Yep yesterday afternoon.
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This happened to me when I sold my GTK shares, for reason this was specified be be paid via cheque rather than DC... I assume its to do with getting the shares via IPO. Frustrating though, hope it doesn't take too long for you!
I'll buy using my proceeds to buy more AIR today :)
New Guy
It sounds like Link has no bank info in your account to transfer your Div to....In that case the DIV cheque will be sent via snail mail
To check out and update your Link account:
1...Go to link website https://investorcentre.linkmarketser...gin.aspx/Login
2...Click on Investor Services
3...On right hand side in the Investor Centre section click on Investor & Employee login
4...If you haven't registered do so here to get usename and password.(this info is sent to your nominated email address)
5...Login check your info and drop down from payments and Tax the update payment instructions box and check which bank account it's going to (if any)
Cheers
Hoop
Received my divvy today by snail mail.
Contemplating buying in again..
Mine just turned up! Rather overweight on AIR so I'm thinking GNE before the record date/before people drive down the forecast yield
Dividend reinvested, very happy. Looking forward to their next update
August operating stat's are out and I am happy with them in light of geopolitical turmoil in the world and the underlying potential threat that Ebola has to somewhat, (at least at a subliminal level), dampen down travel demand. I think these are solid numbers.
https://www.nzx.com/companies/AIR/announcements/255777
Div received...not big enough to bother buying more shares but reinvested by paying for airfares to Shanghai :)
Looking forward to comments from the shareholders meeting.
The second dreamliner not too far away
http://australianaviation.com.au/201...light-testing/
Looks like AIR has successfully found a new home for the last of its thirsty 747-400's whilst other airlines haven't managed their exit's so well.
http://australianaviation.com.au/201...or-new-owners/
I understand this aircraft has 68,000 hours flight time.
Air N.Z. to mark 75th anniversary in 2015 with retrospective exhibition at Te Papa opening 20 December 2014.
http://australianaviation.com.au/201...pa-exhibition/
Anyone attend the meeting? (and have any observations to share?)
http://www.nzherald.co.nz/business/n...ectid=11334198
share price down because of this?
Every now and then you find a company which manages to do well in a difficult industry.
Air has had very difficult times in its history, it seems to me they have learned their lesson and are on the way to surprise their share holders pleasantly. Have a read if you haven't yet of the recently released annual shareholder review. A very positive review and there is every change that under Christopher Luxon leadership we will see results in the right direction in my view.
http://www.airnewzealand.co.nz/asset...der-review.pdf
Its was a real pleasure to travel down to Chch with Forest, attend the Air AGM and meet up with our southern friends afterwards at the Brewers arms. A big thank you to Percy for his very kind assistance with transport, thanks mate.
The link Forest has provided contains all the information that's necessary to gain a good understanding of where AIR is at.
Management at the AGM reiterated their confidence that based on current year trading to date and forward bookings that earnings growth would continue in the current financial year.
I think we can look forward to a 2015 earnings guidance around the same time as they provided 2014 guidance last year.
Forest and I had a good chance to discuss the airline's situation after the meeting with Chris Luxon and I think its fair to say that we both came away very comfortable with where Air is at with its growth plans and with Mr Luxon's leadership. He is clearly highly energized and charismatic and his enthusiasm for the airline was obvious. He appears to have excellent leadership skills, (essential when you're in change of motivating a work force of 11,000 people), seemed very intelligent and highly articulate and had a way of connecting with people that put them as ease very quickly. I found him very likeable.
Turning to the new Dreamliner's operational performance, he confirmed it's performing right up to its expected operational expectations and fuel burn was slightly more efficient than expected.
As mentioned previously, this is incredibly important because with 10 coming, (2 already here and another one before Xmas) its profoundly important that this new aircraft type design meets its specifications.
He advised initial passenger feedback had been very positive. When asked if AIR would be considering exercising the further 8 options it had on the 787-9, without giving the game away Chris said I think you'll be seeing a lot more of the Dreamliner...read into that what you will.
With Air's strong financial position, improving product offering and strong cash flow and with AIR trading on very cheap fundamentals with excellent growth prospects and a high fully imputed dividend yield, I think its fair to say shareholders are very well positioned :)
Thanks for the great feedback Rodger!
Thanks for the great feedback Rodger!
You're most welcome guys. Forest bought some more straight after the meeting which speaks for itself, (opps was I allowed to say that mate ?).
Any mention of the cash burn by Virgin(Under arm bowlers division) and what Cullen Airlines was going to do about it at the meeting?
Boop boop de do
Marilyn
Yes, Forest and I discussed the Virgin situation with Chris and as you'll know he is a director on the board. He advised good progress is being made on capturing corporate market share from Qantas and while unable to give any indication on financial guidance in regard to VAH's situation for 2015, he seemed very confident about their medium term outlook.
Thanks for all your comments Roger, much appreciated.
I thought Rob Fife would be a hard act to follow but I have been very impressed by Chris Luxon, he has really got AirNZ humming. Just hope he can do the same with Virgin.
I see airline stocks took a bit of a hit on the NYSE overnight with for example Delta down 3.5%. I've been trying to avoid the E word but I guess we should get it out in the open and have some discussion about it.
The experts are saying the single case of Ebola that's presently arrived into America via a passenger travelling from Africa is isolated and any close association he had with individuals between when he first become infectious and being admitted, is a situation that's under control because those people are under close watch. But questions remain to some extent. If America is so primed and on alert for Ebola as they claim, how come the patient was initially turned away from the hospital given that they should have asked if he'd recently travelled to Africa ?
I think Ebola is the only cloud on the horizon for AIR and its already factored into the present price which is very cheap on a fundamental basis. How much of a potential risk this poses to airlines in general and AIR which doesn't fly into Africa is incredibly difficult to ascertain with even a remote degree of reliability. I didn't bring up the E word with C.L. other day...as I don't think he or anyone else really knows how this thing will play out.
I know there's major initiatives around extra funding for a number of pharma companies so a vaccine can be fast tracked. Ebola doesn't appear to have affected AIR's forward bookings at this stage as they stated their confidence based on trading to date and forward bookings but I think Air is great value because of the unknown future effect the Ebola crisis could have in the long term on people's propensity to be risk averse and avoid unnecessary air travel.
Hopefully what looks like a very distant storm cloud will dissipate as world health organisations take serious measure to contain this disease. Anyway, someone had to table this as a relevant subject matter so I thought seeing as I'd outlined all the positives I had some sort of obligation to also outline my one concern. I don't lose sleep over it but I think like most people I'm watching developments in this area closely and I am sure AIR's management are too.
Our Chief Doctor said on the radio this morning 'Nobody has caught Ebola from sitting next to somebody on a plane'
And he said it not very infectious anyway
And you be right Roger - special isolation unit in Auckland and he has ordered a couple of Isopods in case he has to transport any suspected cases
What's your take on the effect of the current exchange rate reduction on underlying earnings? There's been a lot of talk recently by the RB, the PM and other similarly suited qualified acronyms about a "goldilocks" level of USD$0.65. That's a fair fall from current levels and below (if memory serves me correctly) the financial models many on here have been using to derive a fair value SP.
Thanks for asking that. Forest and I had a good chat with CL after the meeting about that and it was also covered in the meeting during question time. Firstly bang on half their sales are from New Zealanders and half overseas so there's a natural hedge there and its a bigger hedge than it first appears as a lot of their costs are in $N.Z. AIR also has a forex hedging policy and they're well hedged this year at circa 83 cents. Chris explained that they don't generally try and make calls beyond a year on where the currency is going, (I guess without actually saying it he's alluding to the fact that they're in the airline game not the forex game), but rather, they try and buy themselves time to be adapt to a changing environment and back themselves to be quicker on their feet than some of their competitors to changing medium term trends. He implied to Forest and I that they don't want to have to be in a position where they have to explain to shareholders why they took a big position on currency one way or the other that turned to custard.
Its perhaps worth noting that staff and fuel costs make up roughly 25% of gross sales each, (total 50%) and obviously only fuel costs are currency sensitive. Not only do they hedge currency but of course you'll be aware they have an active fuel hedging program. A lot of their costs other than the (circa $1.2b IIRC) of wages are in $N.Z and given half their sales emanate from offshore and taking into account their hedging policy regarding fuel and currency I'm comfortable. That said its nice they go the first two Dreamliner's online when the currency was high. Chris also said in relation to the currency, they're currently experiencing lower fuel costs which is balancing the currency out and thought the two would offset and be earnings neutral for 2015.
He also mentioned in the meeting they have considerable financial flexibility being one of only four international airlines with an investment grade rating as to finance options regarding finance v operating lease v ownership of aircraft and went on to say they had a bias towards ownership of the new dreamliners. I guess it goes without saying there is some risk around the dollar in relation to future capex.
John Key may get his wish but beef is incredibly strong and will provide some buffer against the weak dairy sector.
Hopefully Modandm will add his thoughts to this matter in due course.
The announcement of China Eastern starting seasonal flights from their hub of Shanghai to Auckland is not good news. The potential China market is large enough for multiple players but I am not sure how Air NZ will go long term without a strategic alliance like which they have with Cathay Pacific & Singapore Airlines.
Also, Qantas is refocussing on the US market which is the one international sector it dominates. http://blogs.crikey.com.au/planetalk...ing-us-routes/
Air NZ has a monopoly on NZ -> US flights and significant PAX that fly Australia -> Auckland -> LAX/SFO/VYR. This works really well for people flying from Adelaide, Brisbane and Perth who get a short layover to rest their legs in Auckland and a shorter flight segment to the US. It also works very well for anyone with San Francisco or Vancouver as their departure or destination as Qantas and Virgin Australia do not fly to either. These PAX also help Air NZ on the trans tasman.
The last 3 times I have flown either SFO or LAX to Auckland the planes have been packed (99% capacity) with maybe a third using Auckland as a layover on the way to or from Australia. If Qantas flies to any new US destinations it will hurt Air NZ.
Thus while the US is a goldmine for Air NZ, which is putting more capacity into it (triple daily to LAX!!), can it last?
Big difference in the calibre of the product that's on offer between various airlines makes quite a point of differentiation as Forest and I discovered with Jetstar. CL also told the meeting they recently acquired two brand new 777-300's and said they're an excellent aircraft for the sort of longer flight op's AIR does.
After dinner last night I read the story of Goldilocks and the three bears to my granddaughter, (I do an excellent job of impersonating a gruff large daddy bear with a deep loud voice lol), anyway later on I got to thinking about John Key's so called Goldilocks exchange rate level.
Here's an interesting take on this by Gareth Morgan.
http://www.interest.co.nz/opinion/72...-effective-get
Jaa, profit margins are small in this industry.
Remember Quantas profit margins overall are negative the more they fly the more they loose.
AIR profit margins are positive and getting better. It might take a long time before AIR get serious competition.
C.L. commented that people stepping off their Perth flights were saying they were felling in much better nick when flown on the Dreamliner than previous generation aircraft.
Some are reported in Australian Aviation magazine as saying they'll never fly an old tech airliner again. Imagine how much competitive advantage Air would have with a fleet of 18 Dreamliners all ordered ages ago in a bulk discounted deal when they used to cost a lot less :D Meanwhile over at the handicapped and cash strapped Kangaroo airline they've had to defer deliveries of their dreamliners till 2020 due to lack of capital resources, (read crappy management and the Australian unions have them by the balls and always will).
Who wants to fly long haul in an old tech airliner with harsh cabin altitude and super dry humidity and stale air ? Its not just about ticket price.
It is for about 200 of the pax Roger.
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
C.L. defended regional prices in the shareholders meeting. He said they were making less money from their regional network than they were 5 years ago and that the regions were extremely well served in N.Z. with most towns over 20,000 population well served with regional flights whereas in many other countries they aren't.
He went on to say that AIR's regional prices were amongst the cheapest in the world, I believe from memory he claimed they were the cheapest, followed by Australia which on a regional mileage basis were 29% dearer.
He left me in no doubt that he has a wide range of evidence to back up his claims. He continued, fact is many of the world's aniline's wouldn't even bother running 19 seat aircraft to small regional towns, its very hard to make the economics work, (you still have to pay landing fees, airways charges and other charges and can only amortise them over a small 19 seat aircraft that at times might only have a few passengers on it !! e.g. (A friend of mine flew Nelson-Wellington the other day and there were only 2 people on the aircraft, still have to pay Wellington's exorbitant landing charges).
Yes, you can expect AIR to defend their patch against new entrants, why wouldn't they ?
Living in the regions confers many advantages for people, not the least of which is relatively cheap housing and the ability to get anywhere within their local town within a few minutes.
While a young couple living in Auckland may be able to enjoy inexpensive trips to major cities around N.Z. ask them about trying to save up for an average house in Auckland at $700,000 or about the two hours they spend every day commuting to their jobs and back and the roads being congested even on the weekends. Kind of puts the advantage they have in terms of cheaper airfares into perspective doesn't it !!
I think some people living in the regions need to simply accept that there's the odd disadvantage in doing so and one of them being more expensive air fares on a relative basis.
If there was so much money to be made on a consistent basis Jetstar would be flying the smaller towns then wouldn't they !!
As an example IIRC some Wanganui residents were recently bemoaning the withdrawal of air service to Wellington. Air claimed it was simply uneconomic to fly such a short sector and that residents hadn't supported it. You can't have it both ways. They either price short regional services at a level that gives them a reasonable return on the aircraft employed and people use it, or they lose it and have to use their car instead and charter their own flights for emergencies. I am sorry but the fact of the matter is AIR are running a business and shareholders are not here to grant welfare to small regional towns.
I see overnight the American airlines are up strongly, shareholders seem to be realising that with oil at a relatively low point and heading lower Airlines have the opportunity to lock in lower fuel prices than what's been the prevailing norm in recent years.
[QUOTE=forest;509718]Jaa, profit margins are small in this industry.
Remember Quantas profit margins overall are negative the more they fly the more they loose.
AIR profit margins are positive and getting better. It might take a long time before AIR get serious competition.
It can last as long as it is a state backed " Cartel " and it is allowed to have a monolopy over it competition.
It is a disgusting organisation, govt supported that screws the average Kiwi, by killing off any completion by lowering the price on that area, till they kill them off.
It needs to be split like TeleCON
A bit like the inter islander, without the Bluebridge, can you imagine the cost of getting across the ditch?
I take it the railways run it at a loss to remain in unfair completion :confused:
I am sorry but unless you can back your highly emotional claims with evidence that they're outrageous relative to other airlines in other countries providing similar services to small regions then most people will view your statements as nothing more than having a baseless agenda and / or showing a very limited understanding of the operational costs an airline faces. Perhaps go away and do some research and provide some supporting evidence then people might take you seriously. Ever heard of the concept of using your car if you find short regional airfares so morally offensive as it appears you do ?
We used to have Origin Pacific here, unfortunately the govt backed "cartel" Air NZ screwd them over by under cutting the fares.
now Air fares are 3 times the price to go to Dorkland. Remember we the tax payer bailed Air NZ out only to have them screw us over, by unfairly taking out any completion.
Shame on them.
Flight cost causes outrage
TRACY NEAL
Last updated 12:00 23/08/2014
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A Nelson woman wants to see greater competition on air services between here and Dunedin, after forking out $1352 for return airfares for herself and her husband to fly to a funeral.
Helen Blaikie expressed her dismay over regional airfares to Air New Zealand, after the last-minute booking to travel to a funeral last month cost them the small fortune.
"We live in Nelson and feel that regional airfares are a ridiculous price, especially when made at a late stage, such as for a funeral.
"Unfortunately we can never plan these events and book airfares ahead," she said.
The cost for the return fares with just carry-on bags was $1352 plus $40 [optional] insurance for the pair, which Blaikie considered "outrageous".
The pair moved to Nelson from Dunedin nine years ago and were aware of the challenges of getting to and from the southern city. Her husband also travelled the route fairly regularly on business.
Blaikie said that efforts to grow tourism in each area were stifled by the high cost of air travel.
"It's just a mission to get there [from Nelson]. There's one good flight that leaves Nelson at 10am and there's only a 20-minute stopover in Christchurch."
There are about 19 options for flights from Nelson to Dunedin each week, ranging from $295 one way for a seat-only fare [plus carry-on bag] to $446 one way for a flexifare.
There is no direct service from Nelson to Dunedin, and flights connect through Christchurch or Wellington. The longest trip, including the stopover, is 6 hours and 30 minutes and the shortest is 2 hours and 25 minutes.
The transit through Wellington or Christchurch was also at the mercy of weather, said Blaikie, who wondered why there could not be at least one direct service a week.
Air New Zealand expressed its sympathies to Blaikie for the circumstances around the need to travel to Dunedin for a funeral, and explained it offered compassionate fares to immediate family members.
Unfortunately, those fares were not available to extended family or close friends, which was a decision made around what the airline could afford to subsidise, and the documentation that could be provided to prove the relationship.
Air New Zealand also said it was the only airline willing to offer the Nelson-Dunedin service, and needed to charge prices accordingly to "make sure it could maintain Nelson as one of its destinations".
Blaikie said she understood the commercial realities facing airlines, but disagreed with Air New Zealand's response it was the only airline willing to offer the air service, considering its past tactics when other airlines have started competing with it.
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"Other airlines over the years have attempted to work from here and have eventually been squeezed out when you conveniently reduced your fares or changed destinations to suit," Blaikie wrote in an email to Air New Zealand.
Air New Zealand said it tried to keep fares "as low as it could".
Factors such as the size of the aircraft and the costs around operating a few flights a day influenced prices.
Flying between two larger airports was going to be more cost-effective for it, and therefore it could keep fares lower.
Air New Zealand said it released fares about 350 days before departure, and offered a range of discounted airfares.
As the plane started to fill up, the fare increased.
Air New Zealand declined to comment on whether the Nelson-Dunedin service was profitable, or worthwhile, or what the average weekly passenger loadings were.
Communications spokeswoman Emma Field said that information was commercially sensitive.
* Comments on this story are now closed.
- The Nelson Mail
| Saved Stories
Well there are a range of alternatives. First of all it is quite obviously more than reasonable to do the drive in about a day and a half. (within a single 24 hour period if you're keen and sharing the driving) or drive to Picton and catch the ferry and then they'd get a main trunk airfare from Wellington to Dunedin. Simply put, you can't make the implied claim they're being extorted as there are alternatives.
The same couple are probably enjoying a short 5 minute drive, (almost free it costs so little petrol) to wherever they need to go in Nelson 365 days a year, while the aforementioned young couple in Auckland might be paying $75 each per week in commuting / parking costs just to get to work and back as well as 10 hours a week doing it. (That's $3,900 each or a total of $7,800 every year in total).
The Govt have done well out of their bail-out of AIR many years ago. For example they just got a $91.45m dividend from AIR, much needed money with the dairy sector now so weak and much of this goes back into the regions in benefits and superannuation. Airlines should never be asked to be a benefit system to benefit one set of customers over another.
Its called human nature. Everyone is keen to bleat like a lamb lost from its mother when they feel they're hard done by. Intelligent / rational people take steps to mitigate high costs whenever they can and realise bleating is a fruitless exercise.
If the couple were so offended by the price they should have spent many hours in their car to alleviate the problem. Remember lots of people in Auckland are spending circa 10 hours every single week in their cars commuting. Is it such a hardship for that couple to spend a bit of time in their car once in a blue moon when they have to travel at reasonably short notice. You generally get at least a couple of days notice of a funeral.
Regarding the price to get to "Dorkland" as you so irrationally put it, AIR have frequent specials on grabaseat at $65 each way to Auckland, what's so unreasonable about that ?
Most intelligent people would be more than happy to celebrate the many positive attributes of living in sunny Nelson rather than wasting time bemoaning the odd disadvantage like expensive flights when once in a blue moon they have to travel at short notice and are too lazy to take steps to mitigate the cost.
I think the only way to get a cheap flight wherever you are in the world(that I know of)is to drive to the nearest big connection point.
We all want low prices,but the business has to work as well.
There are some practices out there (walmart comes to mind)that are almost criminal in their practices in eliminating competition,but I dont think this case is one of them.
If the small routes are not economically viable in terms of numbers,then competition will simply cause one competitor to fall by the wayside.
I was surprised to hear that AIR allow for a discount for family members for a funeral--Thats long gone for most airlines.
We pay higher prices for alot of things in this country due to our small population-but for most its worth it to live here.
I think Roger has some valid points.
Having said all that,its still good to keep an eye on things in general-Us Kiwis dont seem to be very active in that sense-I only wish we had more say in some of the costs levied by the councils and Government in some other areas.
If we take an extreme example and using your rough guide if we get John Key's magical Goldilocks level of 65 cents, down about 24 cents from the peak of about 89, what you appear to be suggesting is that EPS would be slashed by circa 24 cents and profit would be about 6 cps or only circa $67m after tax.
With all due respect this seems very simplistic as quite obviously the Airline would adapt its business model to suit the changing circumstances as frankly, CL said they would. Airfares would go up for a start.
To illustrate my point that the airline can indeed be highly profitable at this Goldilocks level lets look at the 2007 year when the exchange rate was at that level.
Net profit after tax was $214m
https://www.anzsecurities.co.nz/Dire...spx?id=1691390
According to the IRD's website conversion of overseas currency to $N.Z the exchange rate on average was about the so called dreaded level we're talking about. See link. http://www.ird.govt.nz/resources/d/5...ir270-2007.pdf
Its all just supply and demand. Roger makes a common sense argument about the costs/benefits of Auckland versus the regions. We moved from Auckland to New Plymouth 5 years ago and don't regret it for a second. I grew up in NP and flights these days are so much cheaper than 20 years ago - easy to get Auckland return for $200-250, or just a 4 hour drive to connect to international flights.
The simple truth is places like Wanganui / Gisborne are slowly fading economically, just like the Sunday programme said recently and the economics of supporting those towns doesn't add up. I own AIR because its a well run company - probably the best run airline in the world. From NP to Auckland there are now 8 flights a day at cheaper prices than 5,10, or 20 years ago. There used to be 4 flights a day. It's just economic winners and losers - thats the simple truth.
Good post. iI's about making choices and if you want to save money putting in some effort. We had only two days notice of my wife's father passing early last year and had to travel Auckland to New Plymouth. Flights at short notice were about $320 return ($640 for my wife and I plus rental car costs and parking, all up we were looking at about $800 in costs for the day) for the first flight of the day on a Tuesday and back on the last flight of that day. We had no idea that concessions were available for close family members, something that all of us are now aware of thanks to the recent post on here. We found it a bit objectionable so we took the car instead and stayed overnight. Just before Xmas my wife flew down to visit her mother on a grabaseat special at $49 each way.
supply and demand :confused: bullish.t, it's a Rort, monopoly, actively propped up and supported by the Govt.
when they burn out Jetstar, watch the fairs triple from the major city's .
John Keys going to speak to the airline, I doubt it, election won, now he can go of jet setting and have more high tea with the queen:p
it's a disgusting monolopy:t_down:
'Horrendous' airfares
By Harrison Christian
11:11 AM Friday Aug 29, 201437 comments
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Hawke's Bay airfares have been slammed by the region's candidates - with Napier Labour hopeful Stuart Nash saying Hawke's Bay travellers are being "rorted".
The high cost of Air NZ's regional flights was thrust into the spotlight on Wednesday when the airline announced a 45 per cent increase in annual profit, to $262 million.
The announcement caused Prime Minister John Key to speak to the airline about its expensive regional airfares, saying people in the regions had raised the issue of high fares during his travels on the campaign trail.
The New Zealand Airports Association also called on the Commerce Commission to regulate the airfares.
The domestic routes between the major centers, such as Auckland, Wellington and Christchurch, were often discounted, but there was potential for excessive profits in some domestic routes, where the airline had "a virtual monopoly," the association said.
Mr Nash said regional airfares were "horrendous".
"As somebody who's been travelling to and from Auckland for two and a half years, we get absolutely rorted. I actually think it's a barrier to business in Hastings and Napier. What I see in their [Air NZ's] pricing is monopolistic behaviour," he said.
Tukituki National MP and Commerce Minister Craig Foss said he agreed with John Key's suggestion Air NZ should reduce regional airfares.
"I agree with the Prime Minister that Air NZ needs to continue the work it's doing while making sure it reduces prices to the regions, if it can ... Air NZ has a crucial role in the development of Hawke's Bay, and I would expect them to work positively with our region." Tukituki Labour candidate Anna Lorck said Air NZ's regional airfares were "another example of the Government neglecting our region".
"Air NZ is making profits out of the regions and in doing do stifling regional economic development. The costs are far too high and this must be addressed," Ms Lorck said.
Napier National candidate Wayne Walford agreed "everyone would like to see a reduction" in regional airfares.
Napier Green Party candidate Paul Bailey said he would welcome competition on regional routes, but "in the long term we have to wean ourselves off our love of air travel and use more carbon efficient methods of transportation".
Ikaroa-Rawhiti Labour candidate Meka Whaitiri said regional airfares were "overly priced," particularly to Napier and Gisborne.
"I would support any initiative to bring them into a more reasonable range as a way to encourage more tourism to these areas, creating much needed jobs," Ms Whaitiri said.
Ikaroa-Rawhiti Maori Party candidate Marama Fox said the airfares were inhibiting Ikaroa-Rawhiti residents from accessing major cities for tertiary education and work.
"Further, the tourist market is likewise impacted by the daunting cost of convenient travel to our region," Ms Fox said.
Napier Conservative Party candidate Garth McVicar said the high cost of flying to and from Napier had always frustrated him.
"Competition is the only way to pull the process down. Our regional leaders need to team up and make a submission to Jetstar to entice them to the Bay."
Air NZ rejected claims it was price-gouging passengers on regional routes, and said there was ample domestic competition.
Hawke's Bay Airport chief executive Nick Story said the airport had had discussions with Air NZ regarding its regional airfares.
"Air NZ has a monopoly on regional flights," Mr Story said.
However, the carrier had recently increased seating capacity in and out of Hawke's Bay, which he hoped would have a positive impact on pricing.
Asked if he thought Air NZ's regional airfares should be regulated, he said: "We would prefer that a focus on customers and a desire for a long term and mutually beneficial partnership with the regions, as opposed to regulation, will determine their pricing of regional services."
- HAWKES BAY TODAY
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On many occasions I can purchase an air ticket to Australia cheaper than the flight from Hawke's Bay to Auckland. A trans-tasman journey on Emirates, a three hour flight, will include a full meal, free drinks, a huge selection of in-flight entertainment plus excellent service by a professional cabin crew. Compare this to Air New Zealand's service Hawke's Bay to Auckland: a pottle of water, a free lolly and biscuit plus tea or coffee only served providing the flight isn't too turbulent, which in small aircraft it frequently is.
Air New Zealand should be ashamed of the way they treat customers from the provinces. At the same time they charge us up to $300.00 for a flight to Auckland, they can run a jet from Auckland to Wellington, every day for $35.00 ... go figure.
Robin. - New Zealand - 02:02 PM Friday, 29 Aug 201410LikeReplyReport
I travel to Napier most weekends from Auckland and unless I get a grab a seat which has no flexibility it can cost over double to fly than what it costs for the five hour drive. To get a drink of water, tea or coffee and a piece of fudge and carry on luggage can cost me just on $300 one way Auckland to Napier. Of course it's price gouging - they have no competition. It's cheaper to fly to Australia than it is to some of our regional areas.
Mr Bailey's comments really add no value whatsoever - what alternatives are there? A five hour drive in a car, a bus drive which can take up to 8 hours and leaves Auckland at unreasonable hours for someone that works.
Rant over.
BB - 02:02 PM Friday, 29 Aug 20145LikeReplyReport
Harrison
I hope you take this investigation further.
Air NZ reportedly earn $135m per annum gross through Napier Airport, $70m alone from Auckland. By a rough estimate, the average ticket is $250 each way.
Part time "appeasers" are occasionally offered (think Starfish, or stand-by), but soon withdrawn once we settle down again. Grab-a-seat works if you have flexibility and foresight, but is useless for business.
An business is what the Bay needs. As one of many (and there are many more than you would imagine) who travel every second week, if not more, Air NZ is directly responsible for less business and growth in the Bay.
Having a close association with the tourist and accommodation sectors, the damage caused is huge for the Bay. If we look at Auckland alone, just try comparing the weekend break cost options for say Australia, Queenstown or the Bay in say one month from now. The Bay does not stand a chance due to flight costs alone.
Then there is the jets discussion. Rob Fyfe admitted earlier this year (as you published) that jets are a line call for the Bay. Saving 30min of each flight, at the expense of a few flight time options is a no brainer.
Jet Star want to talk.
Warren - 02:03 PM Friday, 29 Aug 20145LikeReplyReport
Harrison
I hope you take this investigation further.
Air NZ reportedly earn $135m per annum gross through Napier Airport, $70m alone from Auckland. By a rough estimate, the average ticket is $250 each way.
Part time "appeasers" are occasionally offered (think Starfish, or stand-by), but soon withdrawn once we settle down again. Grab-a-seat works if you have flexibility and foresight, but is useless for business.
An business is what the Bay needs. As one of many (and there are many more than you would imagine) who travel every second week, if not more, Air NZ is directly responsible for less business and growth in the Bay.
Having a close association with the tourist and accommodation sectors, the damage caused is huge for the Bay. If we look at Auckland alone, just try comparing the weekend break cost options for say Australia, Queenstown or the Bay in say one month from now. The Bay does not stand a chance due to flight costs alone.
Then there is the jets discussion. Rob Fyfe admitted earlier this year (as you published) that jets are a line call for the Bay. Saving 30min of each flight, at the expense of a few flight time options is a no brainer.
Jet Star want to talk.
Warren - 02:04 PM Friday, 29 Aug 20141LikeReplyReport
Everyones acting so shocked.This has been common knowledge for so long it hurts more than everybody missing the fact that this just happened to be brought up right before an election.Small minds I guess.Now where did I leave my life again.
Evenkeel - 04:06 PM Friday, 29 Aug 2014LikeReplyReport
Tried flying t Keri Keri even with one of link services discounted $400, almost the cost of a return airfare to the Gold Coast. Peole flying overseas prefer flying to driving in a car 5 hours to the major cities. It is time for us to have international flights at least 2 a week. Half of the link planes that carry those passengers will have empty seats. It will encourage tourism to fly direct to Hawkes Bay.
While Air New Zealand had hard times in the late 1900 it is time for the regional cities to be given cheaper fares when you see the profits this company is making now. Personally I find It frustrating to have to pay excessively for a flight an add this to an internaltion airfare it is making it too expensive. Secondly Air NZ have allowed cheap fares if you have a carry on bag but if you need a suitcase the costs go up and up.
0air New Zealand is not on its own all the power companies have increased profit s and at the expense of the consumer. wages are not as high in the regions as the big ciites yet we actually pay more for travel and power.
Robyn - 04:06 PM Friday, 29 Aug 20144LikeReplyReport
Aren't market forces wonderful. Private enterprise provides better services cheaper remember. How's those electricity rate cuts working out?
Steve CA - 04:06 PM Friday, 29 Aug 20148LikeReplyReport
Air NZ have also cut flights between some of the regions. Bring back the flights between Hamilton and Napier please!
Sedge - 04:06 PM Friday, 29 Aug 20143LikeReplyReport
Air NZ have also cut flights between some of the regions. Bring back the flights between Hamilton and Napier please!
Sedge - 04:06 PM Friday, 29 Aug 20142LikeReplyReport
I am flying over from Australia in October and flying from Wellington to Napier. The airfare is much the same price as flying from Brisbane to Wellington. My close family live in Napier so naturally I want to visit occasionally but the price is a rip-off! Also car rentals for 9 days are going to cost the same as the whole trip over - another rip-off! Over here in Brisbane you can rent a car (new model) for around $30 a day. Many Australians I have spoken to have not considered going to Hawkes Bay as it is too expensive to go there. Air New Zealand you need to lower your prices - you are ripping off your customers! Rental hire businesses - you are ripping off your customers too. As far as the Greens Party representative's comment - get into the real world.
Lynn2508 - Brisbane - 06:55 PM Friday, 29 Aug 20143LikeReplyReport
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I'm sure if exuberant profits are being made within short domestic flights at the price AIR NZ charge, then there wouldn't be a monopoly and every other airline would jump in on this opportunity. But there is no queue of airlines waiting to offer domestic flights, simply because it is so expensive. For the sake of our own sanity do a simple calculation on the number of people that use these domestic flights and the costs involved (pilot salaries, fuel, depreciation, airport costs etc etc.). If you don't like the price they offer the service to you at, then don't use it.
I fully understand the interplay variables that would occur, and don't suggest this rule of thumb be applied to larger long term exchange rate shifts.
With respect, I don't consider chatting with a CEO over biscuits at the AGM research, of course Chris is going to portray the company in a positive light, as is his job. My knowledge of the company, having been invested for several years, following developments closely, regular one-on-one discussions with the CFO and IR, detailed financial model, and investment knowledge puts me in a strong position to judge the impact of an FX shift. In fact my original investment case was predicated on the fact that most analysts were under appreciating the positive impact of NZD strength and lower fuel prices on the companies performance. I started getting excited in 2012 (post 717 page 48 of this thread), and more in 2013 on NZD strength - accumulating.
Lets ignore hedging and examine the impact of FX moving from 83c to 78c - in a very simplistic way
P&L
1. Fuel in NZD goes from $1183m to $1259m by my model - call it +80m
2. Maintenance, aircraft operations, lease payments and interest (where USD) rises - rough estimate +40m
offsetting this
3. US revenue is worth more. In FY14 this was $638m. Add 6% = $676m so a gain of rounding up $40m
Net decrease in profits before tax of $80m. Pretty significant you agree?
The other factor is USD capex. The shift won't stress the strong balance sheet, but it does make future special dividends less likely.
Lastly I think you over-estimate the ability of the company to flex pricing short term. You should think of demand as being quite elastic, therefore should AIR increase prices ahead of increases in demand, load factor falls.
I am not trying to alarm anyone into selling, like I said I am holding and I have a 7 figure position. But people should be aware that the recent NZD shift if maintained, puts my forecast of 30c eps out, and I would expect something in the order of 26-28c as being more likely now, with less growth in FY16 than previously expected (but still positive) as favorable hedging rolls off.
-mod
But modandm the depreciation of the $NZ will be against all currencies. Your example includes 100% of fuel costs but only the US revenue. All the other revenue from other destinations has to be considered which improves the situation.
Modandum - Totally respect your long term and sizeable position in the company and depth of research BUT a couple of things. Firstly my credentials. I have 33 years experience as an accountant and many, many years experience advising privately owned aviation operators who were making good money when we were at 39 cents American. I totally understand price elasticity and inelasticity arguments. Its about providing a quality attractive service at a price the customer can bear when the exchange rate goes badly south.
Looking at your contentions. Firstly a 6% drop in the N.Z. dollar against the TWI, ($N.Z. has been falling out of bed against virtually all currencies) = circa $2.3b in overseas sales x 1.06 = $N.Z.138m dollar revenue gain which more than covers your expected increased costs of $120m.
Secondly, besides that, we have oil at 18 month lows which if unhedged would by my calculations extinguish the exchange rate effect. To be honest I'm really not worried about a modest correction in the Kiwi dollar at all.
On the other hand the spread of Ebola and its possible effect long term on people's propensity to curtail unnecessary travel is definitely a long term concern I hold as is my short / medium term concern regarding the dramatic reduction in Fonterra's forecast pay-out and its effect on the N.Z. economy. People need to have confidence about their financial situation before splashing out on that dream five figure overseas trip. You think dairy farmers and all service providers to that industry aren't going to be pulling their horns in a LOT ?
I'm not trying to be argumentative but I was never on board with the AIR is worth $3.00 (now) calculations. My contention has been that if they can fill there planes to the same load level's as last year with the additional capacity expansion of 5% this year and all other factors being equal then we could see close to 30 EPS next year and if and when they proved their ability to grow the top line by 5% they'd be worth close to $3.00 sometime next year.
My current thinking is that with dramatic Dairy reductions and its effect on the N.Z. economy and with the potential for Ebola to be a medium / long term concern AIR faces a considerable challenge to fill their extra capacity over the next few years.
Interestingly according to Reuters the consensus average of 7 analysts has 2015 eps at 23.07 cps for 2015, (highest is 25 cps), and for 2016 consensus of 6 analysts is 25.78cps and the highest is 28.
If they achieve the average analysts forecasts and we use a reasonable PE of 10, (which is the average its been trading on over the last 10 years), that suggests fair value will be circa $2.30 in 2015 and circa $2.60 in 2016. Given the challenges the airline faces I think we should be pleased if those SP markers are achieved in tandem with receiving high fully imputed divvy's.
Considering the not inconsiderable risks and challenges AIR faces, arguments around having no more than a sensible percentage of one's investment in AIR, (i.e. maintaining a well diversified portfolio) appear to me to have considerable merit.
Tricha - Its become clear you have no idea about the operational costs AIR faces on small short regional routes on a per passenger basis. What part of amortising high fixed (per plane) landing and airways charges over 10 pax as compared to a flight load of 300 is so difficult for you to understand ?
I have no concerns at all the AIR aren't well capable of fending off anyone's bleating agenda about regional airfares using international research. Frankly, unlike the other matters referred too above, I don't see your or anyone's else's emotionally charged rants regarding regional airfares as a risk to AIR at all. Jetstar have been quick to implement full regional services haven't they, (sarcasm intended), could it just be because there's bugger all money in it and its bloody hard to get an acceptable return on capital !!
Can I make a suggestion, use your car some more, it won't kill you.
Air NZ :t_down:is a cartel, eliminates any completion by dropping prices and then gorging the average Kiwi.
The average Kiwi bailed them out to the tune of hundreds of millions of tax paid money and in return gets flogged!:t_down:
John Key can go jet setting for free, high tea with he Queen, golf with Obama.
If you do not find Air NZ morally offensive Roger, you do not have a moral fibre.:(
Air NZ reviews sky high fares
Last updated 12:58 28/08/2014
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Prime Minister John Key has taken up the issue of high regional airfares, which a Nelson woman highlighted.
Key says Air New Zealand needs to keep working to reduce regional airfares.
The airline said yesterday it would review the cost of last-minute domestic regional airfares after criticism they were too high.
Nelson woman Helen Blaikie, who expressed her dismay over regional airfares and the airline's attitude in a Nelson Mail article on Saturday, said today she was pleased the issue was being looked at.
Key said in Blenheim yesterday he had directly raised the issue of high regional airfares with the airline's chief executive, Christopher Luxon.
"I've made it clear that I think Air New Zealand needs to continue the work it's doing while making sure that it reduces prices to the regions if it can. Because in the end we always know they're likely to have a more monopoly-type position in those areas. They've got to make sure that they continue to deliver fair pricing to the regions.
"Now, they assure me they are. But they also assure me they're very focused on that area."
The airline announced today annual profits had soared by 45 per cent due to higher passenger numbers and greater capacity.
Key said it was doing a "magnificent job" and was one of the few airlines in the world to make a profit.
However, the high price of airfares to regional areas had been raised with him as he travelled around New Zealand, and he had "directly raised" that with Air NZ.
The airline's pricing schedules were "quite complex", he said.
It was up to Air NZ's leadership to run their company, he said.
"I was simply making the point that they're our national carrier and we expect them to deliver fair prices across New Zealand . . . New Zealand is a small country and in so many areas, we either have a monopoly supplier or a duopoly position."
Blaikie spoke out about regional airfares after she and her husband paid a total of $1352 for last-minute return tickets from Nelson to Dunedin for a funeral. Her concerns were echoed by many others with a flood of reaction with many fed up with high airfares.
Luxon said yesterday last-minute airfares may be reviewed.
"A strong performance like this certainly helps the business be able to keep a downward pressure on airfares," he said.
However, it is not only last-minute airfares that have sparked outrage. A Nelson traveller who this month booked return tickets for two to a February wedding in Gisborne paid $1148, the cheapest seats she could find.
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In the past six years average regional fares had not changed, Luxon said.
Luxon said he believed Air New Zealand had the best regional network in the world.
Normalised earnings before taxation of $332 million for the 2014 financial year were up 30 per cent on the previous year. Statutory earnings before taxation were $357m, an increase of 40 per cent, while statutory net profit after taxation was $262m.
Operating revenue, capacity and yields grew across the network, while unit costs remained stable.
Other online reaction from air travellers include one who faced paying nearly $3000 return for two adults and two children from Napier-Hastings to Christchurch for a grandfather's funeral.
Margaret Bartlett said: "We had to go to a funeral in Te Aroha (from Nelson) in Feb and it was going to cost $1200 for flights to Ak then rental car and accommodation. We ended up driving. Flight prices aren't good unless you can book in advance."
Cameron Woods said: "When my mother died it cost me, my wife and 18-month daughter more to go to Hawke's Bay from Nelson than it did to spend 10 days on the Sunshine Coast a month later. That can't be right."
Celia Zumbach said: "When I went to Auckland from the Gold Coast I wanted to go home to Nelson and joined up with Grab a Seat. Seriously, Auckland to Nelson came up once and the travelling dates were wrong for me. I had 5 weeks before I travelled and checked every day just in case . . . nothing, so I just didn't go to Nelson, I stayed in Auckland for the week."
- The Nelson Mail
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Origin Pacific collapsed more than eight years ago. Some people need to get over it and move on in more ways than one.
http://en.wikipedia.org/wiki/Origin_Pacific_Airways
Airlines are not dispensers of welfare cheques, its called a business, I guess thinking that makes me a capitalist pig with not an ounce of moral fibre LOL.
Wait , what's that I see, they discontinued flights to Dunedin more than 18 months before they collapsed. Couldn't possibly be because the route was uneconomic could it !!
Anyway...moving on from those with a welfare mentality, in real news Thia researchers claim a massive breakthrough in the fight against Ebola...this looks promising.
http://tvnz.co.nz/world-news/thai-re...-fight-6098769
Suggest we just ignore tricha - pure trolling. It does put me off this forum.
Not doubting your accounting skills roger, but I disagree strongly with the conclusions you are reaching on both the NZD, and on the PE multiple (as debated earlier).
I take your point that NZD has weakened vs other ccy's as well but not by as much that your calculation is valid, JPY and AUD have also been weaker - its just a strong USD right now - look up the DXY Index. Also there are offsetting local costs. The big currency sensitivities really are just AUD and USD. Even ignoring the impact on earnings a weaker NZD means higher capex on new a/c. Overall i'm not sure what point your trying to argue, do you think NZD weakness is immaterial?
On the PE, what I say is not some theory, its commonly accepted wisdom. Here is some info:
http://www.investopedia.com/articles/02/102202.asp
http://www.fool.sg/2013/12/18/why-th...cal-company-2/
excerpt:
So why is the P/E ratio not a good gauge for valuing of such companies? This is because when the company is facing a down cycle, there are little or no earnings. This will result in a high P/E ratio. On the other hand, when the company is doing well and having record earnings, the company will then trade at a very low P/E ratio due to the outsized earnings. This is the oxymoron of cyclical investing.
I don't know what your investment horizon is but for me I have been riding for 2 years, and will happily make an exit when I think earnings momentum has slowed too much (i.e eps growth <15%) or worse reversing. If USD strength is the cause of that so be it. There is a medium term cash flow story in the stock, but its more a FY17 story, and a strong NZD was part of that case - will I be around for it... lets see how things play out - I hope so :)
-mod
On newguys risks (in brakets my comment)
1. RB intervention in the forex market - scary stuff (not scary, its market forces not the peashooter RBNZ)
2. Uncertainty about long term capacity at Auckland airport (not a risk, plenty of capacity, and will be built when needed - its a matter of national interest)
3. The new entry of other airlines on lucrative asian routes (asian routes are far from lucrative - bar Shanghai AIR have done whats necessary here to co-operate with competitors - not risk i worry about)
4. potential second recession if Europe and the states can't pull themselves together (YES this is a risk to all companies but Airlines in particular)
5. potential collapse of the dairy industry (unlikely and although a weaker local economy would be bad, there is offsetting strength (property chch etc))
6. weakening commodity prices (good if oil falls!)
7. Ebola (YES, but from my understanding is not that contagious, unlikely to spread to developed economies and therefore probably is being worried about unnecessarily)
8. Oil price uncertainty (uncertainty is a constant - oil price has been moving lower so not a concern)
9. Global decline in airline profitability (this is an outcome of a risk, not a scenario or risk in itself - also AIR is not your average airline so what BA or American makes has only modest relevance)
Complelty agree on the Trica troll matter.
To be honest I haven't looked up the decline in the trade weighted index.
All I'm suggesting is that AIR is capable of adapting its business model to cope with a modest change in the currency.
Outrageous indeed. Checked on AA website on compact car running costs - 63.9 cents / km. Nelson - Gisborne return 1,458 kms. Ferry cost for car and 2 adults $452
Fly to/from Gisborne for your wedding $1,148. Travel time about 6 hours total (depends on actual flights - Wellington connections)
Drive to/from Gisborne $1,383.66. Travel time 23.5 hours (optimum, depends on ferry sailing times). May need an extra night or 2 accommodation.
Intercity Bus to/from Gisborne $248. Travel time 24 hours plus overnight stays in Wellington due to connection times. Cheapest if you can put aside 4 days for travel. Total cost would be about $500 including taxi to a cheap motel.
The Nelson Mail is the same as the Herald; simply regurgitates subjective statements without doing even a simple analysis. If you are not working and have plenty of time then catch a bus. If you want the convenience of your own car then drive. If you want minimum time off work (say $150 per day in lost wages) and the quickest trip then fly. The options are there, don't just whinge!
I think Tricha's main argument appears to be that because the Govt bailed out AIR they now have a moral obligation to use that company as a welfare provider to the regions.
Doesn't appear to understand, (read doesn't want to understand), that airport landing charges are a significant component of a short regional flight and that amortising those over just a few pax is more expensive on a per pax basis that amortising those of a A320 landing at Wellington with 150 pax.
Those greedy Dorklanders who can get cheap $39 flights to Wellington sometimes on special must really get some people's knickers in a twist LOL.
New Guy....remember why I always harp on about the media.....this is one of the reasons why...
Away from the media and back to reality ...Last month the 10th most traded currency (the NZ$) traded $221,900 million...and that was a down month!!!!
Hmmm ..What little amount in the grand scheme of things was it ??..$521 million... and Mr Wheeler + the Media expect me to believe that that piddly amount dropped the NZ$ like a brick... come on...really??? ;)
Lets face it --Its been a combination of things ,but the $US is flying ATM (thats a big one)
Add into that equation the opportunity cost in terms of lost earnings due to spending the extra time traveling and the picture gets even worse. Unfortunately people are not rational when it comes to working out such costs or making decisions. In many people's minds the cost of traveling by car is simply the fuel input costs and nothing more.
IMO, this issue is going to continue being as emotionally driven as the seemingly endless cyclist v driver debate in newspapers. At the end of the day I suspect that those making the most noise on this issue are not regular travellers anyway, who by and large understand the costs of making last minute travel arrangements.
http://www.nzherald.co.nz/nz/news/ar...ectid=11338753 More emotional B.S. about last minute regional airfares but this time containing some interesting independent analysis.
Please Note: Professor of Economics international research shows N.Z. has much cheaper regional airfares than other countries. This backs up Mr Luxon's claims.
Is that an endorsement?
I think the spotlight needs to go on Wellington airports landing charges. I know AIR had had a very frost relationship with this Infratil owned airport over the years over their sky high charges and they're not the only airport to dramatically raise landing charges by any means.
http://www.odt.co.nz/news/dunedin/20...r-landing-fees
http://www.stuff.co.nz/marlborough-e...ding-fees-soar
http://tvnz.co.nz/business-news/airp...s-fyfe-5052470
U r the broken record here Roger, sticking up for a thieving cartel! That destroy viable opposition by lowering fares.
As soon as they are gone fares go up again.
and it is tax payer money that bailed them out that allows them to do it.
Watch thi s space when Jetstar quits and airfares to the major centres triples.
Roger happens to be one of the highest quality posters on this site and it's only his input that encourages me to trawl through the drivel you've been posting in this thread as of late. If you have some evidence to back up your claims or something market related to discuss go ahead but if you're going to insult those with constructive input please go elsewhere or take your airline complaints to the off market thread
Rogers 'analysis' of the stock comes down to
1. Using the analyst consensus earnings estimates
2. Applying a PE of 10
So simple... I would disagree with both of these and hardly call it high quality posting.
Roger hasn't estimated the difference in earnings might be if passenger revenue grows 3,4,5,6,7, or 8%, or how a change in fuel or FX affects next years profit. He certainly hasn't bothered to forecast P&L cost line items. Instead he would say - oh the business model can cope. That's nice. Chorus will probably cope too - never mind shareholder losing half their investment.
Good luck...
I wasn't limiting that statement simply to analysis. He frequently brings articles and insights both about the industry as a whole and company specific things that I had overlooked to my attention through this thread as well as generously sharing his conversations and insights with management with those of us unable to make it to the AGM.
However I shall bite my tongue after this post as I'm becoming as petty and off topic as the resident troll
You're a laugh mate. Many times you've referred to your model and actually offered to send me it and then withdrew that offer for no reason other than it gives you too much of a "competitive advantage". In my eyes you lost all credibility at that point.
No professional analyst has been anywhere near your 30 cents EPS forecast so you'd obviously have us believe that you as some pseudonym on the internet with some alleged seven figure holding and alleged meetings with management and special analytical skills give you insights into the company that named professional analysts that definitely have been meeting with management of a regular basis don't have. Yeah, that's really plausible, (NOT).
A while back you claimed the stock was worth $3.00 NOW. Ha, obviously the market disagrees with you :doh you didn't bother turning up to the ASM, despite claiming to have a seven figure investment didn't bother meeting other ST members at the Chch meeting. Who are you, what's your background ?
Other members on here have met me and know my credentials, who you are is anyone's guess and to be quite honest I take what you say with a grain of salt and also your claimed position in the stock.
I have been factoring forex and fuel changes into my thinking and what do you know, just like CL said, they basically cancel each other out for the 2015 year.
Fact is you have no idea any more than anyone else what the exchange rate will be in 2016 when their forex cover runs out, how they'll fill their projected capacity increases of 5% growth each year, what the oil price will be, how the Ebola crisis will play out and affect people's propensity to avoid unnecessary travel and don't even seem to understand what stage we are at in the economic cycle.
Your wonderful analysis was summed up with the rough projection that each one cent decline in the N.Z. U.S. x rate reduced EPS by 1 cent so a 25 cent drop basically wipes out profit but then I posted their 2007 result making over $200m when the forex rate was mid 60's. You had no answer to that.
The difference between me and you mate, is I take the time to meet people on here and they know my credentials. I accept professional analysts forecasts as a good starting point and work my own assumptions from there, I don't pretend to have some theoretical special model that's God's gift to the investment community.
I'm not trying to forecast this years EPS, management don't know either other than initial signs are looking encouraging compared to 2014. That could easily turn to custard as new non-essential bookings start to get curtailed if Ebola goes rampant.
I reckon you should put in the time and effort to meet people on here so people can get to know your credentials if you want people to take you seriously.
Finally its you my friend that needs good luck with your own portfolio that you've admitted to me is not at all well diversified.
Ever heard of modern portfolio theory and diversification reducing risk. Good luck to you reducing you're so called 7 figure position if the Ebola crisis runs away on itself.
Apologies to other members, sometimes things have to be said. Sorry to pollute the thread with so my angst.
Some people on here who don't make the effort to get to know others and have a specific agenda whether its ramping or bleating like a trained parrot about AIR being a cartel are frustrating to say the least.
Still, what would I know, just 33 years experience as an accountant advising privately owned aviation operators... My 3 cents.
Don't really care whether you take me seriously or not, and I have nothing to prove to you or anyone else.
No professional analysts thought they were going to earn what they did last year, but I had a view they would - not a certainty, it never is, but based on what I thought were fair assumptions. It's not because my model is better than theirs - I think the detail I go to on fuel costs is better than what they do, but otherwise its not. They likely get better access to management than I do. BUT I have made better assumptions, free of the pressures they face. You don't even understand the assumptions or the sensitivities - because you don't do any real analysis. All you do is turn up late to the party, and say relatively unbalanced (positive) things about the stock, without from what I can tell any position of good knowledge of either investment analysis or the company. Then get together with others that hold the stock (and so already have a positive bias), and back slap each other around the AGM over biscuits. The AGM is an event for the retail shareholder, like I say its dumbed down baby speak and PR. There are analyst day's and direct management access for the pros.
You keep repeating how old you are - thats great. With all your experience you should appreciate investing in boom-bust industries, and how to appropriately value a company for 'through the cycle' performance. I found your obstinate response to what I have said about and peak cycle multiples as particularly annoying given its commonly accepted practice. Regarding 2007 performance I thought the comment was too stupid to even solicit a response. 7 years is a long time, the cost base has risen significantly since then. Most obviously labour was $886m, vs $1151m last year. I would like to see the business model try and adjust back to that without some newspaper articles... I stand by what I said about FX, in the short run that is my best estimate, and the capex point is even more important.
Of course I have heard of portfolio theory, but I disagree with its relevance as do many. I share the view of buffet that risk is not knowing what your doing. Why dilute your returns with inferior ideas? He has most of his money in 4 or 5 companies. I'm the same. Trademe is the other NZ stock I own, a recent purchase. For you who don't know what they are doing please diversify.
And I'm well aware of ebola thanks, I read a detailed piece of research from a professional on it today. I'm comfortable that the risk is minimal.
Lets call it even tit-for-tat and end it here, I don't have any appetite for continued argument. I did want to highlight to others that your cheerleading of the stock is based on next to zero analysis of any value, and that point has been made.
-mod
Maybe if AIR is actually 'worth' $3 the market is discounting it back to current price fearing Virgin might dilute AIR's fantastic underlying performance.
Just a thought
Yes lets leave it at that, you irk me and have affected my blood pressure this morning. People can make their own minds up, you a pseudonym who nobody has met and claim to have superior analytical skills to professional analysts or myself, who doesn't hide behind a pseudonym and who has made the effort to get out and meet people on here.
W69 Virgin won't give a forecast for 2015, they simply don't know how the year will play itself out and C.L. who's been to his first two board meetings at Virgin can't give any guidance.
Stock isn't worth $3 at present, simple as that, other than in the figment of someone's imagination.
Roger.
I wish to record the excellent help,analysis,research and advice Roger has given me recently on a fixed interest investment I was out of my depth on.
I appreciate the time and effort he put into helping me.
Thank you very much Roger.
Likewise Roger. Always value you input (even if it is sometimes bullish).
And not wanting to take sides, I value modandm's quality research as well.
Both valuable contributors in my opinion. The stock is one of the more complex to analyse.
Analysts have yet to factor in the recent NZD decline as there have not been any new reports since late August. Perhaps punters have already been factoring it in (given the recent share price weakness).
I've also been underwhelmed by the last 2 monthly reports. Revenue seems pretty flat.
TA told me to sell out at $2.05 the day after AIR went Ex-div.. I didn't!! .... as the large div total 15.5c is not adjusted into the chart and confused things somewhat...However if you notice other stock charts with div payouts most didn't trigger a sell after ex-div ...I gave AIR a chance to regather and strengthen but it didn't it just gave more sell signals...Yesterday with a NZX relief rally it failed to break any of its resistances...My defiance of my TA discipline at 2.05 was knawing at me ..enoughs enough and pushed the big red sell button..
EDIT,,,I added the NZ$ (green line) into the chart
http://i458.photobucket.com/albums/q...IR09102014.png
Would have thought the sell signal was false for the reason you said - and that the prices after going ex-div ought to be increased by 15.5c.
I've been thinking about getting 'gross' share price data (from yahoo) to compare with the NZSE gross index. Lot of work.
BTW - is trading NZX shares using TA working for you? Or are commissions and slippage killing it?
Modandm's research on AIR is better than any other that I have seen anywhere.
Would have thought the sell signal was false for the reason you said - and that the prices after going ex-div ought to be increased by 15.5c. Well....there are a few schools of thought on whether the sell signal is false or not..I guess that is why there are two ways on a chart ..adjust or unadjusted...except the adjusted chart doesn't seem to work atm :(......Anyway one school saying just add the 15.5c back but thats not correct as there's tax involved..usually its the historic price that is adjusted, its lessened to the current price.... However.......the appeal of shares after a huge div windfall can be lost, this shows up on momentum which is a sell signal on its own for some disciplines...............The other school says the shares should not be adjusted because the company NTA/share just took a dive of ~20c/share and this should be reflected in the share price, and it doesn't matter whether it went to the shareholders, the Taxman, in fines or a subsidary of the same value ($200M) going belly up it should all treated the same way..OK..people say AIR will earn that amount back in 9 to 10 months ..that is forward thinking and not 100% certain so there's a bit of added risk applied into the present shareprice to cover this..
TA works off the principle that investors know best and that demand will push the price up at some stage and only then will it trigger TA buy signals again..
I've been thinking about getting 'gross' share price data (from yahoo) to compare with the NZSE gross index. Lot of work. Manually yes..try using Google drive, then use their spreadsheet program, and hyperlink Google finance AIR data into it. Yahoo have seemed to cleaned up its act but I still treat their data as suspect.. Haven't found any problems with Google Finance..
BTW - is trading NZX shares using TA working for you? Yes, far better than what I was (FA long/very long term investor) Investing with TA takes all forms...I'm comfortable being a medium/long term trader which means I use TA indicators with the default settings..(defaulted to Medium term)...TA can still chuck me out after a few days but Phaedrus using meduim/long settings was in FBU for 7 years..my longest using TA was over 3 years in a stock....so there are periods where I mightn't trade for weeks or months.. Or are commissions and slippage killing it? No, commissions are negligible..I'm not telling anyone how much I invested in AIR but an indication is when 1c change in shareprice relates to $100, $200, commission of $30 $60 are certainly not killing the investment.
For a long time I got into a bad habit of just using SMA..(Often it was me being too lazy to change the indicators in the chart program :mellow:)..It was on ST forum I can't remember who it was, Paper Tiger or KW ?? apologies if it was someone else...It was pointed out to me that when using a recently volatile share (PEB I think) then the latest shareprice should have more weight applied to it than its historic start period date therefore I should have used EMA50 not SMA50...It doesn't mean that EMA50 should always be used over that of SMA50..There are times when SMA50 should be used over EMA50 an example being when the current price affected by some sort of abnormal short-term (or unknown term) event or the share is in a trading range.
I’ve AIR as a smudge over fully valued about here (HY15 $1.75), but based on analyst consensus earnings estimates of FY15 $257M and FY16 $290M. On this basis, I wouldn’t be surprised to see AIR go sideways for six to twelve months now.
Modandm, not drilling AIR nearly as deeply as yourself, how well does all your appreciated effort and work correlate with analyst consensus at this time ?
Well $3.00 NOW looks like a great valuation as I type with all the depth on the buy side being drilled out at $1.88.
OTOH I'm at $2.30 in late 2015 IF they can meet average analyst forecasts of underlying earnings of 23 cps for the June 2015 year and Ebola doesn't run away on itself.
Thanks Hoop - i did just the opposite - traded commodities using TA for four years - got nowhere.
Based on that experience I'd've though trading costs of .3% in and out, and slippage / spread of say 2% WOULD be significant, especially for a short to medium term trader.
Interesting.
Four years ago I set up two accounts - trading, mainly AUS shares, using TA, and long term investment, mainly in NZ shares, based on crude FA (but with a glance at TA too).
The long term FA picks actually did much better than the TA picks, even in the short term.
I guess most people are making money now, with the NZX is a long strong uptrend - but see quote below.
In theory TA traders will struggle in a sideways market.
Have been wondering about NZX futures too - so as to be able go short at some point.
All a bit off topic - go AIR!
Stop them killing of competion by price lowering.
They are a govt backed monolopy. With an unfair advantage.
Watch this space, Jetstar will be killed off soon. My prediction, airfares on the main routes will triple in two years.
Will John Keys do anything :confused: probably not, lip service in election year, just gone.
they need to be split like Telecon, to stop the monolopy and price gorging for Roger and his mates!