The power of marketing and self promotion eh troy
Perception isn't always reality, in practice
Printable View
Back in 2010 I had an issue with a significantly delayed NZ7 (SFO-AKL) flight. We boarded the plane at 8pm and sat at the gate for 2 hours at which point an announcement was made that there were some engineering issues and that we would be delayed.
At 11pm they announced that there were issues with the brakes and that the United ground staff were on strike and would not fix the issue, additionally due to the baseball world series being played that weekend there were also no hotel rooms available, and to compound things further the TSA had refused permission for the passengers to re-enter gate lounge.
A decision was therefore made that they would offload fuel and stop in Hawaii. The truck that was sent by United was too small and we had to wait for another truck to be dispatched, by which time it was 12am. At 1 am I watched as the baggage containers were offloaded and after another 30 min's at 1.30am we pushed back which was when the Captain announced that all baggage had also been offloaded and that we did not have permission to land in Hawaii, therefore we would have a 3 hour stop-over in Fiji.
To Air NZ's credit communication was on the whole good and the multitude of issues were handled well. This incident bears some resemblance to that which occurred on NZ80, given that the engineering issue was compounded by a typhoon, a Chinese public holiday, contracted staff (remember, HKG is not an Air NZ hub), and aircrew working up to their maximum hours before the flight even departed. From what I have heard so far from a colleague, communication could have been better, however from what I have been told the situation is being blown out of proportion somewhat.
Most people are understanding, and sometimes cluster-f**** just happen. Just the way it is handled and communicated.
Seems yesterday was beat-up on AIR day. Reality is some issues are beyond their control and they have to use contractors for some aspects of their operation.
Another reality as I found out to my detriment on Saturday night was that when accommodation is fully booked you really are completely snookered if something goes wrong with one's original plan / accommodation.
I am sure customers were well compensated for their inconvenience, IIRC passengers got $1,200 each for the Hawaii fiasco, a family of four would have had a significant portion of their holiday paid for by AIR.
I have listed below all the others blue chip companies on the NZX trading on a FY 16 prospective PE of under 6....oh wait...there isn't any.
I remain of the opinion that analysts have NFI what they'll make in EPS in FY17 and beyond and all that really matters at this stage is current year indications from the company and they're extremely confident of a significant increase in EPS and that in a year when the economy is relatively soft. No need to over-think this investment, the cash register is ringing like crazy in a soft economy and the current PE at $2.48 is 5.5 based on consensus forecast EPS of $0.45. Imagine how well they'd be going if the economy really was a rock star.
You think the enhanced freight capabilities of the 787-9's, (three times that of the replaced 767's) might come in handy with extra freight with the TPP :)
I have a strong bias towards increasing my investment after tomorrow's ASM.
Roger - it wasn't beat up day
General conclusion was -
1 - AIR doing great marketing and self promotion to ensure they are seen as a very good airline, when in fact they are if one is in a good mood on par with competitors. Perception does not always equal reality
2 - Shareholders should be pleased that they do just enough and no more to keep most punters happy
3- AIR extract as much as they can from their assets. Good for shareholders again.
Essentially they do a good job in flying punters around in the most efficient and profitable way. Flying is a 'commodity' these days, not an experience to look forward to.
No there's a buy recommendation
Fair enough mate. Shame you didn't get to try out one of their new Dreamliner's on your trip. According to AIR customers surveyed have expressed a very high level of satisfaction with the flight experience...proof that perception can be reality ?
The Virgin London / Hong Kong was a Dreamliner. As I said it did not live up to its hype, I was underwhelmed. Perception definitely not reality in this case. Doubt whether AIR ones are any better
Hated the lighting that was simulated night time even though it was afternoon outside. Probably a ploy to get punters to sleep longer and cutdown on service. But brekkie at 3pm local time is ridiculous
Long haul is a pain eh.
So:
brokers, Tigers and modandms efforts totally worthless;
future valuations a load of dingo's kidneys;
the 20% upside to broker consensus is completely imaginary;
AIR is an incredibly speculative share and you are better putting your money somewhere safer.
Best Wishes
Paper Tiger
PS: I have told you about the two times I had tickets for and turned up for flights that did not exist?
I was referring to the fact that analysts have a consensus forecast for FY17 and FY18 that is materially lower than FY16. The company is not saying this. Effectively analysts are saying we're now at the peak of the cycle...funny thing is from everything going on in this economy and neighbouring ones it feels like a trough in the cycle to me.
The best guide to future performance is last year and current year performance as guided by the company themselves.