AIR NZ

[Beagle]

A job for you Beagle ...will be extremely well paid

Trust me on this, you do not want to see the Beagle in body paint lol
freddagg - I'm thinking its a crying shame Ford have stopped production in Australia

[Benny1]

I have my serious hat on today. I don't understand from as legal point of view why AIR are not climbing into RR over the obvious impact on the airline with this engine issue.
RR have a market cap of 17 Billions pounds https://www.rolls-royce.com/investors/share-price.aspx so I don't accept a fully litigious approach would have any catastrophic effect on RR.

I'm going to be all over this issue at the next annual meeting and won't take the usual "commercial confidentiality" response without some serious barking. I can't see why AIR don't have a strong actionable case against RR and I think the losses the airline are experiencing because of this issue may be recoverable once this fiasco is sorted.

I am watching the share price decline closely on the basis that at some point I think this becomes a BUY especially if one looks through their current issues and values the company on a DCF basis. I was surprised by Friday's fall but that may not be the end of it. Fortunately I have a fairly modest position at present but I am looking to acquire a good meaningful stake at the right time.

Speaking of engine issues I have my own and it really rocks your confidence. Brand new ZB Commodore Calais V delivered just before Christmas. Engine seized 20 days and 850 km's later. Unlike AIR I don't take these sort of issues lying down but then again there are more than two engine manufacturers so that makes it easier...

As far as I am aware in the past a lot of the compensation offered by the likes of Rolls Royce and other component manufactures comes in the offer of discounts on future purchases.
That is why I would not at all be surprised to see Rolls Royce engines on future aircraft ordered, this artifice sums that up for me:

https://www.nzherald.co.nz/business/...ectid=12176487

When words such as compartmentalise get used that says to me we are still friends with Rolls and look forward to doing business with them again soon.....That's just my take on it!

However we will not know probably for a couple of months what the decision is for the new aircraft...although thinking about it..announcing an order for shiny new jets may take some of the sting out of the half your results due out soon??

[winner69]

That $340m npbt guidance pretty bad

Just imagine what it would have been if the price of fuel had stayed up $100

If so $2 would be cheap.....Chris and his team have fingers crossed that the price of fuel stays low

[Raz]

Raz, can you expound on that argument please. I have a theory too about premium pricing but I would be interested to hear yours.

If you are looking at economy, especially Asia and Europe...the price premium is materially against AIR compared to first tier airlines.. most of the year.

Air's Business class product is also out of date compared to other first tier airlines yet generally costs more. Also no first class means they do miss out on some high yield passengers that are going to others.

Price driven customers - they are not in the running, since the jet fuel price bump last year they were not competitive on price even when specials were launched.

As an aside smart people driven by price can get cheaper Air product on code share specials internationally as well..

Product, already mentioned for business class is also a problem for economy - tight seats on planes plus lower service levels on flights have weakened the overall experience on international flights.

Why its so different to the professional and warm nature of service domestically has been a puzzle for a while. Koru lounges are well documented. Scheduling of flights has been compromised since the network has been placed under pressure since the RR issues started. Delays have become more common.

On balance the experience has deteriorated to the point it is inferior to a number of others and also similar to some lower priced carriers.

I get the feeling given they are the national airline they believe customers will be sticky given the brand. Even Disney discovered this would only hold to a certain point and are noticing attendance decline. However in the airline business sales at the margin can determine profitability.

[Beagle]

That $340m npbt guidance pretty bad

Just imagine what it would have been if the price of fuel had stayed up $100

If so $2 would be cheap.....Chris and his team have fingers crossed that the price of fuel stays low

$340m will make for a sad and even more disappointed Beagle. Hopefully a bit further up the guidance range. I hope AIR stop barking about their good relationship with RR and start showing some teeth and use them ! RR deserve some really serious pain over their shonky engines.

[Scrunch]

$340m will make for a sad and even more disappointed Beagle. Hopefully a bit further up the guidance range. I hope AIR stop barking about their good relationship with RR and start showing some teeth and use them ! RR deserve some really serious pain over their shonky engines.

RR do, but is this strategically the best option for an airline operating in a limited supply market. To avoid a mismash of engines, you ideally want to be with one supplier. If you go all legalistic with this supplier, will you get the best deal in the future. If you go legalistic, will you be at the front or end of the cue if you need additional engines or specialist assistance in the future? If you develop a reputation for being legalistic, will this assist or hinder your negotiating position should you decide in the future to change primary suppliers?

Will going legalistic even get you more compensation for the issues?

On balance its a bit like when your partner does something stupid - you want to get mad but often it isn't the best option.

[Benny1]

A mismash of engines is not a big deal... Sometimes an aircraft will only come with one choice of engine ( think the 777-300er).
Engines a normally sold these days with a total care package so the maintenance specs and overhauls are carried out by the manufacturer...
Only limited engine work is now carried out in-house.
You are right in not pi$$ing off the suppliers as you will be back at the table with them sooner of later wanting a discount on your new engine purchases.. Pi$$ them off and good luck to you...

[Beagle]

https://www.nzherald.co.nz/business/...ectid=12201768

CEO of Virgin is going after 8 years and earning top money while having more than one third of the Australian market the airline has struggled really badly while Qantas has gone from strength to strength.
Luxon was right to get out of Virgin and challenge the board that this guy is a liability in more ways than one. Virgin's load factor on the Tasman since the acrimonious split with AIR late last year is pretty interesting.

[Marilyn Munroe]

https://www.nzherald.co.nz/business/...ectid=12201768

CEO of Virgin is going after 8 years and earning top money while having more than one third of the Australian market the airline has struggled really badly while Qantas has gone from strength to strength.
Luxon was right to get out of Virgin and challenge the board that this guy is a liability in more ways than one. Virgin's load factor on the Tasman since the acrimonious split with AIR late last year is pretty interesting.

If cullen Airlines wanted and could get an agreement on stratergy from Lee Kuan Yew Airlines it could buy back in to Virgin(Under arm bowlers division) at a good discount.

Etihad need the cash and I'm pretty certain the China based holders are ruefully contemplating the balance between the ying and the yang of their buy in.

However Cullen Airlines should be mindfull of the Kiwi dollars previously squandered trying to follow the yellow brick road of investment in Aussie aviation.

Boop boop de do
Marilyn

[Beagle]

If cullen Airlines wanted and could get an agreement on stratergy from Lee Kuan Yew Airlines it could buy back in to Virgin(Under arm bowlers division) at a good discount.

Etihad need the cash and I'm pretty certain the China based holders are ruefully contemplating the balance between the ying and the yang of their buy in.

However Cullen Airlines should be mindfull of the Kiwi dollars previously squandered trying to follow the yellow brick road of investment in Aussie aviation.

Boop boop de do
Marilyn

I listened into their last call and they're not interested in going there again...

[777]

Marilyn regularly puts this up. Have never worked out why.

[Snow Leopard]

So nothing special about Air New Zealand - they can be as bad as any other airline as frequently as any other airline:

Air NZ flight debacle traps passengers on Christchurch tarmac in 5-hour flight 'shambles'

[winner69]

So nothing special about Air New Zealand - they can be as bad as any other airline as frequently as any other airline:

Air NZ flight debacle traps passengers on Christchurch tarmac in 5-hour flight 'shambles'

“I would expect better from such a lauded airline," she said

[Beagle]

So nothing special about Air New Zealand - they can be as bad as any other airline as frequently as any other airline:

Air NZ flight debacle traps passengers on Christchurch tarmac in 5-hour flight 'shambles'

My understanding talking to a broker that fly's into Queenstown on a very regular basis, (everyone knows this airport is surrounded by mountains and flights are subject to satisfactory weather) is that standard procedure as the alternate airport is Dunedin and passengers are transferred by bus to Queenstown. This happens quite often when bad weather prevents landing at Queenstown.
Now I would speculate that due to the time of year, (peak tourist season for bus use) buses may not have been available on the day.

The international gate thing at Chch airport, I don't know why., maybe all the domestic gates were in use ?

Now lets get on to the accommodation side of things.
They put all the passengers up in reasonable accommodation. This would have happened at both ends as pax scheduled to depart on the returning flight couldn't have as it didn't land.

JetStar's approach and this is a very important difference, in these circumstances is to give people a $150 accommodation voucher. It is a well known fact that you simply cannot get accommodation of a reasonable standard in Queenstown in the peak summer period for anything remotely like that so the people scheduled to fly the return leg if that flight had of landed would have been really stuck if they were on JetStar and its also very difficult to find reasonable Auckland accommodation for $150 per night.

Oh just one other thing...passengers stranded on a JetStar A320 would have had to endure 5 hours seated in seats with the world's tightest 29 inch pitch. That would be excruciatingly painful and uncomfortable for this big dog and I would imagine for most passengers.

I am not trying to pretend that AIR get it right every time but most times I think they try harder than Jetheap and most other budget airlines. Remember when mother paper tiger told her cubs you get what you pay for ?...guess what, she is right !

[winner69]

Seems rather odd ....wheels falling off at AIR?

Hundman, an assistant professor at NYU's Shanghai campus, told the Herald the flight took off from Auckland as scheduled close to midnight last night but "midway through our flight, the pilot informs us that Chinese authorities had not given this plane permission to land, so we needed to turn around. A permitting issue, supposedly," he says.

https://www.nzherald.co.nz/business/...ectid=12202409