European aviation continues major shakeouts https://www.bbc.com/news/business-49791249
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European aviation continues major shakeouts https://www.bbc.com/news/business-49791249
Thomas Cook failed to adapt, simple as that.
http://nzx-prod-s7fsd7f98s.s3-websit...492/308306.pdf
Market not exactly enthralled by this capital intensive announcement. All very well to get a bunch of shiny new fuel efficient birds but one would hope they're vastly more reliable that the last lot.
Return on invested capital has been slipping over the years, under 11% now whereas Qantas with its older fleet is getting over 18% !
Looking at depreciation per annum over the last 5 years its clearly evident that this has been rising a lot quicker in percentage terms that the overall sales lift and is increasingly a drag on net profit.
Depreciation expected to be up another $60-70m this year according to their most recent analysts call. Ouch !
What is the point of buying all these very expensive shiny new fuel efficient birds if they just pass on the fuel savings to the customers with lower fares ?
Interestingly by comparison human resources costs have broadly kept in line with the growth rate in overall sales over the last 5 years so the issue really lies with the capital intensity of the business. The current lower rates of return on invested capital is something that definitely warrants keeping a close eye on.
Given the obvious decline in earnings lately I wonder how they are going to drive more efficiency out of the business going forward. Not much point asking Chris Luxon is there...
Yield is great for sure with this one but those looking for capital gains in the years ahead would be best looking elsewhere in my opinion.
Jetstar pulls the pin on regional services, this was so predictable a couple of years back.PS-Doubling their flights to Q/town will keep prices down and keep us snow sports enthusiasts happy.
https://www.msn.com/en-nz/news/natio...cid=spartandhp
AIR will now be able to charge a sustainable price on its regional routes that reflects the true cost of operations and a decent return on capital employed.
Good day for AIR shareholders. Happy Beagle.
https://www.nzherald.co.nz/business/...ectid=12270809
Annual meeting thoughts.
I'm bored already. No change in outlook but they noted fuel has been trading above $U.S.75 Barrel. (just put the prices on regional routes up already and be done with it)
https://www.nzherald.co.nz/business/...ectid=12270903
The Bulldog is at it again.
What he fails to realise is that its quite obvious the current regional pricing is unsustainable and that AIR are perfectly entitled to earn a decent return on their capital employed in the regions. As someone who rarely uses regional air services why should my main trunk airfares subsidise the regions ?
Will the regional travellers subsidise the one hour cost of commuting for me to get to Auckland airport or the $52 it costs for one days parking at Auckland airport ?
I don't think so. I hope AIR's profit in terms of percentage per annum on invested capital returns to more normal level's commensurate with the risks of running an airline. 15% instead of just over 10% would be nice now that we don't have to subsidise regional airfares due to JetStar trying to buy market share any more.
https://www.stuff.co.nz/business/116...rices#comments
Some interesting comments. Owner of a major Napier boat manufacturing business told me JetStar's planes were extremely old and their flights were so unreliable in practical business terms they were an entirely unsuitable choice. He also mentioned that most of his business contacts in Napier felt the same way.
If you offer **** service this is what happens, customer stop supporting you. My guess is JetStar's regional loading was well under 70%.
Not exactly like Air NZ is highly reliable....
https://www.stuff.co.nz/travel/news/...tual-last-year
Certainly I've experience often lately where may not be necessarily 15 mins late, but closer to 15mins than being on time
Most business people would choose Air NZ anyway, due to Koru lounge, flight times and destination network. JetStar would mainly be the leisure traveler.
A bit late is one thing, cancellation of flights due to engineering issues, pilot or crew issues another.
My understanding is that JetStar's regional operation was resourced on a very skinny basis with very old planes and very little in reserve for contingencies, spare parts or relief crew. You think a 30+ year old plane might be more than little more unreliable than one that's 7-8 years old on average ?
Hey Winner, great news their sustainability report is out and you can read all about their efforts here. A guaranteed riveting holiday read https://p-airnz.com/cms/assets/PDFs/...ity-Report.pdf Nice picture of a Dreamliner with the Remarkables in the background...
Can you please condense all this down to one sentence for me, thanks. Something like, we're going to burn more fuel this year and make more money because JetStar has pulled out would make good reading as the rest of it is probably a bunch of politically correct rubbish anyway. :)
Absolutely good on them for doing what they can......but still a very large polluter and an inherently unsustainable industry. But then again, driven by demand from people and if going to change, then people are going to have to change their behaviours.
I also think the offsetting thing is a heap of feel-good rubbish - doesn't address the real issue.
https://www.msn.com/en-nz/money/fina...cid=spartandhp
That's really cool. Air don't have to put their prices up, keep them exactly the same and they might end up getting a half way reasonable return on capital employed in the regions.
Propstars aircraft were discards from Queer and Nasty Airlines regional services in Aussie which they tried to sell and couldn't.
So even if Propstars operations were unprofitable as long as they cash flowed Queer and Nasty Airlines were ahead. I'm guessing the trigger for pulling the pin was a flip to negative cash flow.
Boop boop de do
Marilyn
https://www.msn.com/en-nz/news/natio...cid=spartandhp
QAN stolen a march on AIR ? AIR need to respond with 50% off everything for everyone over 55 :D
Talking about AIR. sp looking strong lately. Must be the high yld. Power companies looking a bit over the top, maybe some dollars will spill over to AIR for the yield, $3+ here we come:D.
Yield is supportive for sure mate but I also think JetStar pulling out of the regions will now allow AIR to earn a more reasonable return on capital employed.
Hard to quantify what this is worth in terms of all future more realistic regional returns on a DCF basis into today's share price but I think the SP reaction is reasonable and oil has now returned to pre Saudi oil infrastructure attack level's. I think the clear risk of further attacks by the Iranians cannot be ignored and we live with a much higher geopolitical risk environment going forward so I am neutral on AIR at this level and retain just a modest holding.
I am a little surprised that hasn't been an overt response to the Iranian's aggression. I would think the CIA and Saudi intelligence services are cooperating on subversive reprisals as well as the harsher economic sanctions. Hard to say where this geopolitical mess ends up and the effect on oil prices...but yes, I am cautious.
Another "satisfied" customer :eek2: https://www.msn.com/en-nz/news/natio...cid=spartandhp
More satisfied customers
https://www.stuff.co.nz/travel/news/...reeloaders-out
Good Thursday afternoon entertainment
236 comments in the comments section, its seems every man and his freeloading dog has an opinion on that one.
My thoughts, at least they're expanding it whereas JetStar's regional travellers have to endure air hostesses that are even more grumpier than usual.
Cool chart
I still haven’t received my dividend. Who do I need to contact to remedy this?
Contact the share registry in the first instance.
No, not part of the VP10 program.
The Emirates lounge at Auckland airport is a dream, quiet, comfortable and the food is is delicious. There is also a certain "other" credit card that includes international lounge access across the world..so there are alternatives.
I wonder if he will bring the Walmart motto to AIR:
Greg took up his current role in 2014 and led a transformation of the
business based around Walmart's principles of Every Day Low Costs and Every
Day Low Price.
On the face of it, I think it looks like a great hire - albeit new to the industry.
He's earning $11.5M at Walmart, I wonder what Air NZ had to cough up to get him.
Saw a long TV interview with him some time ago about his time at Walmart. Came across as a smart down to earth guy who obviously was held in high regard by his staff. His results at Walmart speak for themselves. Looks like a great hire for AIR even though he obviously lacks industry experience. But that is nothing new in this industry. I wish him well
Good rugby league ma. His son is former kiwi Kieran Foran.
Looks like a good hire. I have felt for quite some time that AIR need to focus on tighter cost control and given his background I think he'll be the man for the job.
Real coup Air New Zealand getting Foran - a real ‘rock star’ CEO
Rock star CEOs generally do better than those with a ‘halo’
Suppose all rather subjective Peter and preference is what you’re entitled too,
Luxon was a good example of the ‘halo effect’ and some would say he was lucky with the timing if his appointment
He left AIR with profits about the same as his first full year of influence and 40% lower than they were three years ago. Suppose that’s what ‘competence, good work ethics and long term vision’ gives you ......(in a cyclical industry maybe?)
Grumpy people on Twitter
Keep it up AIR ...good for shareholders
Piss take @FlyAirNZ charging me $80 for a bag I decide last minute... just because I brought a ticket with no bag and I didn’t do it online you charge me $80 a wrought is what it is 😡 grrr
And
Got another $80 off me for a ticket change I'd only purchased 30 mins before so I urgently try and get home last Thu. It's crazy you can no longer buy a ticket at the airport if there are seats available after check-in is closed from people who didn't show.
And
I once booked a bag online using my phone at the airport. The staff person told me she'd have to charge much more if I did it at the counter. Lucky I had time to do that but the system is gamed against goodwill.
https://www.msn.com/en-nz/lifestyle/...cid=spartandhp
New economy stretch seats coming. 35 inch pitch will be nice but no word on the seat width which will be interesting.
How many various forms of seating are they intending to have, this will make 4 for some aircraft - all at different price points and as you say beagle, no word on width
Mind you flying recently to and from USA, could have done with a bit extra room - though spend the extra money on experiences with the family than pay extra for premium economy/business when cannot afford both
Very true. I booked a flash hotel In Honkers about 6 months ago for the night before our cruise that commenced on October 4.
Checked online a week before we were due to arrive and could get the same room about NZD200 cheaper! I emailed the hotel and they agreed to provide our room at the new rate They also gave us very early check-in at no extra charge after we arrived around 7:30am off our overnight AIR flight. Didn't see any sign of protestors aanywhere.
Came through there last month, and stayed at our usual digs in Mong Kok. Half the usual price, and at 8am, reception was completely empty. No issues while there, odd little disturbance or shouting and bit of graffiti.
Chinese visitors is where they are missing out, both in terms of stayers, but also "ants" coming over the border for shopping. Spoke to some Chinese this week and they said Hong Kong was "extremely dangerous".
Pilot Kirk all excited over AIRs new plane he’s bringing home soon.
@philipkirk6
Our lovely new 787. Looking forward to our flight tomorrow morning. A little biased I know, however I love to see our @FlyAirNZ livery on the flight line at Boeing. Always a pleasure being here to work through the acceptance and delivery process.
Can’t wait to bring it home!
Hope they check the engines properly and check to ensure they have the latest iteration of parts that RR thinks might be up to the task and at least last a bit longer than previous ones :eek2:
Wonder whether AIR will disclose what terms the new CEO is on when starts next year
Just thought about it as another few million shares just issued for AIR force execs to feed upon over the next few years.
New CEO might think he’s better than Alan Joyce - the $24m man
https://www.smh.com.au/business/comp...16-p5319d.html
I really hope they don't pay him any more than Chris Luxon. This company badly needs a dose of reality when it comes to management and staff remuneration.
http://nzx-prod-s7fsd7f98s.s3-websit...016/310242.pdf
Good load factor of nearly 85%, slightly disappointing RASK. Disc: Hold modest position for dividend yield.
Interesting read. One perspective as written by a union official, but if nothing else, that age of aircraft is a major.
Old news, but sometime soon should be making a decision to replace about 1/3 their fleet, but delivery is still some years away. Joyce probably gone by the time they have to write too many cheques.
https://airlinerwatch.com/qantas-pre...ng-and-airbus/
Can't see them going for the 737 MAX lol
Big announcement from AIR today, canceling its LAX-LHR route and introducing Auckland-New York direct. I am not surprised as AIR has not been competitive in prices across the Atlantic for several years. Great news to get a direct flight to NYC https://www.nzherald.co.nz/business/...ectid=12278865
Of the half dozen times I've been direct into LA and out again - last time a couple of weeks ago (twice continued onto London direct and returned the same way) never had a problem with LA airport, no more than any other airport - must have been lucky! Even on domestic US flights have to remove your shoes etc - except if you are under 17 I think it was :confused:
It is a bit quicker, same plane, no long stop overs etc, but do get a break getting off and on again - can be a pain, however obviously not everyone thinks the same.
In saying all that, I would now not fly any of those long flights all in one go unless I really had to - 12-13 hrs max with a stopover for a day or two, won't have any choice if going to London/Europe from this time next year in any event, so either fly to LA then pick up another flight, of fly east with a stop over in Singapore or the like
Would say that you've been lucky Jay! I've lost my bag through LAX when transiting, another time been very very very close to missing that London flight transiting through LAX and last time we went through there in May, took my wife and daughter over 3 hours to clear customs. Many people just try to avoid LAX if they can.
I think habits and demand has likely changed. Many people instead of flying to London want to fly into continental European cities, and also have a range of other stopover cities/experiences. AIR just can't match the network of flights and destinations provided for by Singapore or Emirates etc.
Wonder how much they have sold the LHR 1 landing spot for or if they have leased it out ? Think these prime spots worth something like 20 mio quid.
More significantly this is AKL-LHR after over 30 years can no longer fly to the mother country on AIR metal. There goes 120 crew and 25 sales jobs out of London.
New service flying direct Auckland to New York commences at the same time, (October 2020), 3 times a week. http://www.sharechat.co.nz/article/c...s-at-risk.html
Exactly, AIR are in the business of making money not providing sentimental tethers to the old world. Their focus is to facilitate access to high value customers both to the airline and NZ. American's provide far more value per seat than Kiwis doing their OE. In addition, there is far more value for them in and out of NZ hubs
Wasn't the whole point and justification for flying to Houston about opening up the East coast it the states using Houston as a hub?
That seems to have been forgotten about now... Hope this new flight actually adds value and doesn't just cannibalise existing routes.
I imagine there will be no cargo revenue also.. As these 787's will be payload restricted.
As a passenger there is still nothing quite like the feeling of stepping on board and NZ aircraft at Heathrow to come home ... I will miss that despite maybe trading it for cheaper fares and more routing options perhaps. As an investor, I like my juicy NZ dividends, so if NY is where it is at and the route is more profitable than London then lets go there.
End of an era for sure but no room for sentiment in business. https://www.stuff.co.nz/travel/kiwi-...ghts-to-london
First class cost in 2019 dollars about $57,000 when it started.
I've seen economy class on a decent airline like Emirates for $1,699 return recently. Times have changed !
As I recall, my return flight to London in 1990 was $2400. From memory I flew on the last day of the shoulder season- end of May.
And I paid about $2400 for a flight in August 2000
Seems like the price has been about thew same for yonks
Not even if they paid me $1,000. You make a good point. In today's dollars on a quality airline you can get business class return for about $7-8K so in inflation adjusted terms people paying $57,000 for the same thing in the 1980's $114,000 for a couple return...basically only the rich could afford to travel business or first class back then.
Airline emissions - NZ as a country one of the worst
When you see the likes of Finland and Iceland being worse than us it seems the impacts of tourism are immense.
NZers do a relativity fair bit of domestic air travel as well
But as long as AIR keep churning out big divies this just interesting
https://theicct.org/blog/staff/not-e...f-aviation-CO2
My grandmother paid $2500 for a return flight Europe in 1984. So the price has been the same for ever.
Only thing was in 1984 a litre of milk cost 39 cents, my dad was bringing home about $140pw in pay and so yes air travel has become very very cheap.
Back in the 80's economy passengers were paying more to fly than our first class flight fares today.
Travel was for the wealthy only, or you needed to save a long time to go on flights.
For those complaining about "cattle class" today, well just fork out the extra $ for business class and you are still better off than your peers from 30 years ago.
If I recall that correctly it was sold to Cathay a number of years ago.
From my understanding these rights maybe leased to another airline for a period of time however if they are not used by the owner airline in this case AIR within a certain timeframe they most be sold.
The only thing amazing about the cut re the flight London to LAX has how long it has taken... Hotels at last when the cycle is heading the wrong way..
https://www.stuff.co.nz/business/116...-in-full-swing
The Sky fire will be a big hit also for Auckland mid-term conference market and as everyone knows Queenstown had a horrible winter trade...tourism is in correction mode...
And this PR ....
https://www.stuff.co.nz/travel/kiwi-...elative-breeze
My worst experience of delays in my entire life all have been at Newark. Not as large yet something go wrong you will sit in the plane waiting to take off for hours...
I have heard stories from someone who is based in New Jersey and uses Newark all the time -flying domestically - delays all the time - I suppose as you say Raz , something goes wrong, then you lose you "spot" and have to wait who knows how long - may be a fact of life with it being one of the busiest airports??
Yep. Probably is.. Also delays in winter due to weather can be huge..
I'd expect a few disrupts with flights diverted and with only 3 flights a week it will be a massive headache trying to accommodate disrupted passengers on other flights.
I'd expect recovery of those pax would be via a domestic flight to Houston or Lax or SFO ...hey that's what they do now!