Originally Posted by
modandm
I don't want to go into too much detail but the declining NZD is quite bad for AIR. No things don't cancel themselves out sorry. As a rough guide, 1c change in NZD USD = 1c change in normalised EPS. So from 30c based on 82c we are looking more like 26c now - though hedging will shield us this year. Still growth but...
Re China eastern - bad news, but not hugely significant in the scheme of a network.
Re Qantas, US competition on trans-pac, I don't see anything has changed. Yes Qantas has gone A380 to DFW, so what. Capacity increases are in line with demand. Regarding the Aussie feed to NZ trans-pac services this is not as significant as some would have you think. My impression is since Qantas pulled off AKL-LAX, AIR has been less aggressive in poaching Aussie customers (which are lower yielding anyway). You could call it a case of the two carriers playing nice. No signs of US carriers entering, its all gravy here.
The worry is USD strength for me - a clear negative. Can't see 65c though, 75c maybe. Still like the stock, haven't sold, just less upside...
-mod