Says ‘inclusive of hedging’
Forecast fuel cost for H2 is $594m based on average of US$75 / barrel fuel (inclusive of hedging)
If it stays over US$80 add at least another $20m to that
That’s how I read that chart ....which I think is cool
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Fair enough I can't cover everything at once mate. During the call they sounded confident around the mid point of the forecast and very confident about cost efficiencies going forward from there as direct and indirect costs around the RR engine issue fall away. I'm very much focused on (what I know we dislike but it is) normalised profitability for FY20 excluding non repeating RR impact. I see a very sound medium term case for investment on the basis of yield at around the current level.
I can now understand their confidence - RR Engine design has recently been moved to Germany! BREXIT directly helping Air NZ and other airlines suffering of poor British Engineering!
From the latest Wall Street Breakfast:
Quote:
Brexit preparations... Boeing (NYSE:BA) is shifting spare parts between its distribution centers in the U.K. and across the globe, according to Ken Shaw, head of supply chain management. Earlier this month, Airbus (OTCPK:EADSY) spent tens of millions of euros on stockpiling parts and securing IT systems. Brexit worries have also led Rolls-Royce (OTCPK:RYCEY) to move the home for its best-known jet engine designs to Germany to avoid regulatory delays or sales disruptions.
Yes it is made in Germany but has a GM engine installed that was probably assembled in a plant in Mexico (which would explain everything). https://en.wikipedia.org/wiki/GM_High_Feature_engine
Isn't this where we mention cyclical and coming down off a peak?
And longevity only via state support so not exactly a boasting point cf HLG.
I guess I'm just feeling conservative these days with stock selection and have a deep seated fear of airlines despite Warrens change of heart.
Those P+L's , whew they turn on the proverbial dime.
And yeh no Jetstar or Holden haha jk dont really care, topicality can be over rated.
Airlines not for everyone I agree but analysts don't see it the way you do and neither do I, (see earnings growth estimates for FY20 and FY21 coming off a cyclical low in FY19 :p base this year) https://www.marketscreener.com/AIR-N...07/financials/
Management extremely confident about their ability to pay the current level of 22 cps annual dividends going forward. 12% gross yield so dividends hounds will probably stop reading right here, that's all they need to know. They proudly noted during the call that AIR had only cut dividends twice in the last 15 years. Once for the GFC and the other for the Chch earthquakes.
Bit much coming from Luxon's Pet Poodle
So profit down and declining share price but pays a good dividend - much like TRA.
So applying the Beagle formula in it's generous PE * 8.5 that would value AIR at
$0.24 * 8.5 =
$2.04.
Luckily I did not use his PE * 7.5 version.
But seriously folks, OK result but I will wait for the $2.04 before buying.