Thanks for the link Regi.
Is he good, isn't he Mr Luxon. Very inspiring to listen to as always...great leader and CEO.
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Thanks for the link Regi.
Is he good, isn't he Mr Luxon. Very inspiring to listen to as always...great leader and CEO.
Comes over somewhat like John Key - both have the ability to relate to people in a very natural way.
Very interesting post...
http://www.nzherald.co.nz/business/n...488059&ref=rss
Yes and this http://www.nzherald.co.nz/business/n...ectid=11480115
Another little known and never before discussed fact is Jetstar charge $5 per one way sector booking to make a booking using your credit card on their website, (how 90% plus people do it), compared to $4 per sector for AIR.
Not a lot of difference granted, but when one already suspects $4 more than generously recovers AIR's credit card fees imposed upon it by the banks, then a 25% higher charge by Jetstar can't be anything other than a deliberate over-charging.
But wait there's more....Jetstar charge more for baggage $12 from memory vs $10 per sector for AIR and if you want a seat where your 6ft + frame doesn't involve intense pain from having your knees rammed in against the seat in front that'll be $22 more per sector flown thank you, AIR are $10. Further, addingeven more insult to injury AIR's domestic seats are typically 31 to 33 inch pitch whereas Jetstar are typically 29 inch pitch which makes it far more likely that a significant percentage of Jetstar's passangers will have to suffer their seat upgrade price rort.
In summary Jetstar fares can appear cheap but you get what you pay for with their old planes and extremely cramped seats and anything extra you order whether through your own selection process of their cunning / under-handed ? pre-selected process, they charge through the nose for.
Their obstinate approach, (Australian cricket under-arm bowling anyone ?), regarding pre-selected add-on's is in stark contrast to AIR voluntarily complying with the Commerce commissions recommendation. Jetstar's approach arrogant ?, you be the judge, jury and when you come to which ariline to fly, the executioner :)
Good post there Roger.
But for market sentiment the sp should've been closer to $2.90 I reckon, with falling oil prices and I'm sure you said somewhere that from beginning of this month they do not have any hedge in place for oil. In which case, the forward earnings have more momentum that what they've been.
Wouldn't we expect to see a juicier SP in the coming weeks leading up to dividend dates aswell as from unhedged oil etc? Not entirely sure how it all works around ex-div.
Sorry sb9, all patently untrue.
The last update on fuel hedging shows they are carrying a 73mill loss on hedges to end of FY15, and a 14m loss on FY16 so far. That was in May, so those hedges will be even further in loss now with oil stable but currency down. In the meantime, further hedges will have been put in place. Granted, some of their requirements will remain unhedged, but with oil relatively stable now, and the currency falling further, it is unlikely to have made a lot of difference.
Like most other company's AIR have a prudent hedging policy, with very little wiggle room for the Treasurer to display any risk taking skills. Unfortunately for him but fortunately for shareholders, directors will always cover their arses, and insist the policies are adhered to.
There are a few US airlines who take massive risks with fuel costs, but they tend to go in and out of Chapter 11 with each cycle:)
In the end it's just timing difference, so they should see some benefit in future years when the oil cycle turns back up, but then everyone benefits, and fares will drop anyway.
They might have lost $73 million on the hedges but this should be more than made up for by reduced fuel costs. Since they were 62% hedged in H2, then the reduced fuel bill would be $108 million, I guess.
Also for the future, the hedging is at a much lower cost. H2 15 Brent collars were at 105/96, for H1 16 they are at 69/56. Close to $40 per barrel lower.
Also, AIR might be losing money on the hedges now but they will inevitably make it back the next time the United States starts another war for oil (or freedom, or whatever). Vote Republican, get war with Iran?
Absolutely correct. My point was they were NOT completely unhedged from a certain date as sb9 was ill-informed about.
It's not strictly a loss either, more of an erosion of the full possible impact
Point taken Xerof...
They are also very well hedged in terms of the $U.S.. How much of this is used for capex on new planes v normal operational costs, who would know. About half their revenue comes from overseas ticket sales so there's a natural hedge right there and of course a lot of their costs are in $Kiwi e.g. 11,000 staff.
Aircraft operational costs, maintenance, lease payments, interest etc. could still take some shine off AIR's profit, despite USD revenue climbing due to the FX rate. I suspect the former will outweigh the latter. The upcoming FY announcement should still be significant though!
AirNZ's latest 787-9 has just been delivered (24 July 2015) in Seattle and presumably has now arrived in Auckland. Nice to now have 4 of these revenue/profit-generators in operation.
Yep, its all looking good.