Auckland International Airport Limited (AIA)

[Filthy]

Seeing bubble looks a while off still suppose need to expect more weakness in AIA share price

which will effect AIR & SKC too

[Habits]

Could be interested in taking a closer look but me old mate Hoop as said NZX starting to correct and when this happens one shouldn't even be tempted in buy in (particularly a downtrending stock)

A bunch of company results due soon... and upwards direction of dow and nasdaq will continue for another few months

[BlackPeter]

A bunch of company results due soon... and upwards direction of dow and nasdaq will continue for another few months

True - however not sure whether a DOW rally can push AIA more up than our quarantine restrictions coupled with another nice lockdown can pull it down :

At some stage even shares like AIA can't defy gravity anymore - a forward PE of 40 coming with up to a decade of negative growth (i.e.. air traffic lower than 2019) or so is not that appealing, isn't it?

[JSwan]

AIA is also a property play for some people

[BlackPeter]

AIA is also a property play for some people

True ... and I guess the engine might still run on 3 vs the normal 6 cylinders, but the question is - can the car win the next race in this condition?

[James108]

Black Peter I really don’t buy this decade of negative growth narrative and am happy to disagree with Foran on this. In fact I think Foran may not believe it either but is just managing expectations.

At the moment the market appears to agree with me but if it started to factor 10 years of negative growth in I would be buying aia. Not a holder of air or aia yet though.

[BlackPeter]

Black Peter I really don’t buy this decade of negative growth narrative and am happy to disagree with Foran on this. In fact I think Foran may not believe it either but is just managing expectations.

At the moment the market appears to agree with me but if it started to factor 10 years of negative growth in I would be buying aia. Not a holder of air or aia yet though.

A wise man once said "Prediction is very difficult, especially about the future". I think he was right.

But apart from that - while we don't know how long this Covid thingee will chase us ... I believe people got already used to travelling less (and particularly business trips will stay down after companies noticed the benefits of zoom calls). Any actions against climate change (fuel prices up, flight shame, taxes and emission trading) won't help in returning air traffic back to the previous glory either ...

While nobody knows, I think it might pay to be cautious when betting on the return of unlimited, unrestricted and ever growing air travel ...

Ah yes, and I agree with you - based on the share price it appears the market seems to assume it will all be over by lunch. Neither the current certainties nor any additional risks seem to be priced into AIA and (still worse) AIR. Gamestop mark 2, just in slow motion?

[Getty]

Agree with all of that, and they will have lost economy of scale.

The fares will be significantly dearer than before, deterring some travellers.

AIRlines will have to take a long term view, re establishing perceptions, affecting profits in the medium term.

[James108]

You are right, that predictions are difficult which is why I am surprised people are latching on to what to me seems a hugely pessimistic point of view. Particularly given the resilience the economy has demonstrated to the lockdowns to date. But hey we wouldn’t be here if we didn’t think we knew better than others...

I agree air and aia are probably a tad overvalued but I am going to assume your comments re: GameStop are tongue in cheek.

[BlackPeter]

... I am going to assume your comments re: GameStop are tongue in cheek.

Well, of course it is not the same. What I meant that both (or all three, if we add AIR) appear to have at times a price which is decoupled from the underlying value :. Clearly the ratios are different - GameStop was blown up by factor 10, AIR might be blown up by factor 3 or 4 and AIA might be blown up by factor 2 (depending on how you value their property and assess their future business, of course).