AIR - Air NZ.

[couta1]

20 September 2004 (first page of this thread).

22 September 2004

Today.

You've been at this project of yours for a while now mate. Unless this is part of your paid employment maybe, just maybe, with a new year and all could it be time to consider if there is not some other project more worthy of an intelligent Tiger's creative resources and valuable time ? Not looking to start something mate, just a thought for the new year. Happy new year

I was actually going to give him the task of working out how many cans of jellymeat I will be able to buy with my next XOS divvy, perhaps he could knock a few percent off for bulk purchase.

[Xerof]

I guess this is the potential threat?

"The deal was touted to deter American Airlines - from the rival Oneworld alliance and a potential threat to Air New Zealand - from entering the transpacific market."

ps, Hi - new to the site

"was" rather than "is" the threat - AA and Qantas have withdrawn, followed by UA suspending and handing all their forward bookings to AIR.

If what's 'touted' is true, I think they are a bunch of smart cookies

[brend]

Bit less competition for AIR for a while anyway
United Airlines suspends NZ service
http://m.nzherald.co.nz/business/new...ectid=11778240

I had both my flights rebooked on AIR.

UA was in a partnership agreement with AIR.

IF AA cancel services then thats a different story.

[dobby41]

UA was in a partnership agreement with AIR.

IF AA cancel services then thats a different story.

While that's true there are less seats now so that has to be good - right?

[winner69]

Seems 225 a bit of a hurdle to overcome

C'mon seeweed start buying more and give the share price a boost

Beter to average up than average down.

[brend]

While that's true there are less seats now so that has to be good - right?

Less seats yes so loading will be higher. You have to remember this route was once serviced by the 747 fleet. When the last one exited service this reduced capacity when they changed over to a 773

AIR might need move to a 2xdaily service for some days or put the 773 back on to help manage.

the next step with north america would be using the lower density dreamliners and starting a route to ORD (Chicago). ORD is a big Star Alliance hub and served well by UA.

[Beagle]

Less seats yes so loading will be higher. You have to remember this route was once serviced by the 747 fleet. When the last one exited service this reduced capacity when they changed over to a 773

AIR might need move to a 2xdaily service for some days or put the 773 back on to help manage.

the next step with north america would be using the lower density dreamliners and starting a route to ORD (Chicago). ORD is a big Star Alliance hub and served well by UA.

The next 3 Dreamliners coming which will be configured with 275 seats, (more business and premium economy that earlier versions) apparently have more range so Chicago direct maybe possible.

[Beagle]

Less seats yes so loading will be higher. You have to remember this route was once serviced by the 747 fleet. When the last one exited service this reduced capacity when they changed over to a 773

AIR might need move to a 2xdaily service for some days or put the 773 back on to help manage.

the next step with north america would be using the lower density dreamliners and starting a route to ORD (Chicago). ORD is a big Star Alliance hub and served well by UA.

Forgot to mention, AIR as you know have six more remaining options on Dreamliners after the next 3 committed purchases.

Wonder if they're at the same crazy low $150m each ?

[vici]

What's the feeling on AIR short-medium term?

A couple thoughts:
The current management have done a spectacular job in cost cutting + implementing efficiency initiatives (streamlining the fleet, cutting out older less fuel efficient models) + taking advantage of very favourable industry economics (cheap oil prices, general trend up for travel, etc) over the past few years have seen the business do extraordinarily well during that time.
However it always makes me nervous to see management get so much of their remuneration in options diluting shareholder wealth, especially when they seem to cash them in immediately as they receive them. It does not inspire confidence.
I get the impression that a lot of the cost saving initiatives have bottomed out, oil prices are always unpredictable but unlikely to be as low they were 2016 (but who can tell really), and with the revenue growing at a much lower rate than the bottom line, it will be very difficult for the business to get close to it's 2016 performance.
On the flip-side, it basically has a stranglehold on the domestic market with a dominant market share. Although barriers to entry are low, it has been proven over the years that it is very difficult for 3 airlines to profitably operate. The growth play for them is the international flights, which has plenty of competition, but Air NZ has a good reputation and has steady growth in this space. And of course the dividend is very attractive.
Even so, with a current P/E of ~5-6, seems like the market is being overly cautious of AIR.
People don't forget easily do they? Dangers of airline stocks and vulnerability to oil prices and the threat of competition seem to be the main factors keeping this down. Any other perspectives?

[Snow Leopard]

Forgot to mention, AIR as you know have six more remaining options on Dreamliners after the next 3 committed purchases.

Wonder if they're at the same crazy low $150m each ?

Boeing will currently sell a new 787-9 for about US$150M to anyone.

Best Wishes
Paper Tiger