Roger - I had limited time so no big queues too! Did go to Saturday night to night Anzac show at National Memorial, wonderful!
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Roger - I had limited time so no big queues too! Did go to Saturday night to night Anzac show at National Memorial, wonderful!
https://nzx.com/companies/AIR/announcements/263352
Very strong demand RPK's up a whopping 14%. Really high load factors and yields holding up well in the face of lower oil prices. The cash register must be going into overdrive :D
Nice to see significant new capacity going into the Auckland to Queenstown route for FY16.
A very important and reassuring set of operating stats, after relative weakness in February. The yield pick-up was most important, and if sustained bodes very well. Dilution of yield by the new route to Singapore is not as bad as feared. With capacity growth really picking up, new fleet arriving, the outlook is very positive. 30-32c EPS this year with 40-45c next year my current expectations.
Positive surprises that neither I nor analysts are modelling which I think could come: (besides fuel/fx/demand which are the majors)
- cargo revenue could pick up (I model flat)
- ancillary revenue should pickup from new cc agreement (hopefully by a lot!)
- labour costs, through a training bubble, and with new cabin crew on lower wages than past agreements, could we see costs under control and rising <4% p.a (for once...)
- other cost item beats (maintenance maybe?)
The question for investors is will FY16 be peak, or can we go higher, what fade or can they sustain earnings, and how fast do we get cash back via dividends. After figuring these out, its what multiple are we using, PE 8,9? EV/EBITDA 4? How will the market value the stock?
I have been good at forecasting earnings improvement, but am less confident about my ability to forecast how the market will respond and value the stock given questions above.
At this time I'm staying in with a full position, I still see >25% upside over 1 year, and until I see dark clouds forming I'm going to stay on-board (1A please)...
-mod
Thanks mod, Always value your input.
Average eps expectations are 40c. Given the fact that out of date reports will still make up the average, we could easily see your 40-45c eps in FY16.
The most recent report actually gave an eps=49c for FY16. Well above your range. Unfortunately, I don't have the report of know who did it. So the question is, are you being too conservative?
Yes, it's a great destination for connections and I agree with your sentiments regarding LAX.
Additionally this will help us avoid having to select red-eye connecting flights, and hopefully will mean less chance of encountering west to east flight restrictions during times of heavy east-coast air traffic. I've struck the latter issue a few times and it has resulted in delays of 2-5 hours, resulting in 3am-6am arrival times.
So the bulk of posters on this thread seem to be quite bullish. I'm loving the forecasts of these EPS that are coming from other posters which makes me a happy holder. I was wondering what some other people may see as some risks for the next year or two for AIR?
Did someone dog whistle me?
There are a couple of area of concern Samdaman. Furious scribblers in the economic profession have often observed a company making good profits attracts competitors. Cullen Airlines is making good coin in a couple of areas which could attract competitors
The cosy duopoly profits for flying across the ditch excluding Auckland, between Cullen Airlines and Queer and Nasty Airlines could attract the attention of passing carnivores. There are lot of idle and underemployed A320's in the near abroad, these could be deployed in buccaneering raids on the duopolies profits.
Aoteoroa to North America is a Cullen Airlines monopoly with monopoly pricing. What if Fiji Airlines established Nadi as hub aggregating Kiwis and Underarm Bowlers for onward flights to North America at competitive prices. Fly 737 to Nadi a night in hotel with a pool and then onwards in A330's. Cullen Airlines provides thrombosis class cabin layouts on these routes. If someone flew A380's in opposition passengers would desert in droves.
None of this may come to pass but it is still possible.
Boop boop de do
Marilyn
^^ Or...far more likely they will keep hitting the ball right out of the park. I flew down to Te Papa today and was very impressed with the staff's professionalism and friendliness. Really there is no comparison between Air N.Z. and Jetheap.
Air run a very slick and highly professional operation, planes both ways were chock-a-block full and airports were extremely busy. For those with an interest in AIR's 75 year history the exhibition is well worth a visit. Highlights for my wife and I were the walk in interior of the solent flying boat, jet engine from I believe a 737, watching the the various different advertising programs from over the decades, the future of flight, new seats for the Dreamliner e.t.c.
Watching the various interesting safety briefings over the years was good too, I liked the Bear Grills one but for some strange reason my wife seemed mildly annoyed that I wanted to play the safety in paradise video twice, I wonder why :D
The new Gallopoli scale of our war exhibition really blew us away, this is an absolute must see.
Really I think these guys are having a wonderful golden year and are doing everything right to really make the 75th anniversary of this wonderful airline a special year. All the little things impressed, like the coffee cups on the way down with pictures of the six original air hostesses hired for the first flight in 1940 on them. The lift doors at Te Papa had been painted up outside and inside to look like the doors to an aircraft e.t.c.
Even the Kia Ora inflight magazine has a splendid looking and quite lengthy section celebrating the airlines rich history..;.this airline that took us from be an extremely isolated nation at the bottom of the world and connected us.
I am really proud to be a shareholder in AIR and love flying with them. Investment metrics look extremely compelling at 45-50 cps for 2016 wouldn't surprise me and I wouldn't be surprised to see average broker targets for 2015 of 30 cps easily beaten, perhaps by a considerable margin. Trading on a FY 2016 PE of circa 6 I believe the investment case is truly compelling. I hold heaps, (my biggest position), and I am thinking of adding more !! Many of you will know I've commented on this before but I see Qantas are now trading at quite a substantial premium to AIr N.Z. There is nothing to warrant this IMO, in fact I rate this the other way round. Really AIR should now be $3.30 - $3.40 and looking to gain altitude from there.