Originally Posted by
Paper Tiger
But offence taken anyway.
Look out your window - do you actually remember having an orange and black striped lawn ornament before?
No but I hear if you change your diet to be a vegetarian its good for your skin, it grows thicker :)
Buying those new plastic airplanes has really eaten up the free cash flow and will do so to a lesser degree over the next few years.
AIR's growing their capacity of this all new generation carbon fibre aircraft a lot quicker than QAN and customer feedback has been extremely positive
Qantas and Air New Zealand are different airlines in different stages and to necessarily expect there results to be in lockstep would be 'misguided'.
You're missing my point, Analysts on this side of the Tasman are suggesting that AIR's earnings will normalise once the oil price tailwind eases off whereas those in Australia are suggesting QAN is immune to this notwithstanding their older less fuel efficient fleet.
This is, to a degree, true of all educated guesses on any company and your guess hopefully is actually better than theirs.
Though it might not be.Both are guesses, happy to back my own judgement and I am happy with where AIR's management are taking this company with its modern fleet, average age keeps coming down, and they're setting the company to be profitable with $120 Oil if such a thing happens. I wonder how QAN would cope with that ?
The question would be to apply the 10 year average PE to what?
The 10 year average of 'real' earnings?
I'm looking at sustainable earnings going forward. If they can earn 45 cps this year in a soft economy this augers very well for the future. Pick your own PE and EPS but I see real value at the current SP and a fantastic gross dividend rate going forward.
Best Wishes
Paper Tiger