AIR - Air NZ.

[J R Ewing]

so Why did AIR take part in Blocking Whanuapai. Amazing how they can twist the story to suit them selves.

Disc: Shore Boy.

Interesting question. It's certainly not because AIAL gives them the red carpet treatment when it comes to landing charges!

[Jaa]

Interesting question. It's certainly not because AIAL gives them the red carpet treatment when it comes to landing charges!

Auckland is Air NZ's main hub. Most of their international routes depart from it and are fed by their domestic network. Whenuapai would dilute the network effects of their network.

As you say JR this must have been a close run thing. The additional leverage it would give them on AIA to decrease landing fees combined with the increased demand/margin that Whenuapai might generate must have been worth less than the network affects. At the moment Air NZ pay top dolllar while JetStar International, China Southern and Continental are given sweetheart deals. Its classic price discrimination but is counter productive as a strong and growing Air NZ is good for AIA.

See my last post, AIR dont own any of Wellington Airport

I know who owns Wellington airport. I was pointing out that Air NZ are trying to limit the airport's monopoly power by flying from Masterton and now Paraparaumu.

[CJ]

Interesting question. It's certainly not because AIAL gives them the red carpet treatment when it comes to landing charges!

From what I understood, they didn't want it as they would continue to use AIA for the Hub effect per Jaa post.

But other low cost operators could use the low cost airport to significantly undercut AIR prices. This is what happens overseas with small low cost operators flying to a cities 2 or 3rd main airport (sometimes a long bus ride from the city) which lowers their fares (I even thing Easyjet lost the right to say they flew to Barcelona as their airport was so far out of town).

[J R Ewing]

From what I understood, they didn't want it as they would continue to use AIA for the Hub effect per Jaa post.

But other low cost operators could use the low cost airport to significantly undercut AIR prices. This is what happens overseas with small low cost operators flying to a cities 2 or 3rd main airport (sometimes a long bus ride from the city) which lowers their fares (I even thing Easyjet lost the right to say they flew to Barcelona as their airport was so far out of town).

So a somewhat cynical summary of that is to say that AIR will put up with being shafted by a monopoly AIA because that allows it in turn to shaft the NZ public as a monopoly supplier? Perhaps we would all prefer the alternative explanation that they didn't want to have to double up on infrastructure in Auckland

[modandm]

I see minimal benefits at this stage. Branson has always been anti large alliances.

Pooling of spares for 777-300s seems to be the only concrete example so far but many airlines do this quietly anyway.
:

Branson has in the past spoke ill of alliances and even considered creating his own virgin alliance BUT i believe he has come to his senses and realised without alliance membership Virgin is vulnerable and won't attract corporate travellers. Something J.B is well aware of. Here is an article to that effect.

http://www.brisbanetimes.com.au/busi...118-19v9b.html

I expect Virgin (all) to join Star within the next few months.

On another matter - who do you think VBA will tie-up with on flights to Asia? I was thinking Singapore Airlines but what is in it for Singapore who are great already?
Perhaps VBA will negotiate to operate Singapore's lounges or something? I think that Air NZ Branson and J.B have a lot of ideas but Singapore airlines is really holding all the keys so will be interesting.

Could they tie -up with Asciana as a last resort? I don't think Air China would be favoured

[macduffy]

but what is in it for Singapore who are great already?

To prevent VBA tying up with anyone else?

Arguably, that's the reason for AIR taking its shareholding in VBA.

I don't hold AIR, subscribing to the Buffett theory on investing in airlines!

[percy]

.

I don't hold AIR, subscribing to the Buffett theory on investing in airlines!

Buffett as allways is correct. I have held off,held off,and finally brought,just to prove Buffett correct.!!!!

[nick00]

Hey, I always turn to the wisdom of buffet, but isn't the airline industry a little different in NZ.

I read that Buffet does not subscribe to airlines as specialised employment makes them susceptible to union strikes, but didn't AirNZ handle the last strike quite well by training up non union staff to cover union staff etc?

I could be wrong, as I'm quite new to investing etc.

[macduffy]

Welcome to the forum, nick!

Buffett's dislike of airlines as an investment extends well beyond the industrial aspect.

Basically, it's to do with the fact that airlines, as an industry, have made some cumulative net losses of $x billion since the Wright brothers' first flight.

Personally, I don't think that rules them out as a trade, as distinct from a long term investment. It's just that I don't have the temperament or the inclination to try to trade AIR, or any other airline stock.

[percy]

He is however the same as all of us and can change his mind, as his part ownership of an aircraft leasing company proves.
I do not know if he lost money on that investment.!!!!