AIR - Air NZ.

[shawsie]

Back to flat intraday, after -10% yesterday and on a positive morning for the market I would say that is underwhelming.

Turning an H1 profit of $100m against cap of $1.3b into an H2 loss is dramatic.

My target buy will be in some months, once POO has normalised and AIR has attacked its cost base (and, of course, the technical signals are in accord).

[biker]

terrible announcement but read the annoncement closely. A few key takeaways

I really am surprised the earthquakes are having such a significant impact... I guess the operating leverage of airlines is that great.

It 'costs ' ( as Rob Fyfe puts it) $100million a week to run the airline. The margin on 5 billion a year is more than super thin!!

[CJ]

this has to be good for AIR shareprice:

http://www.stuff.co.nz/world/austral...-cockpit-fires

QAN are having a lot of maintenance issues at the moment. Who would you fly with!

[Jaa]

this has to be good for AIR shareprice:

http://www.stuff.co.nz/world/austral...-cockpit-fires

QAN are having a lot of maintenance issues at the moment. Who would you fly with!

I highly doubt it CJ but their maintenance problems are showing up their strategic mistakes. They had some bad luck with the A380s but a lot of the blame rests with management.

• Outsourcing as much crew, pilot and engineering work overseas as possible. De-Australianising the airline is not going to make Aussies want to travel with them.
• 20yr+ old 767s flying domestically (without the foresight to add fuel saving wingtips like Air NZ). Breakdowns, incidents and delays will only increase.
• 20yr+ old 747s still forming the backbone of their international long haul fleet. Breakdowns, incidents and delays will only increase.
• Banking to heavily on the 787 before it had even flown leaving the airline dependent on the above.
• Most new aircraft they have bought have gone to JetStar. Budget passengers couldn't care less but the added fuel efficiency makes JetStar's figures look artificially good.
• The Qantas/Jetstar 2 brand strategy. Air NZ tried this with Freedom Air with some success but it is an inferior higher cost strategy compared to Air NZ's single brand with flexible pricing/seats/service strategy. Premium customers get the service they expect and budget customers can get cheap fares. Air NZ saves on marketing, IT, admin and other head office costs. Everyone benefits from greater frequency.

Air NZ know all this of course which is why they took the stake in VBA. Unfortunately the cost pressures of high Australian wages also applies to VBA.

Just as well Qantas still have their frequent flyer program!

[iceman]

CJ, I think you are right about people becoming hesitant to fly with Qantas after such frequent headlines over a sustained period. I recently booked a Europe trip for our family of 6 and at the outside excluded Qantas from our price comparisons, for this very reason. I'm sure I'm not alone. If Jaa's suggestions that we will only see increase in these breakdowns are correct, then I think that is a very serious situation for Qantas as passenger will leave them in droves.

this has to be good for AIR shareprice:

http://www.stuff.co.nz/world/austral...-cockpit-fires

QAN are having a lot of maintenance issues at the moment. Who would you fly with!

[CJ]

I highly doubt it CJ

I agree any benefit will be lost in the rounding - It was more to kick the oppostion while they are down but you correctly point out a few management issues with QAN. AIR does seem to be a well run company (with the possible exception of 'Rico' - still in two minds about him).

[minimoke]

No offence but I really wish we could keep the FA vs TA argument in another thread and keep this on-topic. If there is something FA or TA that is AIR specific that you would like to share by all means post it here.

I just don't want to have to troll through everyones 'system' and people self validating explanations of their trading approach. This sort of content belongs in the investment strategies section IMHO.

Please don't flame me and lets keep it on topic. Cheers

TA and FA - what about the Tea Lady? Remember my comments back on 20 Jan. Since then the SP has done nothing but go down hill.

Talking to the Tea Lady yesterday and apparently flights in and out of Christchurch since the earthquake have been chocker full. Droves of citizens leaving and tons of assessors and USAR etc arriving. It may not be the earthquake that is the problem but AIR internal staff ability to price the fares. $50 to where ever you like is a generous offer but someone forgot about the shareholders.

[macduffy]

I'm not sure that there are all that many $50 fares from/to Christchurch. I'm told that there's a limited number, you have to go on standby and be prepared to hang around the airport. Most people are still booking and paying in the usual way from what I hear.

For what it's worth, IMO AIR is a very well run business doing better than most in a difficult industry. Not my idea of an investment but possibly worth a trade from time to time.

[modandm]

some buying activity moving into the AIR shareprice over the last week. The shareprice has broken out of it's rangebound trading between 1.09 and 1.12 to make 1.16 today. If any TA's want to provide a short term target or resistance levels on the up that would be good. I imagine $1.30 and $1.44 are key. Depth currently shows 940k on the buy side and 181k on the sell side.

My opinions on the fundamentals is that this company is a screaming bargain and worth at least $1.80 a share. As Jaa and I have outlined AIR is in a strong position with new planes arriving, and demand increasing. I won't go into my entire investment rationale but to say that AKL is strategically the Dubai of the pacific in that it provides an ideal connection for Australians not living in Sydney to fly to North America and soon South America means AIR will increasingly be able to steal pax from Qantas. The VBA alliance helps transtasman and the recent re-alingment towards a value-carrier in shorthaul will continue to stimulate demand and capture market share. Jetstar NZ will get pounded once the a320's arrive.

[ratkin]

some buying activity moving into the AIR shareprice over the last week. The shareprice has broken out of it's rangebound trading between 1.09 and 1.12 to make 1.16 today. If any TA's want to provide a short term target or resistance levels on the up that would be good. I imagine $1.30 and $1.44 are key. Depth currently shows 940k on the buy side and 181k on the sell side.
.

Not much happening , key level looks like 1.17

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