to Auckland for some days in early February and never for less than $NZ1200++ for any day in the next month and a half.

    February is the peak travel period to NZ and Chinese New Year but still... that is impressive since they have a daily A380 AND a 787 on that route to sell tickets for.

    Air NZ's strategy of partnering with market leaders has worked very well to Australia, Singapore, Hong Kong and now it seems to Buenos Aires and China.
    if you have the market cornered(as in direct to Buenos Aires) or its a super busy time of year ,you will always do well,and it certainly appears this is ''the best of the best''for airlines in general with oil and all--I would certainly hope that I didnt have to pay $1200 one way from Southeast Asia at the time I go (its usually less for RT)in winter here,but they will always get big bucks for school holidays or Christmas season---Guess its how well they set themselves up for the future that will tell the story---enjoy the spoils now ,but dont take those projections as the never ending gospel.
    Theres good momentum atm unless the markets really come unstuck (more) so it appears to have been a good Christmas for most around here.
    Winner..I thought i heard some one cheering all the way from my camping spot,when that $3 was broken!

  8. #4488
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    Quote Originally Posted by Hoop View Post
    AIR fallen 6c this morning to 302c...and has stopped falling.......
    AIR testing its 302c new support...that's usually a 2nd chance buy in opportunity for the AIR believers...Nice??


    EDIT:
    I thought it prudent to add an Disc edit

    Disc: dipped another toe into the water @302.5c
    Spooky these long term psychological support and resistance levels eh Hoop

    AIR seems to be a great example

    Fundamentals will help price in the short term term ....but keep watching those charts
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  9. #4489
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    Quote Originally Posted by Roger View Post
    Last year we had strong capacity growth of 6% which to the surprise of some analysts given the soft economic conditions was matched by demand growth of 6%.
    This year our airline is growing at its fastest rate in its 75 year history with capacity growth of 12% and despite this revenue passenger kilometres flown are actually up 12.2% with YTD group wide load factor very strong at 84.2% up 0.6% from 2015. (November 2015 operating stat's)

    Management was so confident of the performance in this half that way back in early October 2015 at the annual meeting they predicted 1H Fy16 profit would exceed $400m. This seems very early in the half year to make such a bold projection and caught most people I talked to at the ASM by surprise. They must be extremely confident.

    Since the annual meeting we've seen load factors being announced that exceed last year, very strong tourism growth of 9%, well up on last year and very strong outbound tourism growth, Kiwi's are travelling more and taking advantage of cheap fares, e.g. their New Year sale fares look very reasonable to me as noted by Winner above.

    Since their last fuel hedge disclosure of 24 November 2015 where they announced they were only 40% hedged too 2H Fy16 fuel costs we've seen Brent spot come down from $46 barrel to just on $30.
    Based on best known information in the peak summer period AIR will be enjoying very low fuel prices as they embark upon their new routes to Buenos Aires and Houston so the cash register is clearly in overdrive at present.

    What to do with all that cash ?
    Last year cash flow from operations was a remarkable $1.1b, just on $1 per share ! Tony Carter after the ASM mused that perhaps this is the highest operating cash flow of any NZX company ?
    Yes they have a $2.6b fleet upgrade program over the next 4 years but normal depreciation with the expanded fleet size will be approx. $1.8b over this period so by my estimation so that's really only a net outlay in the order of $600m after fleet disposal proceeds from the 767's and Beechcraft 1900's. Further, some of the new acquisitions will be by way of operating lease not purchase.
    But wait there's more ! Some of the cost of the two Dreamliner's that came online in early FY16 was funded by up-front payments in FY15 and they specifically mentioned they'd made more advanced payments on these aircraft (implying more than normal), to gain further discounts from Boeing so the politically correct speak of $2.6b of new fleet isn't really going to drain cash flow at all !
    Begs the question of the size of the special dividend this year. Previous year's, when announced have been 10 cps but I suspect that doesn't cut the mustard any more and we'll see something considerably higher.

    Yes Oil prices are not sustainable over the long run at these level's but the outlook looks benign to me. Almost zero world-wide economic growth so where is the demand going to come from to drive oil back up ? Even if it does revert to $70 or $80 barrel in the medium term the company is well positioned with a modern fuel efficient fleet and might actually gain a competitive advantage with oil at that level.

    So that brings me to my musings of what does the statement in early October of company will exceed $400m for 1H Fy16 really mean.

    $400m looks very, very conservative to me. I'd be surprised if the first number wasn't a 5. Anyway we can talk all we like but some of you might be wondering what I've been doing as actions speak louder than words. I was topping up in the low 290's while in Siberia...the thought of all those future juicy dividends kept me very warm

    I am hoping for an interim dividend of 15 cps up from 6.5 cps and final of 20 cps up from 9.5 cps together with a special of 20cps, (all fully imputed). Stock trades cum the forthcoming interim dividend and I think the SP remains very well supported by the fundamentals of what is a very well managed airline. Further, I believe contrary to the view stated by some, that many Kiwi's are very parochial and chose to fly their national airline. I also believe that AIR as one of N.Z.'s preeminent employers are able to pick and chose the cream of the crop when it comes to employees and the calibre of the staff you meet on board reflects that.
    Couldn't agree more there Roger, I would say the HY earnings would start with a 5 in front. I'm picking 15c interim too.

    By the way, welcome back to the forum.

  10. #4490
    Speedy Az winner69's Avatar
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    Quote Originally Posted by winner69 View Post
    Spooky these long term psychological support and resistance levels eh Hoop

    AIR seems to be a great example

    Fundamentals will help price in the short term term ....but keep watching those charts
    Reasonable day today

    Is it still going to plan Hoops?
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

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