AIR - Air NZ.

[boysy]

Plenty of holders here seem content to look the other way to the trifecta of rising oil, rising competitions and rising NZD. it would seem to be that air nz can only trade off their premium nz reputation for so long before punters jump ship to cheaper carriers (as many air holders have admitted to doing) are the yield decreases just beginning as the competition has yet to be reflected in the stats of say the nz usa route with AA and United due to commence later on this year.

[winner69]

True down 1.2% is not alarming but what mikey was pointing out I think is that the previous month Feb 16 it was down 0.7%.
This extra 0.5% reduction, is calculated as a Yield to date of the financial year. To drop halve a % between 7th and the 8th month of the financial year seems material. It either means March 16 had a very low yield for March 15 month very high or as I suspect a combination of those two.

Part (if not most) of the March month decline can be attributed to the mix of domestic, transtasman and international

Domestic (yield ~27 cents) RPKs were only up 0.3% while transtasman (yield ~12 cents) RPKs were up 1.8% and long haul (yield ~11 cents) RPKs were up a whooping 10.3%

While international travel (esp the long haul stuff) becomes a bigger and bigger part of the AIR business Group Yields will continue to drift down.

Remember yield is $ per RPK - longer the flight lower the yield

But those CASKs are looking bloody impressive - far more important metric than yields

[forest]

Part (if not most) of the March month decline can be attributed to the mix of domestic, transtasman and international

Domestic (yield ~27 cents) RPKs were only up 0.3% while transtasman (yield ~12 cents) RPKs were up 1.8% and long haul (yield ~11 cents) RPKs were up a whooping 10.3%

While international travel (esp the long haul stuff) becomes a bigger and bigger part of the AIR business Group Yields will continue to drift down.

Remember yield is $ per RPK - longer the flight lower the yield

But those CASKs are looking bloody impressive - far more important metric than yields

Thanks for the detailed explanation. Forest

[RTFQ]

Plenty of holders here seem content to look the other way to the trifecta of rising oil, rising competitions and rising NZD. it would seem to be that air nz can only trade off their premium nz reputation for so long before punters jump ship to cheaper carriers (as many air holders have admitted to doing) are the yield decreases just beginning as the competition has yet to be reflected in the stats of say the nz usa route with AA and United due to commence later on this year.

I doubt AA or United will be any threat to AIR. United makes more yield with AIR operating its services with code share arrangements than operating the route itself. American wage costs are significantly higher than AIRs. Australian QF's costs likewise.

AA and United re-entering the South Pacific I think is more about National strategy, maybe trying to block Emirates round the world ambitions.

Whenever capacity is increased yield will always suffer short term. Its all about the profit at the end of the day.

Given the amount of management selling lately its hardly likely that known bad news is around the corner, otherwise insider trading accusations will fly.


On the upturn I'll be back in.

[couta1]

The main reason for the price drop IMO is because of the Quantas drop off combined with the sheeple effect. Air is a much better business than Quantas in so many ways, in fact if it wasn't for the low oil prices they would still be deeply in the red, not to mention they pay no dividends and are not likely to. Expecting a good full year divvy from Air plus a special.

[winner69]

I think too much concern about this yield thing

A slide in the H1 profit announcement "Changes in Profitability' showed revenues were up $247m on pcp

They broke this down into $281m from 'Passenger Capacity' (ie flying more passengers further) off set by $49m less 'yield' (prices) and a +$15m 'Others" (cargo and stuff)

To put that yield impact in context - its $49m on $2,300m or just over 2% (lower prices). Hardly your 50% or 60% off discount sales at Briscoes or Kathmandu is it. Air NZ seem to managing 'pricing' very well.

AIR strategy re growth is to grow markets, fly to new places and all that of stuff. They seem to be succeeding with that revenue growth eh - and it isn't coming from buying market share

Those monthly stats - the key number is RPKs - if they are more than healthy things will be more than OK

That chart in the presentation also showed that fuel cost prices saved them $252m (and they did spend $68m more on fuel because they flew further). CASKs can wait for another day

[OldGuy]

A bit of positive news to help restore balance

http://www.nzherald.co.nz/business/n...ectid=11631770

[Baa_Baa]

I think there's a far far too much volume in this sell off to attribute it to the sheeple, the flock cannot muster anywhere near enough shares (or cognisance) to account for the volume sold. This is big smart money aggressively taking profits, for whatever reasons, selling to the knife catchers, who one might argue are the sheeple.

BAA

[OldGuy]

With a 7% net dividend yield, I can sit on this for years at absolutely no direct financial outlay. Happy to wait for $4 to hit in the next 2 years or so, providing a 50% cap gain with no intermediary financial strain...

[Master98]

Given the amount of management selling lately its hardly likely that known bad news is around the corner, otherwise insider trading accusations will fly.

Agreed, if those high profile managers selling shares because of bad news coming ,then definitely in violation of related trading rules.