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Thread: AIR - Air NZ.

  1. #501
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    Quote Originally Posted by percy View Post
    Aussie is a much larger market than NZ.AIR really need a big "feeder" to grow,which VB will provide.Cemeting this arrangement with a shareholding in VB will give AIR more influence.A board seat would be positive.Makes sense to me.
    Roll back the clock - did you really say this 10 years or so ago percy

    Aussie is a much larger market than NZ.AIR really need a big "feeder" to grow,which Ansett will provide.Cemeting this arrangement with a 100% shareholding in Ansett will give AIR more influence. Makes sense to me

  2. #502
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    Quote Originally Posted by minimoke View Post
    Well Jaa, looks like the tea lady was right. Enough cash (or AUD$145m) to go shopping for another airline
    Ha! We all knew they had plenty of cash.

    Like modandm I am a bit surprised by this move as Air NZ had all they wanted. I can only think that someone else hostile to the alliance was prowling around VBA. There have been rumours of such for a while. Air NZ now have an effective blocking stake considering VBA's 49.9% foreign ownership limit. Take your pick of rival airlines or Middle Eastern soverign wealth funds.

    See the excellent Plane Talking blog for more expert analysis:
    http://blogs.crikey.com.au/planetalk...tle-virginity/

    At 44 cents they have hardly overpaid for VBA at least. See Air NZ's share price is down in early trading, it falls 10% you get a VBA holding for free!
    Last edited by Jaa; 21-01-2011 at 09:15 AM. Reason: Added link

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    Quote Originally Posted by CJ View Post
    Labour is going to have a feild day with this. NZ govt borrows $300m a week but one of their 'SOE' has the money to start buying overseas airlines.
    Labour is all for SOE's and government entities investing overseas and entering new markets. This is one of the key planks to their new economic growth strategy and a strategy that they more or less followed in power.

    National will also be happy with the investment as it helps build the case for a sell down in the government's stake.

    It might surpise some to hear that I partially agree, the government only needs to own 50.1% of Air NZ as long as sensible restrictions are applied like restricting any other shareholder to a maximum 10% holding and placing a total foreign ownership cap of say 25%. A sale in about a year when the shareprice may be peaking over $2 would even be pretty good timing.

  4. #504
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    Quote Originally Posted by Jaa View Post
    Ha! We all knew they had plenty of cash.
    But it looks like few were expecting them to go shopping

    At 44 cents they have hardly overpaid for VBA at least. See Air NZ's share price is down in early trading, it falls 10% you get a VBA holding for free!
    So it looks like AIR paid a 10% premium for VBA on the day but still a lot less than the $2.80 highs reached a few years ago. Given VBA seems to be a down trending stock there must be good reasons to have purchased - perhaps they are picking its reached the low and can only go up.

  5. #505
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    Quote Originally Posted by Jaa View Post
    I can only think that someone else hostile to the alliance was prowling around VBA. There have been rumours of such for a while. Air NZ now have an effective blocking stake considering VBA's 49.9% foreign ownership limit. Take your pick of rival airlines or Middle Eastern soverign wealth funds.

    At 44 cents they have hardly overpaid for VBA at least.
    I think you have hit the nail on the head here Jaa - as other commentators in Australia have also commented today - the AIR rationale may likely have been a defensive one. VBA is a highly attractive commercial partner and one that Etihad and Qatar would both have been looking at. AIR getting in early means it is now considerably less likely that one on these players could buy-in an have a hand in VBA's strategic direction - possibly to the detriment of AIR through long haul competition.

    I am a little disappointed I bought more AIR at $1.44 a few days earlier but them's the breaks and I still have every confidence the SP will continue its uptrend towards $1.80 - $2.00 mark by the latter part of the year.

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    Quote Originally Posted by minimoke View Post

    So it looks like AIR paid a 10% premium for VBA on the day but still a lot less than the $2.80 highs reached a few years ago. Given VBA seems to be a down trending stock there must be good reasons to have purchased - perhaps they are picking its reached the low and can only go up.
    Maybe you should give Rob a call and offer some TA insights to him as a consultant.

  7. #507
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    Quote Originally Posted by minimoke View Post
    But it looks like few were expecting them to go shopping
    As modandm pointed out above the market was expecting something. The share price had consolidated above $1.50 in a range between $1.50-$1.53, falling well before the annoucment yesterday.


    So it looks like AIR paid a 10% premium for VBA on the day but still a lot less than the $2.80 highs reached a few years ago. Given VBA seems to be a down trending stock there must be good reasons to have purchased - perhaps they are picking its reached the low and can only go up.
    VBA's recent problems were mostly caused by their diastrous V Australia expansion and to a lesser degree NZ domestic service. VBA were silly enough to use the wrong aircraft type to start up a South African service where 2 engined planes are heavily penalised. This is one area where Air NZ can definitely help them, no airline flies more long-haul routes as a % of their total routes.

    With alliances with Eithad (Middle East & Europe), Air NZ (Tasman), Skywest (Regional) and Delta (Pacific - if they can get it across the line) VBA has good future prospects. They also plan to consolidate down to one brand which will bring cost savings and help brand synergy.

    Domestically VBA are currently destroying both Qantas mainline and Jetstar flying more services than either, an important selling point for business travellers. They have more modern reliable aircraft than Qantas and better service, reliability and comfort than JetStar and Tiger. Domestically they are also more profitable.

    The one brand strategy to cover all classes of travellers is the same as Air NZ's strategy, though Air NZ have executed it much better (Consistent branding, GrabaSeat, innovation galore). Thus there doesn't seem to be any strategic disagreements.
    Last edited by Jaa; 21-01-2011 at 12:51 PM.

  8. #508
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    Quote Originally Posted by winner69 View Post
    Roll back the clock - did you really say this 10 years or so ago percy

    Aussie is a much larger market than NZ.AIR really need a big "feeder" to grow,which Ansett will provide.Cemeting this arrangement with a 100% shareholding in Ansett will give AIR more influence. Makes sense to me
    I would have done,except I would not have said Ansett. Same arguements still relevent today,if not more so.You can not grow AIR without Aussie "feeder'.

  9. #509
    percy
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    Quote Originally Posted by Jaa View Post
    As modandm pointed out above the market was expecting something. The share price had consolidated above $1.50 in a range between $1.50-$1.53, falling well before the annoucment yesterday.




    VBA's recent problems were mostly caused by their diastrous V Australia expansion and to a lesser degree NZ domestic service. VBA were silly enough to use the wrong aircraft type to start up a South African service where 2 engined planes are heavily penalised. This is one area where Air NZ can definitely help them, no airline flies more long-haul routes as a % of their total routes.

    With alliances with Eithad (Middle East & Europe), Air NZ (Tasman), Skywest (Regional) and Delta (Pacific - if they can get it across the line) VBA has good future prospects. They also plan to consolidate down to one brand which will bring cost savings and help brand synergy.

    Domestically VBA are currently destroying both Qantas mainline and Jetstar flying more services than either, an important selling point for business travellers. They have more modern reliable aircraft than Qantas and better service, reliability and comfort than JetStar and Tiger. Domestically they are also more profitable.

    The one brand strategy to cover all classes of travellers is the same as Air NZ's strategy, though Air NZ have executed it much better (Consistent branding, GrabaSeat, innovation galore). Thus there doesn't seem to be any stragic disagreements.
    Jaa.
    I thought you post was excellent.

  10. #510
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    Quote Originally Posted by percy View Post
    Jaa.
    I thought you post was excellent.
    As did I.

    Looking forward as an AIR shareholder - I hope the VBA/ Delta Alliance doesn't make it. If it should fall through this may open the door to AIR VBA transpacific cooperation.

    From VBA's standpoint using most of their 77W's to serve Abu Dhabi and maybe two transpacifc - say SYD-AKL-LAX might be a good virtual longhaul strategy.

    In anycase AIR will want to engulf VBA from the west so to speak (making AKL a VBA hub for eastbound routes to USA and SA- and let Etihad/VBA look after the routes west of australia and southern/eastern europe.

    Other possibilities include a Perth - JHB codeshare
    Last edited by modandm; 21-01-2011 at 01:16 PM.

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