Airlines r a great public service, endorsed by Skol.

[Skol]

My experience recently is that people have not stopped flying, some aircraft are chokka.

[lakedaemonian]

My experience recently is that people have not stopped flying, some aircraft are chokka.

If I wanted to make a million dollars investing in airlines I'd probably need to start with 5 million.

I've been traveling heaps this past year........I've also noticed airlines far more full or likely to be at capacity than at any time in recent memory.

SO I can see better capacity utilization from my anecdotal experience........but I've also seen flights cancelled due to insufficient passengers booked.....

Lots of planes being removed from fleets......older, less efficient aircraft...as well as reduction in models flown to reduce logistics/support costs........

But I still wouldn't invest a penny in any airline......

Too vulnerable to direct/indirect cost volatility in energy and security/biosecurity to name but two.......and incredibly capital intensive.

The final nail in the coffin is that due to airline deregulation and pretty much every major route has multiple carriers, that makes the airlines pricetakers, rather than pricemakers.

[Skol]

If I wanted to make a million dollars investing in airlines I'd probably need to start with 5 million.

I've been traveling heaps this past year........I've also noticed airlines far more full or likely to be at capacity than at any time in recent memory.

SO I can see better capacity utilization from my anecdotal experience........but I've also seen flights cancelled due to insufficient passengers booked.....

Lots of planes being removed from fleets......older, less efficient aircraft...as well as reduction in models flown to reduce logistics/support costs........

But I still wouldn't invest a penny in any airline......

Too vulnerable to direct/indirect cost volatility in energy and security/biosecurity to name but two.......and incredibly capital intensive.

The final nail in the coffin is that due to airline deregulation and pretty much every major route has multiple carriers, that makes the airlines pricetakers, rather than pricemakers.

You must have heard that joke about how to make a small fortune in aviation-start with a big one.

[BRICKS]

SKOL you have to have FAITH in your convictions and still go with your airlines they are getting cheaper every day this is the GLOOM your been waiting for and it has ARRIVED
go out and BUY remember all the stories about how people got rich they bought when no body would BUY, be a leader SKOL and tell us your there to the END.!!

[Dr_Who]

My experience recently is that people have not stopped flying, some aircraft are chokka.

You still have your airline stocks? Which stock are you still holding?

[Skol]

SKOL you have to have FAITH in your convictions and still go with your airlines they are getting cheaper every day this is the GLOOM your been waiting for and it has ARRIVED
go out and BUY remember all the stories about how people got rich they bought when no body would BUY, be a leader SKOL and tell us your there to the END.!!

I'm overseas at the moment enjoying cheap airfares. Are any of you lot contrarians? I told you all to to buy a car when the oil price was $147. I did, it was a good deal.
Anyway BRICKS, what have you been buying lately that's been outperforming the market?

[BRICKS]

WHILE the sky has been falling in for most stocks VIRGIN AIRLINES with a t/o 10 million a
day has held its own and not budge from 35 CENTS

[upside_umop]

Sorry, its a reasonably old article, but i particulary like the bit 'Aviation is a tough business. From 1947 to 2000, the world's airline industry profit averaged less than a 1% return to investors.' Given that in 2001 a lot of airlines went bust, and since then even more have gone under....you would have to say that they are now in a loss position? Airlines are more of a public service and airlines dont gain themselves from the positive externalties associated with flying on their bottom line...


Critics of Air New Zealand need to remember the recent history of aviation in this country more clearly, writes BRUCE TULLOCH.


The Press's editorial of August 24, Air NZ blue, is remarkable in its echoes of similar pronouncements 20 years ago, extolling the wondrous prospects of more airline competition while ignoring the lessons of real experience.

It welcomes the entry of Australia's Pacific Blue to New Zealand's internal routes, stating "competition will be hugely beneficial", declaring this move is more likely to succeed than previous efforts, coming from a competitor with deep pockets not an "underfunded start-up, driven by a starry-eyed dreamer".

Amazingly, this ignores the 13 years when Air New Zealand withstood intense and predatory competition from Ansett, a large and experienced Australian carrier owned 50/50 by Rupert Murdoch's massive News Corporation and Thomas Nationwide Transport, the huge freight conglomerate – tough competitors, the complete antithesis of impoverished and starry-eyed dreamers.

In 1986, Labour was remodelling New Zealand. Ansett was keen to expand into this country. Newmans Air, competing with Mount Cook Airline, was making big losses.

"More competition" being the mantra, the Government decided to open domestic aviation to overseas investors. Richard Prebble said the national interest would be protected by certain safeguards, one being a maximum of 50 per cent foreign ownership.

Newmans Air was reformed as Ansett NZ, Newmans holding 22.5%, Ansett 50% and Brierley Investments 27.5%.

Airlines are a glamour industry and there was much interest. Anticipated benefits were tirelessly proclaimed by Labour and supporters of the Rogernomics bandwagon. There was also considerable misinformation and denigration of Air New Zealand.

That all the significant New Zealand newspapers were owned either by Murdoch's News Corporation or Brierley was, no doubt, coincidental.

The Government, however, had done no research. It soon appeared it was not alone. Reality hit Newmans and Brierley rapidly. By 1988, Ansett was making losses it could not sustain and it bailed out.

Faced with the unpalatable failure of its predictions, Labour abandoned its supposed "safeguards of the national interest" and, to avoid serious embarrassment, let the Australians take over completely.

Freed from any constraints from New Zealand shareholders wanting profits, Ansett stepped up predatory competition, selling fares below cost.

By 2000, after 13 years with Air New Zealand still surviving, the Australians gave up and sold out to a group of New Zealand businessmen.

Ansett admitted to accumulated losses of some $300 million but this is likely to have been a major understatement as the new owners took only a year to lose another $100 million and collapse the airline. Unsecured creditors finally got back 15 cents in the dollar.

Aviation is a tough business. From 1947 to 2000, the world's airline industry profit averaged less than a 1% return to investors.

In this environment, Air New Zealand held out against artificially subsidised internal competition but at a great cost. Staff numbers and wages were slashed, full-time employees replaced by part-timers.

Accounting staff were sacked in Auckland and the work sent to Mexico. More recently, there was a serious proposal to close heavy-engineering facilities in New Zealand and send maintenance to China.

Adding to the woes, in 1988 Labour sold Air New Zealand. A 34.9% share went to foreign airlines. Brierley took the bulk of the rest as controlling shareholder. Brierley, in turn, was taken over by Singapore's Camerlin Investments. Air New Zealand was now effectively foreign owned.

By 2001, it had been so run down that the Government was forced to belatedly remember the national interest and find $550 million to regain ownership. That competent and dedicated New Zealanders kept the airline functioning through these years should be a source of pride.

Now The Press extols Pacific Blue, whose majority shareholder is Toll, the giant Australian company which already runs our railways (and wanted to cancel the Auckland- Wellington passenger services), operates the Cook Strait ferries and dominates road freighting. Is this reassuring?

The Press declares that Air New Zealand must compete – and then complains because it does so successfully. It bemoans fares on secondary routes, simultaneously complaining that provincial charges are too high while Air New Zealand has ruthlessly crushed competition, presumably by keeping fares too low.

Smaller aircraft with shorter hops are inherently more expensive to operate.

This is why Ansett didn't, Qantas doesn't and Pacific Blue won't fly to Westport, Wanganui, Whakatane or Whangarei.

Air New Zealand is a New Zealand company successful in a demanding global market. It has demonstrated efficiency against extreme domestic and international competition. Staff productivity is high, engineering standards draw business from overseas.

Profitable again after the Brierley debacle, its returns are certainly not excessive. A major employer in Christchurch, it makes a great contribution to our nation.

Why then, do we once again see such emotive negative comment, totally bereft of factual analysis or verification?

* Bruce Tulloch retired in 2003 after 44 years in aviation, with NAC and then Air New Zealand.

[tricha]

WHILE the sky has been falling in for most stocks VIRGIN AIRLINES with a t/o 10 million a
day has held its own and not budge from 35 CENTS

Tis a weird world

[Skol]

The airline industry is boom or bust. Big profits or big losses, I've been in it 40 years. It's subject to all kind of weird occurrences whether it's Osama Bin Laden, war, security checks, an accident, it's a business that's always in the papers.

It also attract larger than life people and unfortunately many of them are morons.

Airlines are much bigger than just NZ.

It's much more diverse than someone as naive as UMOP who is allegedly 22, would have you believe. Some airlines make fortunes out of war, technology cargo from China to the US and Europe, famine, the Haj, racehorses, political change and ad hoc charters.

If it's such a lousy business why is there probably 10 times the number of airlines now than 40 years ago?

One of the reasons is that there's lots of people with plenty of guts and the tenacity to stick with a venture that's a heap of fun and if UMOP has half the thrills, enjoyment and buzz I've had out of my life then he should consider himself an extremely lucky man indeed.